O'Reilly Automotive Inc. Reports Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended June 30, 2015; Provides Earnings Guidance for the Third Quarter Ending September 30, 2015 and Provides Tax Rate Guidance for the Fourth Quarter of 2015; Revised Earnings Guidance for the Year Ending December 31, 2015; Plans to Open New Stores
Jul 29 15
O'Reilly Automotive Inc. reported unaudited consolidated earnings results for the second quarter and six months ended June 30, 2015. For the quarter, the company reported sales of $2,035,518,000 against $1,847,088,000 a year ago. Operating income was $385,768,000 against $336,474,000 a year ago. Income before income taxes was $372,208,000 against $324,798,000 a year ago. Net income was $233,508,000 or $2.29 per diluted share against $205,647,000 or $1.91 per diluted share a year ago. Capital expenditures were $95,391,000 against $111,844,000 a year ago. The company generated $197 million of free cash flow during the second quarter, which is relatively flat with the prior year.
For the six months, the company reported sales of $3,937,421,000 against $3,575,031,000 a year ago. Operating income was $736,141,000 against $623,594,000 a year ago. Income before income taxes was $708,872,000 against $599,758,000 a year ago. Net income was $446,372,000 or $4.35 per diluted share against $379,507,000 or $3.52 per diluted share a year ago. Net cash provided by operating activities was $698,453,000 against $655,525,000 a year ago. Purchases of property and equipment were $186,531,000 against $194,929,000 a year ago. Return on equity was 41.7% against 34.7% a year ago. Return on assets was 12.8% against 11.4% a year ago. Year-to-date, the company generated $512 million in free cash flow compared to $461 million in the prior year.
For the third quarter ending September 30, 2015, the company expects comparable store sales of 3.0% to 5.0% and diluted earnings per share to be $2.29 to $2.23. As is typical in most years, anticipates its third quarter tax rate to be lower at approximately 36.2% of pretax income.
For the year ending December 31, 2015, the company expects comparable store sales of 4.0% to 6.0%, total revenue to be $7.75 billion to $7.85 billion, gross profit as a percentage of sales to be 51.8% to 52.2%, operating income as a percentage of sales to be 18.3% to 18.7% and capital expenditures to be $400 million to $430 million. The company increased its full year earnings per share guidance from a range of $8.42 to $8.52 to a range of $8.59 and $8.69. Looking at the full year of 2015, the company still expects its tax rate will be approximately 37% of pretax income. And based on the strong year-to-date operating income performance, the company is raising its full year free cash flow guidance from a range of $700 million to $750 million to a range of $725 million to $775 million.
The company plans to open new stores across its footprint with more significant growth concentrated in Florida, supported by its new distribution center in Lakeland.
As adjusted for the expected tolling of certain historical tax periods and with the fourth quarter returning to a more normal rate of 37.3% of pretax income. These estimated rates are subject to the resolution of open tax periods under audit and the success in qualifying for existing job tax credit programs.
Jury Finds O Reilly Automotive Breached Contract with Ad Agency
Jul 9 15
After a month-long trial, a Greene County jury awarded $12.5 million To a Missouri-based advertising agency that alleged its former client, O Reilly Automotive, had terminated the agency with more than four years remaining on its contract. Meridian Creative Alliance had worked for O Reilly since 1998, crafting such ads as the Oh, Oh, Oh, O Reilly jingle. The companies entered into a new contract starting in 2008 and running through the end of 2012. However, O Reilly ended the contract in November 2008 after hiring a different advertising firm. Meridian alleged in a lawsuit that it was owed its fees through the contract's Dec. 31, 2012, end date. O Reilly denied that it had breached the contract. In a counterclaim, it alleged that Meridian had submitted â false and fraudulent invoices, causing the auto parts dealer to overpay the ad agency by approximately $3.5 million. Meridian denied the claims. Following years of litigation, the trial in Springfield began shortly after Memorial Day and continued until June 18, when the jury ruled in favor of Meridian both on the primary claims and on O Reilly s counterclaims. Foland said the contract called for the agency to be paid 5% of O Reilly's advertising budget per year, amounting to $17.5 million. However, the jury awarded just $12.5 million. Foland said it was not clear where the lower number came from, but defense had argued that O Reilly had expanded its advertising during the contract period, so Meridian might not have gotten that business even had it continued to work for O Reilly.