O'Reilly Auto Parts 2006 Annual Report Download - page 24

o’reilly automotive 2006 annual report
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management’s discussion and analysis
of financial condition and results of operations (continued)
contractual obligations
We have other liabilities reflected in our balance sheet, including deferred income taxes and self-insurance accruals. The payment obligations associated
with these liabilities are not reflected in the financial commitments table due to the absence of scheduled maturities. Therefore, the timing of these payments
cannot be determined, except for amounts estimated to be payable in 2007 that are included in current liabilities. In addition, we have commitments
with various vendors for the purchase of inventory as of December 31, 2006. The financial commitments table excludes these commitments because
they are cancelable by their terms.
Our contractual obligations, including commitments for future payments under non-cancelable lease arrangements, short and long-term debt arrangements,
interest payments related to long-term debt and purchase obligations for construction contract commitments, are summarized below and are fully
disclosed in Notes 6 and 7 to the consolidated financial statements.
payments due by period
before 1-3 4-5 over 5
(In thousands) total 1 year years years years
contractual obligations:
Long-term debt $110,479 $ 309 $ 25,470 $ 9,700 $ 75,000
Interest payments related to long-term debt 41,408 6,044 9,088 8,085 18,191
Operating leases 379,710 44,548 77,303 59,541 198,318
Purchase obligations 69,516 69,516 - - -
Total contractual cash obligations $601,113 $120,417 $111,861 $77,326 $291,509
We believe that our existing cash and cash equivalents, cash expected to be provided by operating activities, available bank credit facilities and trade
credit will be sufficient to fund both our short-term and long-term capital needs for the foreseeable future.
inflation and seasonality
We attempt to mitigate the effects of merchandise cost increases principally by taking advantage of vendor incentive programs, economies of scale resulting
from increased volume of purchases and selective forward buying. As a result, we do not believe that our operations have been materially affected by
inflation. Our business is somewhat seasonal, primarily as a result of the impact of weather conditions on customer buying patterns. Store sales and
profits have historically been higher in the second and third quarters (April through September) of each year than in the first and fourth quarters.
quarterly results
The following table sets forth certain quarterly unaudited operating data for fiscal 2006 and 2005. 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 therein.
(In thousands, except per share data) fiscal 2006
first second third fourth
quarter quarter quarter quarter
Sales $536,547 $591,199 $597,144 $558,332
Gross profit 233,428 260,928 263,326 249,029
Operating income 64,966 78,236 75,084 64,029
Net income 40,564 49,313 47,856 40,352
Basic net income per common share 0.36 0.44 0.42 0.35
Net income per common share-assuming dilution 0.35 0.43 0.42 0.35