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O’Reilly Automotive, Inc. Reports Fourth Quarter and Full-Year 2021 Results
ソース: Nasdaq GlobeNewswire / 09 2 2022 16:30:01 America/New_York
- Fourth quarter comparable store sales growth of 14.5%, full-year increase of 13.3%
- 41% increase in fourth quarter diluted earnings per share, full-year increase of 32%
- $3.21 billion net cash provided by operating activities in 2021
SPRINGFIELD, Mo., Feb. 09, 2022 (GLOBE NEWSWIRE) -- O’Reilly Automotive, Inc. (the “Company” or “O’Reilly”) (Nasdaq: ORLY), a leading retailer in the automotive aftermarket industry, today announced record revenue and earnings for its fourth quarter ended December 31, 2021. The results represent 29 consecutive years of comparable stores sales growth and record revenue and operating income for O’Reilly since becoming a public company in April of 1993.
4th Quarter Financial Results
O’Reilly’s CEO and Co-President, Greg Johnson, commented, “We are very pleased to once again report an extremely strong quarter, highlighted by 14.5% growth in comparable store sales and a 41% increase in diluted earnings per share. This incredible performance in the fourth quarter caps a tremendous year for our Company, a year in which we delivered the best financial results in our Company’s history, after setting the same records in 2020. Our full-year 2021 comparable store sales growth of 13.3%, on top of our strong 2020 performance, represents a two-year stack of 24.2% and is a testament to our Team’s unrelenting dedication to our customers. These accomplishments are all the more impressive in light of the extremely difficult challenges our Team has faced the past two years, and I am extremely grateful for Team O’Reilly’s commitment to meeting the critical needs of our customers during the pandemic.”Sales for the fourth quarter ended December 31, 2021, increased $463 million, or 16%, to $3.29 billion from $2.83 billion for the same period one year ago. Gross profit for the fourth quarter increased 18% to $1.73 billion (or 52.7% of sales) from $1.47 billion (or 52.0% of sales) for the same period one year ago. Selling, general and administrative expenses (“SG&A”) for the fourth quarter increased 13% to $1.06 billion (or 32.2% of sales) from $938 million (or 33.2% of sales) for the same period one year ago. Operating income for the fourth quarter increased 27% to $676 million (or 20.5% of sales) from $534 million (or 18.9% of sales) for the same period one year ago.
Net income for the fourth quarter ended December 31, 2021, increased $126 million, or 32%, to $519 million (or 15.8% of sales) from $393 million (or 13.9% of sales) for the same period one year ago. Diluted earnings per common share for the fourth quarter increased 41% to $7.64 on 68 million shares versus $5.40 on 73 million shares for the same period one year ago.
Full-Year Financial Results
Mr. Johnson continued, “Team O’Reilly’s dedication to unsurpassed customer service levels and relentless focus on profitable growth translated our strong top-line performance in 2021 into a record 21.9% operating margin, which exceeded our previous record operating margin by over 100 basis points. Our full-year diluted earnings per share increased 32% to $31.10, which represents a compounded annual growth rate of 25% over the last three years. I would like to congratulate Team O’Reilly for exceeding our sales and profitability goals in yet another incredible year and thank each of them for their continued hard work and dedication to our ongoing success.”Sales for the year ended December 31, 2021, increased $1.72 billion, or 15%, to $13.33 billion from $11.60 billion for the same period one year ago. Gross profit for the year ended December 31, 2021, increased 15% to $7.02 billion (or 52.7% of sales) from $6.09 billion (or 52.4% of sales) for the same period one year ago. SG&A for the year ended December 31, 2021, increased 12% to $4.10 billion (or 30.8% of sales) from $3.67 billion (or 31.6% of sales) for the same period one year ago. Operating income for the year ended December 31, 2021, increased 21% to $2.92 billion (or 21.9% of sales) from $2.42 billion (or 20.8% of sales) for the same period one year ago.
Net income for the year ended December 31, 2021, increased $412 million, or 24%, to $2.16 billion (or 16.2% of sales) from $1.75 billion (or 15.1% of sales) for the same period one year ago. Diluted earnings per common share for the year ended December 31, 2021, increased 32% to $31.10 on 70 million shares versus $23.53 on 74 million shares for the same period one year ago.
“As we look forward to 2022,” Mr. Johnson continued, “we remain confident in the strength of our Team and our industry, and our 2022 financial guidance reflects our expectations for continued strong customer demand, as well as our planned strategy to further invest in pricing on the professional side of our business. We continually monitor the competitive landscape in our industry and have been extremely pleased with our ability to grow both our DIY and professional business at record levels over the last two years; however, we believe we have an opportunity to accelerate our professional share gain through targeted competitive adjustments to our pricing strategy. We have incorporated our expectations for continued robust demand on both sides of our business and the anticipated sales lift from our professional pricing initiative in establishing our 2022 comparable store sales guidance range of 5% to 7%. Our gross profit and operating profit guidance ranges also reflect the rollout of our professional pricing initiative, which we strongly believe will further solidify our competitive position and drive long-term profitable growth.”
4th Quarter and Full-Year Comparable Store Sales Results
Comparable store sales are calculated based on the change in sales for U.S. stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members, as well as sales from Leap Day for the year ended December 31, 2020. Online sales for ship-to-home orders and pick-up-in-store orders for U.S. stores open at least one year are included in the comparable store sales calculation. Comparable store sales increased 14.5% for the fourth quarter ended December 31, 2021, on top of 11.2% for the same period one year ago. Comparable stores sales increased 13.3% for the year ended December 31, 2021, on top of 10.9% for the same period one year ago.Share Repurchase Program
During the fourth quarter ended December 31, 2021, the Company repurchased 0.7 million shares of its common stock, at an average price per share of $637.15, for a total investment of $469 million. During the year ended December 31, 2021, the Company repurchased 4.5 million shares of its common stock, at an average price per share of $545.78, for a total investment of $2.48 billion. Subsequent to the end of the fourth quarter and through the date of this release, the Company repurchased an additional 0.3 million shares of its common stock, at an average price per share of $660.23, for a total investment of $215 million. The Company has repurchased a total of 85.9 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through the date of this release, at an average price of $197.48, for a total aggregate investment of $16.96 billion. As of the date of this release, the Company had approximately $1.79 billion remaining under its current share repurchase authorizations.Full-Year 2022 Guidance
The table below outlines the Company’s guidance for selected full-year 2022 financial data:For the Year Ending December 31, 2022 Net, new store openings 175 to 185 Comparable store sales 5% to 7% Total revenue $14.2 billion to $14.5 billion Gross profit as a percentage of sales 50.8% to 51.3% Operating income as a percentage of sales 20.6% to 21.1% Effective income tax rate 23.2% Diluted earnings per share (1) $32.35 to $32.85 Net cash provided by operating activities $2.1 billion to $2.5 billion Capital expenditures $650 million to $750 million Free cash flow (2) $1.3 billion to $1.6 billion (1) Weighted-average shares outstanding, assuming dilution, used in the denominator of this calculation, includes share repurchases made by the Company through the date of this release.
(2) Free cash flow is a non-GAAP financial measure. The table below reconciles Free cash flow guidance to Net cash provided by operating activities guidance, the most directly comparable GAAP financial measure:For the Year Ending (in millions) December 31, 2022 Net cash provided by operating activities $ 2,080 to $ 2,500 Less: Capital expenditures 650 to 750 Excess tax benefit from share-based compensation payments 10 to 20 Investment in tax credit equity investments 120 to 130 Free cash flow $ 1,300 to $ 1,600 Non-GAAP Information
This release contains certain financial information not derived in accordance with United States generally accepted accounting principles (“GAAP”). These items include adjusted debt to earnings before interest, taxes, depreciation, amortization, share-based compensation and rent (“EBITDAR”) and free cash flow. The Company does not, nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. The Company believes that the presentation of adjusted debt to EBITDAR and free cash flow provide meaningful supplemental information to both management and investors that is indicative of the Company’s core operations. The Company has included a reconciliation of this additional information to the most comparable GAAP measure in the table above and the selected financial information below.Earnings Conference Call Information
The Company will host a conference call on Thursday, February 10, 2022, at 10:00 a.m. Central Time to discuss its results as well as future expectations. Investors may listen to the conference call live on the Company’s website at www.OReillyAuto.com by clicking on “Investor Relations” and then “News Room.” Interested analysts are invited to join the call. The dial-in number for the call is (847) 619-6397 and the conference call identification number is 50259150. A replay of the conference call will be available on the Company’s website through Thursday, February 9, 2023.About O’Reilly Automotive, Inc.
O’Reilly Automotive, Inc. was founded in 1957 by the O’Reilly family and is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional service provider markets. Visit the Company’s website at www.OReillyAuto.com for additional information about O’Reilly, including access to online shopping and current promotions, store locations, hours and services, employment opportunities and other programs. As of December 31, 2021, the Company operated 5,759 stores in 47 U.S. states and 25 stores in Mexico.Forward-Looking Statements
The Company claims 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 “estimate,” “may,” “could,” “will,” “believe,” “expect,” “would,” “consider,” “should,” “anticipate,” “project,” “plan,” “intend” or similar words. In addition, statements contained within this press release that are not historical facts are forward-looking statements, such as statements discussing, among other things, expected growth, store development, 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, the COVID-19 pandemic or other public health crises; the economy in general; inflation; consumer debt levels; product demand; the market for auto parts; competition; weather; tariffs; availability of key products; business interruptions, including terrorist activities, war and the threat of war; failure to protect our brand and reputation; challenges in international markets; volatility of the market price of our common stock; our increased debt levels; credit ratings on public debt; historical growth rate sustainability; our ability to hire and retain qualified employees; risks associated with the performance of acquired businesses; information security and cyber-attacks; and governmental regulations. Actual results may materially differ from anticipated results described or implied in these forward-looking statements. Please refer to the “Risk Factors” section of the annual report on Form 10-K for the year ended December 31, 2020, and subsequent Securities and Exchange Commission filings for additional factors that could materially affect the Company’s financial performance. Forward-looking statements speak only as of the date they were made and the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.For further information contact: Investor & Media Contacts Mark Merz (417) 829-5878 Eric Bird (417) 868-4259 O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)December 31, 2021 December 31, 2020 (Unaudited) (Note) Assets Current assets: Cash and cash equivalents $ 362,113 $ 465,640 Accounts receivable, net 272,562 229,679 Amounts receivable from suppliers 113,112 100,615 Inventory 3,686,383 3,653,195 Other current assets 70,092 50,658 Total current assets 4,504,262 4,499,787 Property and equipment, at cost 6,948,038 6,559,911 Less: accumulated depreciation and amortization 2,734,523 2,464,993 Net property and equipment 4,213,515 4,094,918 Operating lease, right-of-use assets 1,982,478 1,995,127 Goodwill 879,340 881,030 Other assets, net 139,112 125,780 Total assets $ 11,718,707 $ 11,596,642 Liabilities and shareholders’ equity (deficit) Current liabilities: Accounts payable $ 4,695,312 $ 4,184,662 Self-insurance reserves 128,794 109,199 Accrued payroll 107,588 88,875 Accrued benefits and withholdings 234,872 242,724 Income taxes payable — 16,786 Current portion of operating lease liabilities 337,832 322,778 Other current liabilities 370,217 297,393 Total current liabilities 5,874,615 5,262,417 Long-term debt 3,826,978 4,123,217 Operating lease liabilities, less current portion 1,701,757 1,718,691 Deferred income taxes 175,212 155,899 Other liabilities 206,568 196,160 Shareholders’ equity (deficit): Common stock, $0.01 par value: Authorized shares – 245,000,000 Issued and outstanding shares – 67,029,042 as of December 31, 2021, and 71,123,109 as of December 31, 2020 670 711 Additional paid-in capital 1,305,508 1,280,841 Retained deficit (1,365,802 ) (1,139,139 ) Accumulated other comprehensive loss (6,799 ) (2,155 ) Total shareholders’ (deficit) equity (66,423 ) 140,258 Total liabilities and shareholders’ equity (deficit) $ 11,718,707 $ 11,596,642 Note: The balance sheet at December 31, 2020, 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.
O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)For the Three Months Ended For the Year Ended December 31, December 31, 2021 2020 2021 2020 (Unaudited) (Unaudited) (Unaudited) (Note) Sales $ 3,291,493 $ 2,828,773 $ 13,327,563 $ 11,604,493 Cost of goods sold, including warehouse and distribution expenses 1,556,957 1,356,635 6,307,614 5,518,801 Gross profit 1,734,536 1,472,138 7,019,949 6,085,692 Selling, general and administrative expenses 1,058,655 937,866 4,102,781 3,666,356 Operating income 675,881 534,272 2,917,168 2,419,336 Other income (expense): Interest expense (34,732 ) (38,349 ) (144,768 ) (161,126 ) Interest income 493 599 1,971 2,491 Other, net 2,582 3,407 7,543 5,704 Total other expense (31,657 ) (34,343 ) (135,254 ) (152,931 ) Income before income taxes 644,224 499,929 2,781,914 2,266,405 Provision for income taxes 125,251 106,984 617,229 514,103 Net income $ 518,973 $ 392,945 $ 2,164,685 $ 1,752,302 Earnings per share-basic: Earnings per share $ 7.71 $ 5.45 $ 31.39 $ 23.74 Weighted-average common shares outstanding – basic 67,300 72,143 68,967 73,817 Earnings per share-assuming dilution: Earnings per share $ 7.64 $ 5.40 $ 31.10 $ 23.53 Weighted-average common shares outstanding – assuming dilution 67,928 72,771 69,611 74,462 Note: The income statement for the year ended December 31, 2020, 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.
O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)For the Year Ended December 31, 2021 2020 (Unaudited) (Note) Operating activities: Net income $ 2,164,685 $ 1,752,302 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property, equipment and intangibles 328,217 314,635 Amortization of debt discount and issuance costs 4,388 4,580 Deferred income taxes 20,383 12,381 Share-based compensation programs 24,656 22,747 Other 2,128 4,686 Changes in operating assets and liabilities: Accounts receivable (47,427 ) (20,515 ) Inventory (32,634 ) (198,864 ) Accounts payable 510,911 580,608 Income taxes payable 152,339 197,739 Other 79,664 166,304 Net cash provided by operating activities 3,207,310 2,836,603 Investing activities: Purchases of property and equipment (442,853 ) (465,579 ) Proceeds from sale of property and equipment 9,494 15,770 Investment in tax credit equity investments (180,333 ) (164,111 ) Other (1,928 ) (975 ) Net cash used in investing activities (615,620 ) (614,895 ) Financing activities: Proceeds from borrowings on revolving credit facility — 1,162,000 Payments on revolving credit facility — (1,423,000 ) Proceeds from the issuance of long-term debt — 997,515 Principal payments on long-term debt (300,000 ) (500,000 ) Payment of debt issuance costs (3,412 ) (7,929 ) Repurchases of common stock (2,476,048 ) (2,087,194 ) Net proceeds from issuance of common stock 84,915 62,284 Other (313 ) (253 ) Net cash used in financing activities (2,694,858 ) (1,796,577 ) Effect of exchange rate changes on cash (359 ) 103 Net (decrease) increase in cash and cash equivalents (103,527 ) 425,234 Cash and cash equivalents at beginning of the period 465,640 40,406 Cash and cash equivalents at end of the period $ 362,113 $ 465,640 Supplemental disclosures of cash flow information: Income taxes paid $ 450,935 $ 305,087 Interest paid, net of capitalized interest 144,293 159,717 Note: The cash flow statement for the year ended December 31, 2020, 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.
O’REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(Unaudited)For the Year Ended December 31, Adjusted Debt to EBITDAR: 2021 2020 (In thousands, except adjusted debt to EBITDAR ratio) GAAP debt $ 3,826,978 $ 4,123,217 Add: Letters of credit 83,985 66,427 Discount on senior notes 4,360 5,071 Debt issuance costs 18,662 21,712 Six-times rent expense 2,232,132 2,125,896 Adjusted debt $ 6,166,117 $ 6,342,323 GAAP net income $ 2,164,685 $ 1,752,302 Add: Interest expense 144,768 161,126 Provision for income taxes 617,229 514,103 Depreciation and amortization 328,217 314,635 Share-based compensation expense 24,656 22,747 Rent expense (i) 372,022 354,316 EBITDAR $ 3,651,577 $ 3,119,229 Adjusted debt to EBITDAR 1.69 2.03 (i) The table below outlines the calculation of Rent expense and reconciles Rent expense to Total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the year ended December 31, 2021 and 2020 (in thousands):
Total lease cost, per ASC 842, for the year ended December 31, 2021 $ 443,484 Less: Variable non-contract operating lease components, related to property taxes and insurance, for the year ended December 31, 2021 71,462 Rent expense for the year ended December 31, 2021 $ 372,022 Total lease cost, per ASC 842, for the year ended December 31, 2020 $ 420,365 Less: Variable non-contract operating lease components, related to property taxes and insurance, for the year ended December 31, 2020 66,049 Rent expense for the year ended December 31, 2020 $ 354,316 December 31, 2021 2020 Selected Balance Sheet Ratios: Inventory turnover (1) 1.7 1.5 Average inventory per store (in thousands) (2) $ 637 $ 650 Accounts payable to inventory (3) 127.4 % 114.5 % For the Three Months Ended For the Year Ended December 31, December 31, 2021 2020 2021 2020 Reconciliation of Free Cash Flow (in thousands): Net cash provided by operating activities $ 641,983 $ 487,474 $ 3,207,310 $ 2,836,603 Less: Capital expenditures 102,166 102,154 442,853 465,579 Excess tax benefit from share-based compensation payments 6,246 2,132 35,202 16,918 Investment in tax credit equity investments 178,538 68,819 180,333 164,111 Free cash flow $ 355,033 $ 314,369 $ 2,548,922 $ 2,189,995 For the Three Months Ended For the Year Ended December 31, December 31, 2021 2020 2021 2020 Store Count: Beginning domestic store count 5,740 5,592 5,594 5,439 New stores opened 19 5 167 167 Stores closed — (3 ) (2 ) (12 ) Ending domestic store count 5,759 5,594 5,759 5,594 Mexico stores 25 22 25 22 Ending total store count 5,784 5,616 5,784 5,616 For the Three Months Ended For the Year Ended December 31, December 31, 2021 2020 2021 2020 Store and Team Member Information: (4) Total employment 81,123 76,257 Square footage (in thousands) 43,185 41,668 Sales per weighted-average square foot (5) $ 74.96 $ 66.70 $ 307.37 $ 276.96 Sales per weighted-average store (in thousands) (6) $ 562 $ 497 $ 2,298 $ 2,057 (1) Calculated as cost of goods sold for the last 12 months divided by average inventory. Average inventory is calculated as the average of inventory for the trailing four quarters used in determining the denominator.
(2) Calculated as inventory divided by store count at the end of the reported period.
(3) Calculated as accounts payable divided by inventory.
(4) Represents O’Reilly’s U.S. operations only.
(5) Calculated as sales less jobber sales, divided by weighted-average square footage. Weighted-average square footage is determined by weighting store square footage based on the approximate dates of store openings, acquisitions, expansions or closures.
(6) Calculated as sales less jobber sales, divided by weighted-average stores. Weighted-average stores is determined by weighting stores based on their approximate dates of openings, acquisitions or closures.
