O'Reilly Auto Parts 2009 Annual Report Download - page 41

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RESULTS OF OPERATIONS
The following table sets forth, certain income statement data as a percentage of sales for the years indicated:
Years ended December 31,
2009 2008 2007
Sales 100% 100%
100%
Cost of goods sold, including warehouse and
distribution expenses 52.0 54.5 55.6
Gross profit 48.0 45.5 44.4
Selling, general and administrative
expenses 36.9 36.1 32.3
Operating income 11.1 9.4 12.1
Debt prepayment costs -- (0.2) --
Interim facility commitment fee -- (0.1) --
Interest expense (0.9) (0.7) (0.1)
Interest income -- 0.1 0.1
Other income, net 0.1 -- 0.1
Income before income taxes 10.3 8.5 12.2
Provision for income taxes 4.0 3.3 4.5
Net income 6.3% 5.2% 7.7%
2009 Compared to 2008
Sales increased $1.27 billion, or 36%, from $3.58 billion in 2008 to $4.85 billion in 2009. The following table presents the
components of the increase in sales for the year ended December 31, 2009 (in millions):
Increase in Sales for the Year
Ended December 31, 2009,
compared to the same period
in 2008
Comparable store sales $ 188.5
Stores opened throughout 2008, excluding stores open at
least one year that are included in comparable stores
sales 71.7
Sales of stores opened throughout 2009 72.8
Non-store sales including machinery, sales to independent
part stores and team members 4.4
Sales in 2008 for stores that have merged or closed (2.1)
Acquired CSK store sales, excluding sales that are included
in comparable store sales (sales after 7/11/2009, the one
year anniversary of the acquisition) 935.2
Total increase in sales $ 1,270.5
Comparable store sales are calculated based on the change in sales of stores open at least one year and exclude sales of specialty
machinery, sales to independent parts stores, sales to team members and sales during the one to two week period certain CSK branded
stores were closed for conversion. Comparable store sales for stores operating on the O’Reilly systems increased 5.4% for the year
ended December 31, 2009. The O’Reilly systems comparable store sales results consisted of a 6.6% increase for the core O’Reilly and
post conversion Schuck’s stores, a 2.1% increase from the 123 converted Checker stores and a 11.9% decrease in comparable stores
sales from the 141 converted Murray’s stores. Comparable store sales for stores operating on the legacy CSK system increased 3.0%
for the year ended December 31, 2009. Consolidated comparable store sales increased 4.6% for the year ended December 31, 2009.
We believe that the increased sales achieved by our stores are the result of superior inventory availability, a broader selection of
products offered in most stores, a targeted promotional and advertising effort through a variety of media and localized promotional
events, continued improvement in the merchandising and store layouts of the stores, compensation programs for all store team
members that provide incentives for performance and our continued focus on serving professional installers. We opened 149 new
O’Reilly branded stores and one new Schuck’s store in 2009. At December 31, 2009, we operated 3,421 stores compared to 3,285
stores at December 31, 2008. Due to the acquisition and integration of CSK, we anticipate new store unit growth to be limited to 150
new stores in 2010, excluding the previously disclosed consolidation and closure of underperforming stores related to the acquisition
of CSK; however, we anticipate that continued store unit growth consistent with our historical openings will continue in the future.