O'Reilly Automotive 10-Q 2024-09-30

Filed 2024-11-08. 2 sections, 126K 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 September 30, 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 - 57,730,693 shares outstanding as of November 4, 2024.

O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 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		18
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		24
ITEM 4 - CONTROLS AND PROCEDURES		25
PART II - OTHER INFORMATION		26
ITEM 1 - LEGAL PROCEEDINGS		26
ITEM 1A - RISK FACTORS		26
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		26
ITEM 5 - OTHER INFORMATION		26
ITEM 6 - EXHIBITS		27
SIGNATURE PAGES		28

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, 2024		December 31, 2023
	(Unaudited)		(Note)
Assets
Current assets:
Cash and cash equivalents	$	115,613	$	279,132
Accounts receivable, net		401,950		375,049
Amounts receivable from suppliers		154,300		140,443
Inventory		4,913,237		4,658,367
Other current assets		113,187		105,311
Total current assets		5,698,287		5,558,302

Property and equipment, at cost		8,969,137		8,312,367
Less: accumulated depreciation and amortization		3,532,755		3,275,387
Net property and equipment		5,436,382		5,036,980

Operating lease, right-of-use assets		2,269,929		2,200,554
Goodwill		997,226		897,696
Other assets, net		175,698		179,463
Total assets	$	14,577,522	$	13,872,995

Liabilities and shareholders’ deficit
Current liabilities:
Accounts payable	$	6,359,619	$	6,091,700
Self-insurance reserves		123,505		128,548
Accrued payroll		141,361		138,122
Accrued benefits and withholdings		201,351		174,650
Income taxes payable		206,776		7,860
Current portion of operating lease liabilities		408,571		389,536
Other current liabilities		743,982		730,937
Total current liabilities		8,185,165		7,661,353

Long-term debt		5,359,810		5,570,125
Operating lease liabilities, less current portion		1,938,162		1,881,344
Deferred income taxes		325,869		295,471
Other liabilities		207,580		203,980

Shareholders’ equity (deficit):
Common stock, $0.01 par value:
Authorized shares – 245,000,000
Issued and outstanding shares –
57,838,920 as of September 30, 2024, and
59,072,792 as of December 31, 2023		578		591
Additional paid-in capital		1,449,447		1,352,275
Retained deficit		(2,875,955)		(3,131,532)
Accumulated other comprehensive (loss) income		(13,134)		39,388
Total shareholders’ deficit		(1,439,064)		(1,739,278)

Total liabilities and shareholders’ deficit	$	14,577,522	$	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				For the Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Sales	$	4,364,437	$	4,203,380	$	12,612,878	$	11,980,235
Cost of goods sold, including warehouse and distribution expenses		2,113,212		2,042,917		6,159,421		5,842,861
Gross profit		2,251,225		2,160,463		6,453,457		6,137,374

Selling, general and administrative expenses		1,354,497		1,263,241		3,940,950		3,669,734
Operating income		896,728		897,222		2,512,507		2,467,640

Other income (expense):
Interest expense		(55,166)		(51,361)		(167,145)		(145,520)
Interest income		2,055		1,292		5,239		2,920
Other, net		4,304		(486)		9,266		8,179
Total other expense		(48,807)		(50,555)		(152,640)		(134,421)

Income before income taxes		847,921		846,667		2,359,867		2,333,219
Provision for income taxes		182,457		196,840		524,317		539,142
Net income	$	665,464	$	649,827	$	1,835,550	$	1,794,077

Earnings per share-basic:
Earnings per share	$	11.47	$	10.82	$	31.34	$	29.46
Weighted-average common shares outstanding – basic		57,998		60,082		58,563		60,905

Earnings per share-assuming dilution:
Earnings per share	$	11.41	$	10.72	$	31.14	$	29.20
Weighted-average common shares outstanding – assuming dilution		58,335		60,590		58,942		61,445

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,
	2024		2023		2024		2023
Net income	$	665,464	$	649,827	$	1,835,550	$	1,794,077
Other comprehensive income (loss):
Foreign currency translation adjustments		(22,026)		(5,782)		(52,522)		27,293
Total other comprehensive (loss) income		(22,026)		(5,782)		(52,522)		27,293

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