O'Reilly Auto Parts 2002 Annual Report Download - page 34

QUARTERLY RESULTS
The following table sets forth certain quarterly unaudited operating data for fiscal 2002 and 2001. The unaudited quarterly
information includes all adjustments which management considers necessary for a fair presentation of the information shown.
The unaudited operating data presented below should be read in conjunction with our Consolidated Financial
Statements and related notes, included elsewhere in this annual report, and the other financial information included here.
(in thous ands , e xce pt pe r s hare data) FISCAL 2002
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
Product sales $295,489 $343,181 $359,579 $314,241
Gross profit 126,028 144,186 152,196 130,990
Operating income 28,638 37,769 40,723 31,171
Net income $ 16,642 $ 22,547 $ 24,096 $ 18,707
Basic net income per common share $ 0.31 $ 0.42 $ 0.45 $ 0.35
Net income per common share – assuming dilution $ 0.31 $ 0.42 $ 0.45 $ 0.35
(in thous ands , e xce pt pe r s hare data) FISCAL 2001
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
Product sales $239,063 $280,676 $293,996 $278,377
Gross profit 102,426 117,789 125,287 122,316
Operating income 21,732 30,758 34,142 27,199
Net income $ 12,317 $ 17,987 $ 20,140 $ 15,908
Basic net income per common share $ 0.24 $ 0.35 $ 0.38 $ 0.30
Net income per common share – assuming dilution $ 0.24 $ 0.34 $ 0.38 $ 0.30
SHAREHOLDER RIGHTS PLAN
On May 17, 2002, the Board of Directors adopted a Shareholder Rights Plan. One Right was distributed for each share
of common stock, par value $.01 per share, of the Company held by stockholders of record as of the close of business
on May 31, 2002. The Rights initially entitle stockholders to buy a unit representing one one-hundredth of a share of a
new series of preferred stock of the Company for $160 and expire on May 30, 2012. The Rights generally will be exer-
cisable only if a person or group acquires beneficial ownership of 15% or more of the Company’s common stock or
commences a tender or exchange offer upon consummation of which such person or group would beneficially own 15%
or more of the Company’s common stock. If a person or group acquires beneficial ownership of 15% or more of the
Company’s common stock, each Right (other than Rights held by the acquiror) will, unless the Rights are redeemed
by the Company, become exercisable upon payment of the exercise price of $160 for common stock of the Company
having a market value of twice the exercise price of the Right. A copy of the Stockholder Rights Plan was filed on
May 28, 2002, with the Securities and Exchange Commission, as Exhibit 99.1 to our report on Form 8-K.
NEW ACCOUNTING STANDARDS
In August 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No.
144, Accounting fo r the Impairme nt or Dis pos al o f Lo ng-Live d Ass e t, superseding Statement No. 121, Accounting fo r
the Impairme nt of Long-Lived As s e ts and fo r Lo ng-Live d Ass e ts to Be Dis po s e d Of. SFAS 144 applies to all long-lived
assets, including discontinued operations. SFAS 144 requires that those long-lived assets classified as held for sale
be measured at the lower of carrying amount (cost less accumulated depreciation) or fair value less costs to sell.
Discontinued operations will no longer be measured at net realizable value or include amounts for operating losses that
have not yet occurred. SFAS 144 also broadens the reporting of discontinued operations to include all components of
an entity with operations that can be distinguished from the rest of the entity and that will be eliminated from the ongo-
ing operations of the entity in a disposal transaction. We do not expect the adoption of the new statement to have a
significant financial impact on our consolidated financial position or results of operations.
In June 2002, the Financial Accounting Standards Board issued Statement No. 146, Accounting fo r Cos ts Ass o ciate d
with Exit o r Dispo s al Activitie s . Under the new rules, a liability for the costs associated with an exit or disposal activity
will be recognized when the liability is incurred as opposed to the date of an entity’s commitment to an exit plan. The
new rules are effective for exit or disposal activities that are initiated after December 31, 2002. We do not expect the
adoption of new rules to have a significant impact on our consolidated financial position or results of operations.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
32 O’Reilly Automotive