O'Reilly Automotive 10-Q 2023-09-30

Filed 2023-11-08. 2 sections, 123K characters. Original on sec.gov · Markdown · JSON

Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

O’REILLY AUTOMOTIVE, INC.

(Exact name of registrant as specified in its charter)

Missouri		000-21318		27-4358837
(State or other jurisdiction of		Commission file number		(I.R.S. Employer Identification No.)
incorporation or organization)

233 South Patterson Avenue

Springfield**,** Missouri 65802

(Address of principal executive offices, Zip code)

(417) 862-6708

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class		Trading Symbol(s)	Name of Each Exchange on which Registered
Common Stock,	$0.01 par value	ORLY	The Nasdaq Stock Market LLC
			(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐	Smaller reporting company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: Common stock, $0.01 par value - 59,162,175 shares outstanding as of October 30, 2023.

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION		2
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)		2
Condensed Consolidated Balance Sheets		2
Condensed Consolidated Statements of Income		3
Condensed Consolidated Statements of Comprehensive Income		4
Condensed Consolidated Statements of Shareholders’ Equity (Deficit)		5
Condensed Consolidated Statements of Cash Flows		6
Notes to Condensed Consolidated Financial Statements		7
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		17
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		23
ITEM 4 - CONTROLS AND PROCEDURES		24
PART II - OTHER INFORMATION		25
ITEM 1 - LEGAL PROCEEDINGS		25
ITEM 1A - RISK FACTORS		25
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES		25
ITEM 5 - OTHER INFORMATION		25
ITEM 6 - EXHIBITS		26
SIGNATURE PAGES		27

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	September 30, 2023		December 31, 2022
	(Unaudited)		(Note)
Assets
Current assets:
Cash and cash equivalents	$	82,664	$	108,583
Accounts receivable, net		399,654		343,155
Amounts receivable from suppliers		156,727		127,019
Inventory		4,631,511		4,359,126
Other current assets		107,156		110,376
Total current assets		5,377,712		5,048,259

Property and equipment, at cost		8,136,342		7,438,065
Less: accumulated depreciation and amortization		3,248,165		3,014,024
Net property and equipment		4,888,177		4,424,041

Operating lease, right-of-use assets		2,213,884		2,112,267
Goodwill		895,399		884,445
Other assets, net		176,666		158,967
Total assets	$	13,551,838	$	12,627,979

Liabilities and shareholders’ deficit
Current liabilities:
Accounts payable	$	6,199,816	$	5,881,157
Self-insurance reserves		128,892		138,926
Accrued payroll		124,040		126,888
Accrued benefits and withholdings		170,550		166,433
Income taxes payable		325,693		—
Current portion of operating lease liabilities		385,942		366,721
Other current liabilities		496,149		383,692
Total current liabilities		7,831,082		7,063,817

Long-term debt		5,102,350		4,371,653
Operating lease liabilities, less current portion		1,895,991		1,806,656
Deferred income taxes		282,894		245,347
Other liabilities		199,990		201,258

Shareholders’ equity (deficit):
Common stock, $0.01 par value:
Authorized shares – 245,000,000
Issued and outstanding shares –
59,621,138 as of September 30, 2023, and
62,353,221 as of December 31, 2022		596		624
Additional paid-in capital		1,341,163		1,311,488
Retained deficit		(3,132,517)		(2,375,860)
Accumulated other comprehensive income		30,289		2,996
Total shareholders’ deficit		(1,760,469)		(1,060,752)

Total liabilities and shareholders’ deficit	$	13,551,838	$	12,627,979

Note: The balance sheet at December 31, 2022, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

See accompanying Notes to condensed consolidated financial statements.

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Sales	$	4,203,380	$	3,798,619	$	11,980,235	$	10,765,367
Cost of goods sold, including warehouse and distribution expenses		2,042,917		1,863,657		5,842,861		5,237,615
Gross profit		2,160,463		1,934,962		6,137,374		5,527,752

Selling, general and administrative expenses		1,263,241		1,130,768		3,669,734		3,255,478
Operating income		897,222		804,194		2,467,640		2,272,274

Other income (expense):
Interest expense		(51,361)		(43,164)		(145,520)		(115,389)
Interest income		1,292		1,435		2,920		2,627
Other, net		(486)		(616)		8,179		(7,104)
Total other expense		(50,555)		(42,345)		(134,421)		(119,866)

Income before income taxes		846,667		761,849		2,333,219		2,152,408
Provision for income taxes		196,840		176,411		539,142		508,330
Net income	$	649,827	$	585,438	$	1,794,077	$	1,644,078

Earnings per share-basic:
Earnings per share	$	10.82	$	9.25	$	29.46	$	25.30
Weighted-average common shares outstanding – basic		60,082		63,288		60,905		64,979

Earnings per share-assuming dilution:
Earnings per share	$	10.72	$	9.17	$	29.20	$	25.08
Weighted-average common shares outstanding – assuming dilution		60,590		63,860		61,445		65,566

See accompanying Notes to condensed consolidated financial statements.

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income	$	649,827	$	585,438	$	1,794,077	$	1,644,078
Other comprehensive income (loss):
Foreign currency translation adjustments		(5,782)		(372)		27,293		2,816
Total other comprehensive (loss) income		(5,782)		(372)		27,293		2,816

Compr

Showing the first 8K of 117K characters. Open the full section