O'Reilly Auto Parts 2008 Annual Report Download - page 3

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A STEADY HAND
AT THE WHEEL.
LETTER TO OUR SHAREHOLDERS
The weakening economy presented challenges to
consumers of all income levels, and no one was
immune to these difficult conditions; given the
difficult macroeconomic environment, we are pleased
to have delivered strong results. Through a constant
emphasis on the core O’Reilly culture values of
customer service and expense control, we continued
to successfully execute our dual market strategy and
grow our market share in the face of declining miles
driven and rising unemployment. Team O’Reilly’s
dedication and determination to providing the
best service and value to our customers drove a
comparable store sale increase of 2.6% in 2008 for
core O’Reilly stores.
In 2008 the headwinds on consumer spending,
combined with the limited availability of credit in the
banking system, put pressure on companies across
the retail spectrum, and the automotive aftermarket
was no different. The impact on the automotive
aftermarket participants was manifested in store
closures and industry consolidation. A key component
of our growth strategy has always been to act as an
opportunistic industry consolidator by targeting
once-effective chains that had fallen on hard times,
primarily because of a lack of sufficient capital and the
loss of management focus. We executed this strategy
with very good results in our 1998 purchase of Hi-Lo
Automotive (182 stores), 2001 purchase of Midstates
Auto Parts (82 stores) and 2005 purchase of Midwest
Auto Parts (72 stores). The difficult economic
conditions and tight credit markets again afforded us
the opportunity to be a consolidator in our industry
when, on July 11, 2008, we acquired CSK Auto
Corporation (CSK). At the time of the acquisition,
CSK was one of the largest specialty retailers of auto
parts and accessories in the Western United States
and operated 1,342 stores under the brand names of
Checker Auto Parts, Schuck’s Auto Supply, Kragen
Auto Parts and Murray’s Discount Auto Parts.
CSK had experienced several years of poor
performance primarily caused by a lack of capital,
under-inventoried stores and the absence of consistent,
GREG HENSLEE
Chief Executive Ofcer
and Co-President
TED WISE
Chief Operating Ofcer
and Co-President
TOM MCFALL
Chief Financial Ofcer
and Executive Vice
President
ROAD TESTED. RESULTS DRIVEN.
O’REILLY AUTOMOTIVE 2008 ANNUAL REPORT PG.1