O'Reilly Auto Parts 2001 Annual Report Download

Download and view the complete annual report

Please find the complete 2001 O'Reilly Auto Parts annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 40

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40

PaGE
0.1O’REILLY AUTOMOTIVE 2001 ANNUAL REPORT
AMODEL YEAR

Table of contents

  • Page 1
    P a G E 0. 1 A MODEL YEAR O'REILLY AUTOMOTIVE 2001 ANNUAL REPORT

  • Page 2
    ... a professional installer, there's a certain labor of love you have with your automobile. Our team members at O'Reilly Auto Parts know, understand and share this passion. From the moment you walk into one of our stores, you know you're getting the same attention and care from our professionals that...

  • Page 3
    ... O'REILLY AUTOMOTIVE 2001 ANNUAL REPORT FINANCIAL HIGHLIGHTS (In thousands, except per share and operating data) Years ended December 31, YEAR IN REVIEW 2001 2000 % change OPENED 121 NEW STORES. T E A M O ' R E I L LY A C H I E V E D O U R 1 - 5 - U GOAL OF $1 BILLION IN SALES ONE Y E A R E A R LY...

  • Page 4
    2001 LEADERSHIP A MODEL YEAR PA G E This leadership team averages over 28 years of service with O'Reilly. As pictured from left to right: Greg Henslee, David O'Reilly, Ted Wise, Rosalie O'Reilly-Wooten, Larry O'Reilly and Charlie O'Reilly. 0. 2 1940 FORD COUPE

  • Page 5
    ... added 121 new stores, bringing our total store count to 875 throughout 16 states. We continue to make improvements in our use of technology. Our Global Inventory System has increased the availability of parts to our customers by giving our stores visibility to inventory at all distribution centers...

  • Page 6
    875 LOCATIONS PA G E DISTRIBUTION CENTERS LITTLE ROCK, ARKANSAS DES MOINES, IOWA K A N S A S C I T Y, M I S S O U R I SPRINGFIELD, MISSOURI O K L A H O M A C I T Y, O K L A H O M A KNOXVILLE, TENNESSEE NASHVILLE, TENNESSEE DALLAS, TEXAS HOUSTON, TEXAS 0. 4 MID-STATE ACQUISITION States INDIANA ...

  • Page 7
    ..., showcasing our large inventory of auto parts, chemicals, tools and accessories. 8.2% 1,155 1,454 3 01 0 96 97 98 99 00 01 (a) total square footage includes normal selling, office, stockroom and receiving space. (b) for stores opened in two full periods. B R A N D S , L O C AT...

  • Page 8
    ... PA G E The team concept is a critical part of the O'Reilly business plan. It takes the entire team to get the right parts to our customers. The personal, professional service received by our customers provides us with a competitive edge, and our model team members provide the very best. Our team...

  • Page 9
    ...needs of the store network by managing our tremendous data warehouse and providing the best possible point-of-sale support. TEAM MEMBERS This knowledge and dedication to customer service is what makes our team members "Professional Parts People." Our training programs, promote-fromwithin philosophy...

  • Page 10
    ... T R AT E G Y A MODEL YEAR PA G E Of the $1.09 billion in product sales in 2001, 44% was generated from our professional installer market. O'Reilly provides a broad inventory availability with over 100,000 SKUs (stock keeping units). This lets our customers know they can count on the O'Reilly name...

  • Page 11
    ... reached over $1.09 billion in 2001 making it our ninth year of record sales since becoming a public company. Competitive pricing, dual market strategy and efforts from every team member helped make 2001 a Model Year. At O'Reilly, we work hard to serve all PA G E 0. professional installers. Our DIY...

  • Page 12
    2001 DISTRIBUTION NETWORK A MODEL YEAR PA G E Our sophisticated point-of-sale system allows stores to order hard-to-find parts directly from one of our nine distribution centers. Once a part has been ordered, our advanced inventory control system and handling technology allow the part to be picked...

  • Page 13
    ...-find part is ready for our customer by the time our store opens the next morning, or better yet, the same day in many markets. Over 2,330 O'Reilly team members work around the clock in our distribution centers to provide exceptional service to our stores. Our nine strategically located distribution...

  • Page 14
    1957 FORD THUNDERBIRD A MODEL YEAR PA G E 0. 12 Looking back on a proud past ...looking forward to a great future. 2002 FORD THUNDERBIRD

  • Page 15
    ... sales Cost of goods sold, including warehouse and distribution expenses Gross profit Operating, selling, general and administrative expenses Operating income Other income (expense), net Provision for income taxes Income from continuing operations before cumulative effects of changes in accounting...

  • Page 16
    ... of stores open at least one year. Percentage increase in same-store product sales is calculated based on store sales results, which exclude sales of specialty machinery, sales by outside salesmen and sales to employees. (e) There was no additional dilution until 1993 when options were first granted...

  • Page 17
    ... expenses consist primarily of store payroll, store occupancy, advertising expenses, other store expenses, and general and administrative expenses, including salaries and related benefits of corporate CRITICAL ACCOUNTING POLICIES team members, administrative office occupancy expenses, data...

  • Page 18
    ... salaries and benefits, rent and other costs associated with the addition of employees and facilities to support the increased level of our operations. Product sales increased $136.3 million, or 18.1% from $754.1 million in 1999 to $890.4 million in 2000, due to 101 net additional stores opened...

  • Page 19
    ... is included in the table of future minimum annual rental commitments under noncancelable operating leases. Proceeds from the transaction were used to reduce outstanding borrowings under our revolving credit facility. In August 2001, the Company completed a sale-leaseback with O'Reilly-Wooten 2000...

  • Page 20
    ... and in 1999. Four new distribution centers were acquired: two in October 2001, located in Nashville, Tennessee, and Knoxville, Tennessee; one in October 2000, located in Little Rock, Arkansas; and the other in December 1999, located in Dallas, Texas. Our continuing store expansion program requires...

  • Page 21
    ... Accounting Standards Board issued Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill will no longer be amortized but will be subject to annual impairment tests...

  • Page 22
    ... Net property and equipment Notes receivable Other assets, net Total assets 103,361 289,004 2,557 14,635 $856,859 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable to bank Income taxes payable Accounts payable Accrued payroll Accrued benefits and withholdings Other...

  • Page 23
    ... OF INCOME (In thousands, except per share data) YEARS ENDED DECEMBER 31, Product sales Cost of goods sold, including warehouse and distribution expenses Operating, selling, general and administrative expenses 2001 $1,092,112 624,294 353,987 978,281 2000 $890,421 507,720 292,672 800,392 90...

  • 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
    ... benefit plans Tax benefit of stock options exercised Changes in operating assets and liabilities, net of the effects of the acquisition: Accounts receivable Amounts receivable from vendors Inventory Refundable income taxes Other current assets Accounts payable Income taxes payable Accrued payroll...

  • Page 26
    ... professional installer throughout Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Oklahoma, Tennessee and Texas. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its...

  • Page 27
    ... In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 142, Goodwill 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...

  • Page 28
    ... leases certain land and buildings related to its O'Reilly Auto Parts stores under six-year operating lease agreements with O'Reilly Investment Company and O'Reilly Real Estate Company, partnerships in which certain shareholders of the Company are partners. Generally, these lease agreements provide...

  • Page 29
    ... certain shareholders of the Company). The transaction closed on September 1, 2001, with a purchase price of approximately $5.6 million for nine O'Reilly Auto Parts stores and did not result in a material gain or loss. The lease, which has been accounted for an operating lease, calls for an initial...

  • Page 30
    ... a class action on behalf of persons or entities in the states of Texas, Louisiana and California that had purchased a battery from Hi/LO since May 1990. The complaint alleged that Hi/LO offered and sold ''old,'' ''used'' and ''out of warranty'' batteries as if the batteries were new, resulting...

  • Page 31
    ... exercisable at December 31, 2001, 2000 and 1999, respectively. The Company also maintains a stock option plan for nonemployee 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...

  • Page 32
    ...the Company had accounted for its employee and non-employee director stock options under the fair value method of that SFAS. The fair values for these options were estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2001, 2000...

  • Page 33
    ... for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax... 2001 2000 1999 $66,352 $51,708 $45,639 2001 Deferred tax assets: Current: 2000 52,121 665 51,168 560 48,674 1,041 Allowance for doubtful accounts Other...

  • Page 34
    ... of the proceeds was used to repay the Company's outstanding indebtedness under its bank credit facilities. The remaining portion of the proceeds was used to fund the Company's expansion. 2001 Federal income taxes at statutory rate State income taxes, net of federal tax benefit Other items, net $37...

  • Page 35
    REPORT OF INDEPENDENT AUDITORS The Board of Directors and Shareholders O'Reilly Automotive, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of O'Reilly Automotive, Inc. and Subsidiaries as of December 31, 2001, and 2000, and the related consolidated statements of ...

  • Page 36
    ... Director of Employee and Team Member Relations David McCready Director of DC Operations Kim Mesenbrink Director of Accounting Wayne Price Director of Risk Management Steve Rice Director of Credit and Collections Barry Sabor Director of Loss Prevention Denny Smith Director of Springfield Region...

  • Page 37
    ... Greg Johnson Systems Development Manager David Jordan Kansas City Distribution Center Manager Les Keeth Supplier Credit Manager Steve Lines Sales Training Manager Jeff Main Jobber Systems Sales Manager Ed Martinez Houston Distribution Center Manager Jeff McKinney Customer Satisfaction Manager Bryan...

  • Page 38
    ... 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 reported by The...

  • Page 39
    ... supplier of auto parts in our market areas by offering our retail customers, professional installers and jobbers the best combination of inventory, price, quality and service; providing our team members with competitive wages and benefits, and working conditions which promote high achievement and...

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