O'Reilly Auto Parts 2010 Annual Report Download - page 36

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Years ended December 31, 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
(In thousands, except per share data)
SELECTED OPERATING DATA:
Number of stores at year-end (a) 3,570 3,421 3,285 1,830 1,640 1,470 1,249 1,109 981 875
Total store square footage at year-end
(in 000’s)(a)(b) 25,315 24,200 23,205 12,439 11,004 9,801 8,318 7,348 6,408 5,882
Sales per weighted-average store
( in 000’s)(a)(b) $ 1,527 $ 1,424 $ 1,379 $ 1,430 $ 1,439 $ 1,478 $ 1,443 $ 1,413 $ 1,372 $ 1,426
Sales per weighted-average square
foot (b) $ 216 $ 202 $ 201 $ 212 $ 215 $ 220 $ 217 $ 215 $ 211 $ 219
Percentage increase in same store
sales (c)(d) 8.8% 4.6% 1.5% 3.7% 3.3% 7.5% 6.8% 7.8% 3.7% 8.8%
BALANCE SHEET DATA:
Working capital $ 1,072,294 $ 1,007,576 $ 821,932 $ 573,328 $ 566,892 $ 424,974 $ 479,662 $ 441,617 $ 483,623 $ 429,527
Total assets 5,047,827 4,781,471 4,193,317 2,279,737 1,977,496 1,718,896 1,432,357 1,157,033 1,009,419 856,859
Current portion of long-term debt and
short-term debt 1,431 106,708 8,131 25,320 309 75,313 592 925 682 16,843
Long-term debt, less current portion 357,273 684,040 724,564 75,149 110,170 25,461 100,322 120,977 190,470 165,618
Shareholders’ equity 3,209,685 2,685,865 2,282,218 1,592,477 1,364,096 1,145,769 947,817 784,285 650,524 556,291
(a) Store count for 2002 does not include 27 stores acquired from Dick Smith Enterprises and Davie Automotive, Inc. in December 2002.
(b) Total square footage includes normal selling, office, stockroom and receiving space. Sales per weighted-average store and square foot are weighted to consider the
approximate dates of store openings or expansions.
(c) Same-store sales are calculated based on the change in sales of stores open at least one year. Percentage increase in same-store sales is calculated based on store sales
results, which exclude sales of specialty machinery, sales by outside salesmen, sales to team members and sales during the one to two week period certain CSK branded
stores were closed for conversion.
(d) Same-store sales for 2008 include sales for stores acquired in the CSK acquisition. Comparable stores sales for stores operating on O’Reilly systems open at least
one year increased 2.6% for the year ended December 31, 2008. Comparable stores sales for stores operating on the legacy CSK system open at least one year decreased
1.7% for the portion of CSK’s sales in 2008 since the July 11, 2008, acquisition.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
In Management’s Discussion and Analysis, we provide a historical and prospective narrative of our general financial condition, results
of operations, liquidity and certain other factors that may affect our future results, including:
• an overview of the key drivers of the automotive aftermarket;
• key events and recent developments within our company;
• our results of operations for the years ended 2010, 2009 and 2008;
• our liquidity and capital resources;
• any off balance sheet arrangements we utilize;
• our guidance for selected financial metrics;
• any contractual obligations to which we are committed;
• our critical accounting estimates;
• the inflation and seasonality of our business;
• our quarterly results for the years ended December 31, 2010, and 2009; and
• new accounting standards that affect our company.
The review of Management’s Discussion and Analysis should be made in conjunction with our consolidated financial statements,
related notes and other financial information included elsewhere in this annual report.
FORWARD-LOOKING STATEMENTS
We claim the protection of the safe-harbor for forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. You can identify these statements by forward-looking words such as “expect,” “believe,” “anticipate,” “should,”
“plan,” “intend,” “estimate,” “project,” “will” or similar words. In addition, statements contained within this annual report that are not
historical facts are forward-looking statements, such as statements discussing among other things, expected growth, store
development, CSK Auto Corporation (“CSK”) Department of Justice (“DOJ”) investigation resolution, integration and expansion
strategy, business strategies, future revenues and future performance. These forward-looking statements are based on estimates,
projections, beliefs and assumptions and are not guarantees of future events and results. Such statements are subject to risks,
uncertainties and assumptions, including, but not limited to, competition, product demand, the market for auto parts, the economy in
general, inflation, consumer debt levels, governmental approvals, our ability to hire and retain qualified employees, risks associated
with the integration of acquired businesses including the acquisition and integration of CSK, weather, terrorist activities, war and the
threat of war. Actual results may materially differ from anticipated results described or implied in these forward-looking statements.
Please refer to the “Risk Factors” section of this annual report on Form 10-K for the year ended December 31, 2010, for additional
factors that could materially affect our financial performance.
OVERVIEW
We are a specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States. We are
one of the largest automotive aftermarket specialty retailers, selling our products to both do-it-yourself (DIY) customers and
professional service providers. Our stores carry an extensive product line consisting of new and remanufactured automotive hard
parts, maintenance items and accessories and a complete line of auto body paint and related materials, automotive tools and
professional service provider service equipment. As of December 31, 2010, we operated 3,570 stores in 38 states.
Operating within the retail industry, we, along with other retail companies, are influenced by a number of general macroeconomic
factors including, but not limited to, fuel costs, unemployment rates, consumer preferences and spending habits and competition. The
difficult conditions that affected the overall macroeconomic environment in recent years continue to impact our Company and the
retail sector in general. We cannot predict whether, when, or the manner in which, these economic conditions will change.
We believe that the number of U.S. miles driven, number of U.S. registered vehicles, average vehicle age, new light vehicle sales,
unperformed maintenance, unemployment and product quality differentiation are key drivers of current and future demand of products
sold within the automotive aftermarket.
Number of miles driven:
Total miles driven in the U.S., along with changes in the average age of vehicles on the road, heavily influence the demand for the
repair and maintenance products we sell. Historically, the long-term trend in the total miles driven in the U.S. has steadily increased.
According to the Department of Transportation, between 1999 and 2007, the total number of miles driven in the U.S. increased at an
average annual rate of approximately 1.6%. In 2008, however, difficult macroeconomic conditions and record high gas prices during
the first half of the year led to a decrease in the number of miles driven and in 2009, miles driven remained relatively flat. Through
November of 2010, miles driven in the U.S. increased by 0.7% with miles driven increasing each month since March. As the U.S.
FORM 10-K