O'Reilly Automotive 10-Q 2024-03-31

Filed 2024-05-09. 2 sections, 109K characters. Original on sec.gov · Markdown · JSON

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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 March 31, 2024

☐	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 - 58,894,096 shares outstanding as of April 29, 2024.

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2024

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 AND USE OF PROCEEDS		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)


	March 31, 2024		December 31, 2023
	(Unaudited)		(Note)
Assets
Current assets:
Cash and cash equivalents	$	89,264	$	279,132
Accounts receivable, net		437,821		375,049
Amounts receivable from suppliers		139,267		140,443
Inventory		4,805,164		4,658,367
Other current assets		128,181		105,311
Total current assets		5,599,697		5,558,302

Property and equipment, at cost		8,555,556		8,312,367
Less: accumulated depreciation and amortization		3,360,351		3,275,387
Net property and equipment		5,195,205		5,036,980

Operating lease, right-of-use assets		2,227,783		2,200,554
Goodwill		1,009,857		897,696
Other assets, net		180,512		179,463
Total assets	$	14,213,054	$	13,872,995

Liabilities and shareholders’ deficit
Current liabilities:
Accounts payable	$	6,117,068	$	6,091,700
Self-insurance reserves		130,974		128,548
Accrued payroll		127,704		138,122
Accrued benefits and withholdings		174,125		174,650
Income taxes payable		147,645		7,860
Current portion of operating lease liabilities		399,245		389,536
Other current liabilities		791,633		730,937
Total current liabilities		7,888,394		7,661,353

Long-term debt		5,288,632		5,570,125
Operating lease liabilities, less current portion		1,900,200		1,881,344
Deferred income taxes		321,323		295,471
Other liabilities		205,703		203,980

Shareholders’ equity (deficit):
Common stock, $0.01 par value:
Authorized shares – 245,000,000
Issued and outstanding shares –
58,982,123 as of March 31, 2024, and
59,072,792 as of December 31, 2023		590		591
Additional paid-in capital		1,410,756		1,352,275
Retained deficit		(2,849,108)		(3,131,532)
Accumulated other comprehensive income		46,564		39,388
Total shareholders’ deficit		(1,391,198)		(1,739,278)

Total liabilities and shareholders’ deficit	$	14,213,054	$	13,872,995

Note: The balance sheet at December 31, 2023, 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
	March 31,
	2024		2023
Sales	$	3,976,240	$	3,707,864
Cost of goods sold, including warehouse and distribution expenses		1,942,068		1,817,535
Gross profit		2,034,172		1,890,329

Selling, general and administrative expenses		1,281,691		1,173,684
Operating income		752,481		716,645

Other income (expense):
Interest expense		(57,148)		(44,572)
Interest income		1,656		868
Other, net		3,401		4,479
Total other expense		(52,091)		(39,225)

Income before income taxes		700,390		677,420
Provision for income taxes		153,152		160,535
Net income	$	547,238	$	516,885

Earnings per share-basic:
Earnings per share	$	9.27	$	8.36
Weighted-average common shares outstanding – basic		59,017		61,840

Earnings per share-assuming dilution:
Earnings per share	$	9.20	$	8.28
Weighted-average common shares outstanding – assuming dilution		59,454		62,398

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
	March 31,
	2024		2023
Net income	$	547,238	$	516,885
Other comprehensive income (loss):
Foreign currency translation adjustments		7,176		18,898
Total other comprehensive income		7,176		18,898

Comprehensive income	$	554,414	$	535,783

See accompanying Notes to condensed consolidated financial statements.

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(In thousands)



	For the Three Months Ended March 31, 2024
								Accumulated
				Additional				Other
	Common Stock			Paid-In		Retained		Comprehensive
	Shares	Par Value		Capital		Deficit		Income		Total
Balance at December 31, 2023	59,073	$	591	$	1,352,275	$	(3,131,532)	$	39,388	$	(1,739,278)
Net income	—		—		—		547,238		—		547,238
Total other comprehensive inco

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