O'Reilly Auto Parts 2008 Annual Report Download - page 34

PG.32 O’REILLY AUTOMOTIVE 2008 ANNUAL REPORT
MAN AGEMENT ’S DISCUS SION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
INF L AT ION A ND SE A SON A L I T Y
For the last three scal years, we have been successful, in many cases, in reducing the eects 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.
To the extent our acquisition cost increased due to base commodity price increases industry-wide, we have typically been able to pass along
these increased costs through higher retail prices for the aected products. As a result, we do not believe our operations have been materially,
adversely aected by ination.
To some extent, our business is seasonal primarily as a result of the impact of weather conditions on customer buying patterns. While we have
historically realized operating prots in each quarter of the year, our store sales and prots have historically been higher in the second and third
quarters (April through September) than in the rst and fourth quarters of the year.
QUARTERLY RESULTS
e following table sets forth certain quarterly unaudited operating data for scal 2008 and 2007. e unaudited quarterly information includes
all adjustments which management considers necessary for a fair presentation of the information shown.
e unaudited operating data presented below should be read in conjunction with our consolidated nancial statements and related notes
included elsewhere in this annual report, and the other nancial information included therein.
Fiscal 2008
First Second ird Fourth
(In thousands, except per share data) Quarter Quarter Quarter Quarter
Sales $ 646,220 $ 704,430 $ 1,111,272 $ 1,114,631
Gross prot 288,494 317,097 507,206 515,129
Operating income 74,156 88,388 92,471 80,602
Net income 46,331 55,788 41,399 42,714
Basic net income per common share 0.40 0.48 0.31 0.32
Net income per common share – assuming dilution 0.40 0.48 0.31 0.32
Fiscal 2007
First Second ird Fourth
(In thousands, except per share data) Quarter Quarter Quarter Quarter
Sales $ 613,145 $ 643,108 $ 661,778 $ 604,288
Gross prot 269,281 287,185 293,701 270,293
Operating income 77,192 81,558 82,716 63,685
Net income 48,407 51,899 53,087 40,595
Basic net income per common share 0.42 0.45 0.46 0.35
Net income per common share – assuming dilution 0.42 0.45 0.46 0.35
NEW ACCOUNTING PRONOUNCEMENTS
In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157,
Fair Value Measurements (“SFAS No. 157”), which denes fair value, establishes a framework for measuring fair value and expands disclosures
about fair value measurements. e provisions of SFAS No. 157 for nancial assets and liabilities, as well as any other assets and liabilities that
are carried at fair value on a recurring basis in nancial statements, are eective for nancial statements issued for scal years beginning aer
November 15, 2007 (scal year 2008 for us). FASB Sta Position FAS 157-2, Eective Date of FASB Statement No. 157, delayed the eective
date of SFAS No. 157 for most nonnancial assets and nonnancial liabilities until scal years beginning aer November 15, 2008 (scal year
2009 for us). e implementation of SFAS No. 157 for nancial assets and nancial liabilities, eective January 1, 2008, did not have a material
impact on our consolidated nancial position, results of operations or cash ows. We do not anticipate SFAS No. 157 for nonnancial assets and
nonnancial liabilities will have a material impact on our consolidated nancial position, results of operations or cash ows.