<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1996
OR
(_) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________________ to __________________
Commission file number 0-21318
O'REILLY AUTOMOTIVE, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Missouri 44-0618012
- ------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or
organization)
233 South Patterson
Springfield, Missouri 65801
- ------------------------------------------------------------------------------
(Address of principal executive offices, Zip code)
(417) 862-6708
- ------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- ------------------------------------------------------------------------------
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 X No
----------- -----------
Common stock, $0.01 par value - 10,445,019 shares outstanding as of June 30,
1996
<PAGE>
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
FORM 10-Q
Quarter Ended June 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page
----
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)
<S> <C>
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 4
Condensed Consolidated Statements of Cash Flows 5
Note to Condensed Consolidated Financial Statements 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION 7
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 9
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 9
SIGNATURE PAGE 10
EXHIBIT INDEX 11
</TABLE>
2
<PAGE>
PART I FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------------- -------------
(Unaudited) (Note)
(In thousands, except share data)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,468 $ 2,833
Short-term investments 9,204 23,410
Accounts receivable 12,751 9,460
Inventory 77,817 58,979
Other current assets 2,077 3,964
-------- --------
Total current assets 105,317 98,646
Property and equipment, at cost 83,266 68,391
Accumulated depreciation 18,419 16,440
-------- --------
64,847 51,951
Other assets 3,176 3,007
-------- --------
Total assets $173,340 $153,604
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,118 $ 13,013
Income taxes payable 1,384 -
Other current liabilities 5,868 4,931
Current portion of long-term debt 165 231
-------- --------
Total current liabilities 26,535 18,175
Long-term debt, less current portion 322 358
Other liabilities 1,338 1,201
Stockholders' equity:
Common stock, $.01 par value:
Authorized shares - 30,000,000
Issued and outstanding shares - 10,445,019
in 1996 and 10,362,170 in 1995 104 104
Additional paid-in capital 73,264 71,024
Retained earnings 71,777 62,742
-------- --------
Total stockholders' equity 145,145 133,870
-------- --------
Total liabilities and stockholders' equity $173,340 $153,604
======== ========
</TABLE>
NOTE: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See note to condensed consolidated financial statements.
3
<PAGE>
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- ----------------------
1996 1995 1996 1995
---------- --------- -------- -------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Product sales $68,782 $50,644 $124,103 $93,410
Cost of goods sold, including warehouse and distribution expenses 40,570 30,095 73,482 55,305
Operating, selling, general and administrative expenses 20,534 15,105 36,789 28,099
------- ------- -------- -------
61,104 45,200 110,271 83,404
------- ------- -------- -------
Operating income 7,678 5,444 13,832 10,006
Other income, net 244 38 563 137
------- ------- -------- -------
Income before income taxes 7,922 5,482 14,395 10,143
Provision for income taxes 2,975 2,035 5,360 3,783
------- ------- -------- -------
Net income $ 4,947 $ 3,447 $ 9,035 $ 6,360
======= ======= ======== =======
Net income per share $ 0.47 $ 0.39 $ 0.87 $ 0.73
======= ======= ======== =======
Weighted average common shares outstanding 10,437 8,728 10,408 8,710
======= ======= ======== =======
</TABLE>
See note to condensed consolidated financial statements.
4
<PAGE>
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------
1996 1995
---------- ----------
(In thousands)
<S> <C> <C>
Net cash provided by (used in) operating activities $ 738 $ (4,354)
Investing activities:
Purchases of property and equipment (15,801) (12,786)
Purchases of short-term investments (11,736) -
Proceeds from sale of short-term investments 25,942 1,075
Other 204 (143)
-------- --------
Net cash used in investing activities (1,391) (11,854)
Financing activities:
Borrowings on note payable to bank - 7,100
Borrowings under long-term credit facility - 6,000
Borrowings on long-term note - 108
Payments on long-term debt (102) (140)
Proceeds from issuance of common stock 1,390 512
-------- --------
Net cash provided by financing activities 1,288 13,580
-------- --------
Net increase (decrease) in cash 635 (2,628)
Cash at beginning of period 2,833 3,364
-------- --------
Cash at end of period $ 3,468 $ 736
======== ========
</TABLE>
See note to condensed consolidated financial statements.
5
<PAGE>
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1996
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months and six months ended June
30, 1996 are not necessarily indicative of the results that may be expected for
the year ended December 31, 1996. For further information, refer to the
consolidated financial statements and footnotes thereto included in the O'Reilly
Automotive, Inc. and Subsidiaries' annual report on Form 10-K for the year ended
December 31, 1995.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------------------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
RESULTS OF OPERATIONS
Product sales for the second quarter of 1996 increased by $18.1 million, or
35.8%, over product sales for the second quarter of 1995 due to a 21.4% increase
in comparable store product sales for the quarter, the opening of 13 new
O'Reilly stores during the last two quarters of 1995 and the opening of 13 new
stores during the first and second quarters of 1996. Product sales for the first
six months of 1996 increased by $30.7 million, or 32.9% over product sales for
the first six months of 1995 due to a 20.0% increase in comparable store product
sales and the opening of new O'Reilly stores discussed above. Management
believes that the consumer acceptance experienced by these new O'Reilly stores
and the increased product sales achieved by the existing O'Reilly stores is the
result of the continuation of media advertising during the first six months of
1996 at the levels set in 1995, an increase in the broad selection of stock
keeping units (SKU's) available at the newer O'Reilly stores and the increasing
penetration of the general geographic markets in which O'Reilly Automotive, Inc.
(the "Company") operates.
Gross profit increased 37.3% from $20.5 million (or 40.6% of product sales) in
the second quarter of 1995 to $28.2 million (or 41.0% of product sales) in the
second quarter of 1996. Gross profit for the first six months increased 32.8%
from $38.1 (or 40.8% of product sales) in 1995 to $50.6 million (or 40.8% of
product sales) in 1996. The increased dollar amount of gross profit resulted
primarily from increased sales volume. The increase in the gross profit margin
for the second quarter of 1996 was primarily due to changes in product sales mix
during the quarter.
Operating, selling, general and administrative expenses (OSG&A expenses)
increased $5.4 million from $15.1 million (or 29.8% of product sales) in the
second quarter of 1995 to $20.5 million (or 29.9% of product sales) in the
second quarter of 1996. OSG&A expenses increased $8.7 million from $28.1 million
(or 30.1% of product sales) in the first six months of 1995 to $36.8 million (or
29.6% of product sales) in the first six months of 1996. The increased dollar
amount of OSG&A expenses resulted primarily from the new stores opened during
the last two quarters of 1995 and the first two quarters of 1996 as well as
additions to administrative staff in order to support increased operations.
Other income, net, increased by $206,000 in the second quarter of 1996 versus
the second quarter of 1995 and increased by $426,000 for the first six months of
1996 compared to the first six months of 1995. These increases were primarily
due to interest income resulting from increased cash and short-term investment
balances.
The Company's estimated provision for income taxes increased from 37.1% of
income before income taxes in the second quarter of 1995 to 37.6% in the second
quarter of 1996 and decreased from 37.3% in the first six months of 1995 to
37.2% in the first six months of 1996.
Net income increased from $3.4 million or 6.8% of product sales in the second
quarter of 1995 to $4.9 million or 7.2% of product sales in the second quarter
and from $6.4 million or 6.8% of product sales in the first six months of 1995
to $9.0 million or 7.3% of product sales in the first six months of 1996, due
primarily to the factors discussed above.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash of $0.7 million was provided by operating activities for the first six
months of 1996 as compared to $4.4 million net cash used by operating activities
for the first six months of 1995 principally as a result of increases in net
income, accounts payable and accrued expenses and decreases in other current
assets offset by the increase in inventory. The increases in accounts payable
and inventory are primarily due to the addition of the Oklahoma City,
distribution center in March, 1996.
Net cash used in investing activities has decreased from $11.9 million in 1995
to $1.4 million in 1996 primarily as a result of a $13.1 million increase in net
proceeds from sales of short-term investments offset by a $3.0 million increase
in purchases of property and equipment.
Cash provided by financing activities has decreased from $13.6 million in the
first six months of 1995 to $1.3 million in the first six months of 1996. The
decrease was primarily due to no borrowings under the Company's credit
facilities during the first six months of 1996.
The Company has available a short-term unsecured line of credit with Boatmen's
Bank of Southwest Missouri. Under the terms thereof, the Company may borrow up
to $17.0 million until June 1997. Borrowings outstanding under the line of
credit bear interest at LIBOR plus 1% ( 6.5% as of June 30, 1996). At June 30,
1996, no amounts were outstanding under the line of credit.
The Company also has available a long-term unsecured revolving credit facility
with Commerce Bank, N.A. of Springfield, Missouri. Under terms of this
agreement, the Company may borrow up to $15 million upon compliance with various
minimum financial ratios. This credit facility bears interest at LIBOR plus
1.25% (6.75% at June 30, 1996) and matures in May 1997. At June 30, 1996, there
were no borrowings outstanding under this credit facility.
The Company plans to open an additional 17 stores in 1996 (for a total of 30). A
portion of the funds required for such planned expansions will come from the
cash provided by operating activities, short-term investments and existing bank
credit facilities.
Management believes that the cash expected to be provided by operating
activities, existing cash and short-term investments, existing bank credit
facilities and trade credit will be sufficient to fund both the short and long-
term capital and liquidity needs of the Company for the foreseeable future.
8
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Shareholders of the Company was held on
May 7, 1996. Of the 10,426,651 shares entitled to vote at such
meeting, 9,365,531 shares were present at the meeting in person or
by proxy. The only matter voted upon at the Shareholders' meeting
was for the election of two Class III Directors for the ensuing
year.
The two individuals listed below were elected as Class III Directors
of the Company, and, with respect to each such Director, the number
of shares voted for and against were as follows:
<TABLE>
<CAPTION>
Number of Shares Voted
----------------------
Name of Nominee For Against
--------------- --------- -----------
<S> <C> <C>
David E. O'Reilly 9,354,774 10,757
Paul R. Lederer 9,354,879 10,652
</TABLE>
There were no brokers' non-votes.
Item 5. Other information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: See Exhibit Index on page 11 hereof
(b) Reports on Form 8-K: No reports on Form 8-K were filed by the
Registrant during the three months ended June 30, 1996.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
O'REILLY AUTOMOTIVE, INC.
August 9, 1996 David E. O'Reilly
- ---------------------- ------------------------------------------------
Date David E. O'Reilly, President and Chief Executive
Officer
August 9, 1996 James R. Batten
- ---------------------- ------------------------------------------------
Date James R. Batten, Chief Financial Officer
(Principal Financial and Accounting Officer)
10
<PAGE>
EXHIBIT INDEX
Number Description Page
- ------ ----------- ----
10.17 Promissory Note between the Registrant and Boatmen's Bank
of Southwest Missouri dated June 1, 1996, filed herewith. 12
27.1 Financial Data Schedule, filed herewith. 16
11
<PAGE>
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
Exhibit 10.17
O'REILLY AUTOMOTIVE, INC.
C/L #1518020-0001
BANK NAME: Boatmen's Bank of Southern Missouri
BANK ADDRESS: P.O. Box 1157, Springfield, Missouri 65801-1157
("BANK")
$17,000,000.00 June 1, 1996
PROMISSORY NOTE
The undersigned ("Borrower") promises to pay to the order of Bank at Bank's
address as listed at the top of this Note ("Bank's Address"), or such other
address as the holder hereof may designate, the principal sum of Seventeen
Million and no/100 Dollars ($17,000,000.00) ("Credit Limit"), or so much thereof
as has been advanced by Bank and is outstanding, plus interest thereon as
required below.
As used in this Note the following terms shall have the meanings indicated
below:
"Adjustable Corporate Base Rate" shall mean with respect to any CBR Loan the
sum of (a) the Applicable Margin plus (b) the Corporate Base Rate.
"Adjusted LIBOR Rate" shall mean with respect to any LIBOR Loan for any
Interest Period the interest rate as determined by the Bank equal to the sum of
(a) the Applicable Margin plus (b) the LIBOR Rate applicable to that Interest
Period. Each determination of the adjusted LIBOR Rate shall be made by the Bank
and shall be conclusive absent manifest error.
Applicable Margin shall mean 1.0% with respect to any LIBOR Loan and 0.0% with
respect to any CBR Loan.
"Borrowing" shall mean a borrowing under this Note.
"Business Day" shall mean any day other than a Saturday, Sunday, or legal
holiday in the State of Missouri on which banks are open for business, except
that, if any determination of a "Business Day" shall relate to a LIBOR Loan, the
term "Business Day" shall in addition exclude any day on which banks are not
open for dealings in dollar deposits in the London Interbank Market.
"CBR Loan" shall mean any Borrowing which is currently bearing interest at the
Adjusted Corporate Base Rate.
"Corporate Base Rate" shall mean the from time-to-time publicly announced
Corporate Base Rate of interest of the Bank, which rate shall change
simultaneously with each change in the Corporate Base Rate.
"Interest Period" shall mean as to any LIBOR Loan, the period of one, two, or
three months' duration, as specified by the Borrower commencing on the date such
LIBOR Loan shall have been made or immediately upon the expiration of the
preceding Interest Period; provided, however, that (a) if any Interest Period
would end on a day which shall not be a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless, with respect to LIBOR
Loans only, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding
Business Day and (b) no Interest Period in respect of any LIBOR Loan hereunder
shall end later than the Maturity Date.
"LIBOR Loan" means any Borrowing which is currently bearing interest at the
Adjusted LIBOR Rate.
12
<PAGE>
"LIBOR Rate" with respect to any LIBOR Loan for any Interest Period shall mean
an interest rate per annum equal to the quotient (rounded to the nearest 0.001%)
of
(i) the rate at which dollar in immediately available funds and for a
maturity equal to the applicable Interest Period are offered or
available in the London Interbank Market for Eurodollars as of
11:00 a.m. (London time) two Business Days before the
applicable advance date as reported on Telerate Screen LIBO
page 3750 (or other applicable page),
divided by
(ii) a number equal to one (1) minus the decimal equivalent of the
aggregate of the maximum rates during the applicable Interest
Period of all reserve requirements (including, without
limitation, marginal, emergency, supplemental and special
reserves), established by the Federal Reserve Board or any other
governmental authority to which Bank is subject, in respect of
"Eurocurrency liabilities" as referred to in Regulation D,
including but not limited to those imposed under Regulation D.
(The amount of every LIBOR Loan shall be deemed to constitute a
Eurocurrency liability and as such shall be deemed to be subject
to such reserve requirements without benefit of credits for
proration, exceptions or offsets which may be available from
time-to-time to Bank under Regulation D.) The LIBOR Rate shall
be adjusted automatically on and as of the effective date of any
change in any such reserve requirements.
"Loan" shall mean any CBR Loan or LIBOR Loan.
"Maturity Date" shall mean June 1, 1997.
"Notice of Borrowing" shall have the sole meaning given it below.
Until the Maturity Date, Bank may in its sole discretion make advances as
requested by Borrower from time-to-time, including advances that are
reborrowings of principal previously paid by Borrower on this Note; provided,
however, that no advances will be made if doing so results in there being a
principal balance outstanding greater than the Credit Limit.
Interest shall accrue on the outstanding principal balance of this Note at the
Adjusted Corporate Base Rate or Adjusted LIBOR Rate as specified by the Borrower
in the Notice of Borrowing. Whenever Borrower desires to make a Borrowing
hereunder, it shall give Bank prior written notice (or telephonic notice
promptly confirmed in writing) of each Loan to be made hereunder, each such
notice to be given prior to 11:00 a.m. (Central time) on the date specified.
Each such notice (each, a "Notice of Borrowing") shall be irrevocable and
specify the aggregate principal amount of the Borrowing to be made pursuant to
such Borrowing, the date of Borrowing, which shall be a Business Day, (the
"Borrowing Date"), whether the Borrowing(s) being requested are to be CBR Loans
or LIBOR Loans and (in the case of LIBOR Loans) the Interest Period or Interest
Periods to be applicable thereto. If no election is specified in the notice then
the Borrowing shall be deemed to be a CBR Loan. The Borrower shall give the same
notice before the expiration of each Interest Period with respect to any LIBOR
Loans. If no such notice is given, then on the expiration of such Interest
Period the Loan will convert to a CBR Loan. The Borrower may convert any CBR
Loan to a LIBOR Loan at any time as long as it complies with the notice
provisions for a LIBOR Loan.
Without in any way limiting the Borrower's obligation to confirm in writing any
telephonic notice, Bank may act without liability upon the basis of any
telephonic notice believed by Bank in good faith to be from the Borrower prior
to receipt of written confirmation. In each such case, Borrower hereby waives
the right to dispute Bank's record of the terms of such telephonic Notice of
Borrowing.
The aggregate principal amount of each Borrowing of LIBOR Loans hereunder shall
not be less than $1,000,000.00, in integral multiples of $50,000.00 and shall
have no more than five LIBOR Loans outstanding at any time; and the aggregate
principal amount of each Borrowing of CBR Loans hereunder shall be not less than
$250,000.00, or, if less, the aggregate amount of the unused Credit Limit.
Notwithstanding anything to the contrary contained in this Note, the rate of
interest payable under this Note shall not exceed the maximum amount Bank
lawfully may charge. If Bank receives anything of
13
<PAGE>
value deemed interest under applicable law which would exceed the maximum amount
of interest permissible under applicable law, or if application of any variable
rate, use of a 360-day year or any other circumstance, including acceleration,
prepayment, or demand, would cause the effective interest rate under this Note
to exceed such maximum rate, then the interest rate under this Note shall be
deemed reduced to such maximum rate, and the excessive interest shall, at the
option of Bank, be applied to the reduction of the outstanding principal balance
under this Note or refunded to Borrower.
The entire outstanding principal balance and all accrued interest thereon shall
be due and payable on the Maturity Date. Until the Maturity Date, Borrower shall
pay interest on CBR Loans monthly on the first (1st) day of each calendar month
commencing on July 1, 1996, and on the Maturity Date. Interest on LIBOR Loans
shall be paid upon the expiration of each Interest Period, upon conversion to a
CBR Loan and on the Maturity Date. The Borrower shall make each payment
hereunder not later than 3 p.m. (Central time) on the date when due, in
immediately available funds to the Bank's Address. If any payment is scheduled
to become due on a day which is not a Business Day, such payment shall instead
become due on the immediately following Business Day.
After maturity, whether upon the lapse of time or by acceleration, all past due
principal, and interest to the extent permitted by law, shall bear interest
until paid at the Corporate Base Rate plus 2.0%. All interest shall be
calculated on the basis of the days actually elapsed over a year deemed to
consist of 360 days. After maturity, whether by acceleration or otherwise,
interest on all Loans shall be payable upon demand.
The Borrower shall have the right at any time and from time-to-time to prepay
any CBR Loan, in whole or in part, without premium or penalty. Any such
prepayment shall increase the unused portion of the Credit Limit available for
borrowing until the Maturity Date. The Borrower shall not have the right to
prepay in whole or part any LIBOR Loan.
The date, amount, type, and (in the case of LIBOR Loans) the Interest Period
with respect to the making or payment of each Loan shall be recorded in records
maintained by the Bank with respect thereto. The failure to record, or any error
in recording, any such Loan or repayment on such schedule (or continuation
thereof) or similar records shall not, however, affect the obligations of
Borrower hereunder to repay the principal amount of the Loans together with all
interest accruing thereon. Each record maintained by the Bank shall constitute
prima facie evidence of the outstanding amount of its Loans hereunder.
In the event the Bank shall incur any loss, cost, expense or premium in
connection with any Loan for any reason, as a result of:
(i) any payment or conversion of a LIBOR Loan on a date other than
the last day of the then applicable Interest Period;
(ii) any failure by the Borrower to borrow, continue, or effect by
conversion any LIBOR Loan on the date specified in the notice
given as required herein; or
(iii) any failure by the Borrower to make any payment of principal or
interest when due on any LIBOR Loan, whether at stated
maturity, by acceleration or otherwise;
then, upon the demand of the Bank, the Borrower shall pay to the Bank such
amount as will reimburse the Bank for such loss, cost or expense. A certificate
of the Bank as to the additional amounts payable pursuant to this paragraph
shall in the absence of manifest error be conclusive of the amount thereof.
This Note is secured by collateral described in the following agreements:
N/A
There may be other security and Borrower acknowledges that omitting to list it
here shall not constitute a waiver or abandonment thereof. The holder of this
Note, in addition to any other rights the holder may have, shall
14
<PAGE>
have the right to offset against amounts due under this Note all deposits,
funds, securities, and other property of Borrower in the possession of the
holder.
If Borrower does not pay any principal or interest when due hereunder, or if
Borrower defaults under or otherwise fails to perform or pay any covenant or
obligation in any agreement that secures this Note or has been executed and
delivered to the holder hereof in connection with the indebtedness evidenced by
this Note, the holder hereof may declare all principal and unpaid accrued
interest to be immediately due and payable. Failure to do so at any time shall
not constitute a waiver of the right of the holder hereof to do so at any other
time.
Borrower and all others who are or become parties to this Note, whether as
makers, endorsers, or guarantors, by becoming parties to this Note waive
presentment for payment, notice of dishonor, protest, notice of protest, and all
other notices and lack of diligence in the enforcement of this Note. Every such
party by becoming a party to this Note assents to each and every extension or
postponement of the time of payment or other indulgence by the holder of this
Note, whenever made, and waives notice thereof.
If this Note is not paid strictly according to its terms, Borrower shall (to the
extent permitted by law) pay all costs of collection, including but not limited
to court costs and attorney's fees and expenses (whether or not there is
litigation), and all costs of the holder hereof incurred in connection with any
proceedings affecting this Note under the United States Bankruptcy Code.
Borrower agrees that it will use the proceeds of this Note for business purposes
(other than agricultural purposes) only, and not for personal, family or
household purposes.
This Note shall be governed by the law of the state of Bank's Address, without
regard to choice or conflict of laws rules.
IF THERE IS MORE THAN ONE UNDERSIGNED AS BORROWER, ALL REFERENCES HEREIN TO
"BORROWER" REFER TO ALL OF THE UNDERSIGNED AND TO EACH OF THEM, AND THEIR
OBLIGATIONS HEREUNDER ARE JOINT AND SEVERAL.
O'REILLY AUTOMOTIVE, INC.
/s/ David E. O'Reilly
By: David E. O'Reilly, President
Borrower's Address: P.O. Box 1897
Springfield, MO 65801-1897
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Balance Sheet at June 30, 1996 (Unaudited) and the
Condensed Consolidated Statement of Income for the Six Months Ended June 30,
1996 (Unaudited) and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,468
<SECURITIES> 9,204
<RECEIVABLES> 12,751
<ALLOWANCES> 386
<INVENTORY> 77,817
<CURRENT-ASSETS> 2,077
<PP&E> 83,266
<DEPRECIATION> 18,419
<TOTAL-ASSETS> 173,340
<CURRENT-LIABILITIES> 26,535
<BONDS> 0
<COMMON> 104
0
0
<OTHER-SE> 145,145
<TOTAL-LIABILITY-AND-EQUITY> 173,340
<SALES> 124,103
<TOTAL-REVENUES> 124,666
<CGS> 73,482
<TOTAL-COSTS> 36,789
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 378
<INTEREST-EXPENSE> 17
<INCOME-PRETAX> 143,395
<INCOME-TAX> 5,360
<INCOME-CONTINUING> 9,035
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,035
<EPS-PRIMARY> 0.87
<EPS-DILUTED> 0
</TABLE>
