2010 Credit Suisse Holiday Conference December 7, 2010

Transcription

1 2010 Credit Suisse Holiday Conference December 7, 2010

2 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 You can identify these statements by forward-looking words such as expect, believe, anticipate, should, plan, intend, estimate, project, will or similar words. In addition, statements contained within this presentation that are not historical facts are forward-looking statements, such as statements discussing among other things, expected growth, store development, CSK DOJ investigation resolution, 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, competition, product demand, the market for auto parts, the economy in general, inflation, consumer debt levels, governmental approvals, our ability to hire and retain qualified employees, risks associated with the integration of acquired businesses such as the integration of CSK, weather, terrorist activities, war and the threat of war. 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,, for additional factors that could materially affect our financial performance. 2

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4 Miles driven in trillions Industry Drivers Average Age Gas prices in dollars per gallon Continued Aging of U.S. Vehicle Population: Falling new car sales 17.5 million 10.7 million Tight consumer spending leads to investing in currently owned automobiles U.S. Miles Driven and Gas Prices: Source: AAIA Factbook Cars Light Trucks 92% increase in miles driven from 1979 to $ average gas price as of November 30, % YTD increase in miles driven as of September 30, billion miles $ $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Miles Driven Gas Prices Source: 2010 Digital Aftermarket Factbook - AAIA 4

5 In Millions 40,000 30,000 20,000 10,000 0 Industry Opportunities Fragmented Market: 35,238 35,590 35,357 35,405 35,690 35,850 36,224 36,152 35,995 30% Top 10 Auto Parts Stores Industry Total U.S. Light Vehicle Registrations: 31% 32% 34% 36% 38% 42% 42% 43% Source: AAIA Factbook or latest SEC filing Top Ten Auto Parts Chains 1. AutoZone Inc. (4,627) 2. Advance Auto Parts (3,540) 3. O Reilly Auto Parts (3,536) 4. General Parts Inc./CARQUEST (1,500) 5. Genuine Parts/NAPA (1,047) 6. Pep Boys (594) 7. Fisher Auto Parts (300) 8. Uni-Select (281) 9. Replacement Parts Inc. (155) 10. Auto-Wares Group (132) 20% increase in Total Light Vehicle Registrations from 1999 to Source: AAIA Factbook 5

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7 Company History Founded in 1957 by the O Reilly family with 13 original team members Initial public offering in 1993 listed on the NASDAQ as ORLY Track record of consistent performance 17 consecutive years of record revenue, operating income, EBITDA and comparable store sales growth 7

8 Company Overview Store Count 3,536 stores in 38 states as of September 30, 2010 Distribution Centers 23 Distribution Centers Team Members Over 47,000 Last-Twelve-Months Sales $5.3 billion as of September 30, 2010 Market Capitalization $8.6 billion at December 6, 2010 Total Assets $5.0 billion as of September 30,

9 Dual Market Strategy Established track record of serving both DIY and DIFM customers Greater market penetration and reduced vulnerability to competition Leverages our existing retail and distribution infrastructure Can profitably operate in large and small markets Enhances service levels offered to our DIY customers Significant barriers to success in DIFM market 9

10 3 rd Quarter 2010 Highlights Opened 48 New Stores 11.1% Comparable Store Sales Increase Adjusted Operating Margin Increased to 14.4% 37% increase in Adjusted Diluted Earnings Per Share to $0.86 $143 million in Free Cash Flow Raised 2010 Full Year Comparable Store Sales Guidance to 7% - 8% 4 th Quarter EPS Guidance of $ $0.60 Increased 2010 Adjusted EPS Guidance to $ $ % to 32% increase over 10

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12 CSK Store Conversions Seattle Moreno Valley Denver Salt Lake City Stockton Phoenix 194 stores Began: Nov. Completed: Jan stores Began: Jan Completed: Mar stores Began: Mar Completed: April stores Began: May 2010 Completed: Jun stores Began: Sept Completed: Oct stores Completed Overnight November 6, 2010 November thru fall of

13 CSK Conversion Process To Be Accomplished Convert Phoenix DC to O Reilly systems and convert surrounding Checker stores Finish resetting West coast stores to O Reilly retail format Complete store décor and graphic package installations Complete exterior sign changes Complete commercial programs rollout Enhance and expand the professional sales team Continue to improve Team Member parts knowledge Transition to O Reilly Incentive Pay and Commission Plans Refine product mix based on markets Increase import OE coverage offerings 13

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15 Store & Revenue Growth 2010 Guidance $5.3 to $5.4 billion 1,600 1,400 Store Growth Sales (in thousands) 1,492 $6,000 $5,000 1,200 1,000 $4, $3, $2, E $1,000 $0 Major acquisitions: 1998 Hi/LO 182 stores acquired; 2001 Midstate 82 stores acquired; 2005 Midwest - 72 stores acquired; 2008 CSK Auto 1,342 stores acquired 15

16 Consolidated Comparable Store Sales 2010 Guidance 4 th Quarter: 4% - 6% Full Year: 7% - 8% 16.0% 14.0% 14.9% 14.4% 12.0% 11.1% 10.0% 8.9%8.9% 9.6% 8.8% 8.0% 6.8%6.8% 7.8% 7.5% 6.8% 6.9% 7.9% 6.0% 5.0% 4.6% 5.7% 4.8% 5.3% 4.0% 3.7% 3.3% 3.7% 2.0% 1.5% 0.0% Q1 Q Q2 Q Q3 Q

17 Consolidated Operating Margin 16.0% 14.0% 13.2% 14.2% 14.4% 12.0% 10.8% 11.0% 10.9% 11.0% 11.1% 12.3% 12.4% 12.1% 12.0% 11.1% 12.0% 11.9% 10.0% 9.7% 8.0% 7.8% 6.0% 4.0% 2.0% 0.0% H * Adjusted operating margin, excluding the impact of acquisition related charges H Q1 Q Q2 Q2 2010* Q3 Q3 2010* 17

18 Fueling EPS Growth 2010 Guidance 4 th Quarter: $ $0.60 Full Year: Adjusted $ $2.98* GAAP $ $2.83 $2.50 $2.25 $2.26 $2.00 $1.75 $1.50 $1.41 $1.55 $1.67 $1.48 $1.25 $1.09 $1.00 $0.75 $0.50 $0.50 $0.63 $0.77 $0.92 $0.46 $0.70 $1.64 $0.81 $0.63 $0.86 $0.25 $ * * Q1 Q Q2 Q2 2010* Q3 Q3 2010* * Adjusted diluted earnings per share, excluding the impact of acquisition related charges 18

19 Free Cash 2010 Guidance (in millions): Cap Ex: $375 - $400 Free Cash Flow: $250 - $275 $500,000 $400,000 $300,000 Change in Net Inventory Investment Cap Ex Free Cash Flow $200,000 $100,000 $0 ($100,000) ($200,000) In thousands YTD YTD

20 O Reilly Culture Statement "We are ENTHUSIASTIC, HARDWORKING PROFESSIONALS who are DEDICATED to TEAMWORK, SAFETY, and EXCELLENT CUSTOMER SERVICE. We will practice EXPENSE CONTROL while setting an example of RESPECT, HONESTY, and a WIN-WIN ATTITUDE in everything we do!" 20