O'Reilly Auto Parts 2000 Annual Report Download

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O’REILLY AUTOMOTIVE
2000 ANNUAL REPORT
O’REILLY AUTOMOTIVE | 2000 ANNUAL REPORT | DRIVEN

Table of contents

  • Page 1
    O ' R E I L LY A U T O M O T I V E 2 0 0 0 O ' R E I L L Y A N N U A L R E P O R T A U T O M O T I V E | 2 0 0 0 A N N U A L R E P O R T | D R I V E N

  • Page 2
    ...Weighted average common shares outstanding Operating data Stores at year end Same-store sales gain 672 4.0% 571 9.6% 17.7% -5.6% (assuming dilution) 51,728 49,715 4.0% TA B L E O F C O N T E N T S O'Reilly Leadership - Charged ...page Team O'Reilly - Revved ...page Dual Market Strategy - Fueled...

  • Page 3
    ...center ("DC") in Little Rock, Arkansas Earnings Per Share 1997 $ .54 1996 $ .40 $ .20 $ .00 August Announced formation of Internet Autoparts, Inc. $ .45 1995 $ .39 December Opened 672nd store (101 for the year 2000), and opened Dallas Distribution Center NUMBER OF STORES Our growth plans...

  • Page 4
    ... acquisitions, including 12 Gateway Auto Parts stores in Dallas/Ft. Worth, Texas, and nine KarPro stores in Little Rock, Arkansas. On the distribution front, we also had a very eventful year. The 338,140 square-foot distribution center ("DC") in Dallas, Texas, which was purchased a year ago, opened...

  • Page 5
    ... the Company. 1965 Second O'Reilly Auto Parts store opened. 1967 Sales: $2.2 million. allows more specific inventory customization focusing on improving turnover and return on investment for our shareholders. Consequently, the list of improvements completed in 2000 and those rolling out in 2001...

  • Page 6
    ... E I L LY L E A D E R S H I P 2 0 0 0 A N N U A L R E P O R T arg ed Training new team members. Planning new store locations. Researching new products. Our Management is CHARGED with the excitement of growth! Successfully leading a growing company is a daunting challenge - one that requires skilled...

  • Page 7
    ... the Company. 1970 Fifth O'Reilly Auto Parts store opened. 1972 David O'Reilly joins the Company. All O'Reilly supervisors, including store managers, understand that the best way to spread the Company's vision and values is by displaying these through one-onone contact with other team members.

  • Page 8
    Neat, well-stocked stores and friendly, knowledgeable Professional Parts People keep our customers coming back to O'Reilly for all their parts and tool needs. 1975 Groundbreaking for new warehouse facility. Sales: $7.0 million. 1977 15th O'Reilly Auto Parts store opened.

  • Page 9
    ... team members and our customers. Whether at stores, distribution centers or in corporate office support positions, everyone understands the need to step outside his or her designated role to give help to anyone who needs it. This may mean staying late, coming in early or simply answering a phone...

  • Page 10
    ... selection of stock keeping units ("SKUs") and the extensive product knowledge required by professional installers. The bottom line is that the dual market strategy - as executed by O'Reilly - is highly effective. At O'Reilly ...Our No. 1 priority is customer satisfaction. 8 2000 AR Fueled Fueled

  • Page 11
    ... New 10,000-square-foot office facility at Springfield warehouse site. 1984 Sales: $45 million. Ted Wise (current president) promoted to vice president. 50th store opened in June. 1989 100th O'Reilly Auto Parts store opened. Deliveries to professional installer customers are made throughout the...

  • Page 12
    ... (IPO). Kansas City DC opened. Ranked among 200 best small companies in the U.S. by Forbes Magazine. 1995 Oklahoma City DC opened. 1998 O'Reilly purchases Hi/Lo Auto Parts. 1999 500th store opened. Two-for-one stock split. Secondary stock offering. 2000 Dallas DC opened. Little Rock DC opened.

  • Page 13
    ... quarter of 2000 has given us the power to support overnight delivery to each of the 792 stores we plan to have in operation by the end of 2001 and take us well into 2002. Product shipment is expedited by the state-of-the-art rotating carousels in the Des Moines, Iowa, DC, the computerized Warehouse...

  • Page 14
    ...R T IA NE Des Moines IL Kansas City KS MO Springfield OK Oklahoma City AR Little Rock Dallas TX Houston LA KEY ( a s o f M a rc h 1 , 2 0 0 1 ) Stars indicate the location of distribution centers. Arkansas ...36 Illinois ...3 Iowa ...57 Kansas ...51 Louisiana ...30 Missouri ...117 Nebraska...

  • Page 15
    ...29,308 Earnings Per Common Share - Assuming Dilution: Income per share from continuing operations before cumulative effects of changes in accounting principles $ Income per share from continuing operations $ Income per share from discontinued operations Net income per share $ Weighted-average common...

  • Page 16
    ... located in California were sold in 1998. (b) Total square footage includes normal selling, office, stockroom and receiving space. Weighted-average product sales per store and per square foot are weighted to consider the approximate dates of store openings or expansions. (c) Same-store product sales...

  • Page 17
    ... automotive hard parts, maintenance items and accessories, and a complete line of autobody paint and related materials, automotive tools and professional service equipment. Beginning in January 2000, we calculate same-store product sales based on the change in product sales for stores open at least...

  • Page 18
    ... amount and as a percentage of sales primarily resulted from higher costs for employee medical and workers' compensation benefits, the continued conversion of Hi-Lo Automotive, Inc. ("Hi/LO") stores and distribution center, as well as the addition of employees and facilities to support the increased...

  • Page 19
    ... by increases in net income, accounts payable and accrued payroll. The increase in net cash provided by operating activities in 1999 compared to 1998 is the result of increases in net income, accrued payroll, other current liabilities and a larger tax benefit resulting from stock option exercises...

  • Page 20
    ... 50 net stores in 2000, 1999 and 1998, respectively. We remodeled or relocated eight stores in both 2000 and in 1999, and 18 stores in 1998. Two new distribution centers were acquired; one in October 2000, located in Little Rock, Arkansas, and the other in December 1999, located in Dallas, Texas. On...

  • Page 21
    ... of our operations. (In thousands, except per share data) First Fiscal 2000 Quarter Second Quarter Third Quarter Fourth Quarter Product sales $ Gross profit Operating income Net income Basic net income per common share Net income per common share - assuming dilution 195,758 $ 226,359 $ 251...

  • Page 22
    ... Accumulated depreciation and amortization Net property and equipment Notes receivable Other assets Total assets Liabilities and shareholders' equity Current liabilities: Notes payable to bank Income taxes payable Accounts payable Accrued payroll Accrued benefits and withholdings Other current...

  • Page 23
    ...2000 1999 1998 Product sales Cost of goods sold, including warehouse and distribution expenses Operating, selling, general and administrative expenses Operating income Other income (expense): Interest expense Interest income Other, net... $ 1.00 51,728 $ 0.92 49,715 $ 0.71 43,204 21 2000 AR

  • Page 24
    ...employee benefit plans Issuance of common stock under stock option plans Tax benefit of stock options exercised Two-for-one stock split Net income Balance at December 31, 1999 Issuance of common stock under employee benefit plans Issuance of common stock under stock option plans Tax benefit of stock...

  • Page 25
    ...to net cash provided by (used in) operating activities: Depreciation and amortization Provision for doubtful accounts Loss (Gain) on sale of property and equipment Deferred income taxes Common stock contributed to employee benefit plans Tax benefit of stock options exercised Post-retirement benefits...

  • Page 26
    ... aftermarket parts, tools, supplies and accessories to both the DIY customer and the professional installer throughout Arkansas, Illinois, Iowa, Kansas, Louisiana, Missouri, Nebraska, Oklahoma and Texas. Principles of Consolidation The consolidated financial statements include the accounts of...

  • Page 27
    ..., "Accounting for Stock-Based Compensation," requires the use of option valuation models that were not developed for use in valuing employee stock options. Under APB 25, because the exercise price of the Company's stock options equals the market price of the underlying stock on the date of grant, no...

  • Page 28
    ...leases totaled $2,671,000, $2,647,000 and $2,158,000 in 2000, 1999 and 1998, respectively. NOTE 5 - NOTE PAYABLE TO BANK At December 31, 2000, the Company had available short-term unsecured bank lines of credit providing for maximum borrowings of $10 million, all of which was outstanding at December...

  • Page 29
    ... plaintiff in this lawsuit sought to certify a class action on behalf of persons or entities in the states of Texas, Louisiana and California that have purchased a battery from Hi/LO since May 1990. The complaint alleges that Hi/LO offered and sold "old," "used" and "out of warranty" batteries as if...

  • Page 30
    ...for future issuance. Under the plan, substantially all employees and non-employee directors have the right to purchase shares of the Company's common stock monthly at a price equal to 85% of the fair market value of the stock. Under the plan, 147,315 shares were issued at a weighted-average price of...

  • Page 31
    ...and 1998, respectively. The Company also maintains a stock option plan for non-employee directors of the Company under which 300,000 shares of common stock are reserved for future issuance. All director stock options are granted at fair market value on the date of grant and expire on the 29 2000 AR

  • Page 32
    ... valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the...

  • Page 33
    ...Deferred tax assets: Current: Allowance for doubtful accounts Other accruals Noncurrent: Other Total deferred tax assets Deferred tax liabilities: Current: Inventory carrying value Noncurrent: Property and equipment Total deferred tax liabilities Net deferred tax assets (liabilities) 1999: Federal...

  • Page 34
    ... its bank credit facilities. The remaining portion of the proceeds was used to fund the Company's expansion. NOTE 16 - QUARTERLY FINANCIAL DATA - UNAUDITED (In thousands, except per share data) Year ended First December 31, 2000 Quarter Second Quarter Third Quarter Fourth Quarter Product sales...

  • Page 35
    ...December 31, 2000, and 1999, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. Kansas City, Missouri February 23, 2001 33 2000 AR

  • Page 36
    ... MANAGEMENT Allen Alexander Director of Des Moines Region Keith Childers Director of Little Rock Region Jack House Director of Customer Services Barry Sabor Director of Loss Prevention Buddy Ball Director of Kansas City Region Ken Cope Director of Dallas Rural Region Randy Johnson Director...

  • Page 37
    ... Field Sales Manager Ed Randall Real Estate Acquisition Manager Saundra Wilkinson Store Support Manager John Bush Regional Field Sales Manager Lori Holden Customer Service Manager Shari Reaves Benefits Manager Joe Winterberg Product Manager Julie Carroll Des Moines Distribution Center Manager...

  • Page 38
    ... Hanley Road, Suite 1600 St. Louis, Missouri 63105 Skadden, Arps, Slate, Meagher & Flom 333 West Wacker Drive, Suite 2100 Chicago, Illinois 60606 Market Prices and Dividend Information The prices in the table below represent the high and low sales price for O'Reilly Automotive, Inc. common stock as...

  • Page 39
    ... growth, store development and expansion strategy, business strategies, future revenues and future performance. These forward-looking statements are subject to risks, uncertainties and assumptions, including, but not limited to, competition, product demand, the market for auto parts, the economy...

  • Page 40
    233 South Patterson Springfield, Missouri 65802 417-862-3333 www.oreillyauto.com