O’Reilly Posts Record Revenues,CSK Investigation Still Looms

O’Reilly Automotive, Inc announced record revenues and earnings for the second quarter ended June 30, 2010, but an investigation into its CSK business still weighs onone of hte U.S.’s largest auto parts chain.
Sales for the second quarter ended June 30, 2010, totalled $1.38 billion, up 10% from $1.25 billion for the same period a year ago. Gross profit for the second quarter ended June 30, 2010, increased to $673 million (or 48.7% of sales) from $604 million (or 48.2% of sales) for the second quarter of 2009, representing an increase of 11%. Selling, General and Administrative (“SG&A”) expenses increased to $476 million (or 34.5% of sales) for the second quarter of 2010 from $454 million (or 36.3% of sales) for the second quarter of 2009, representing an increase of 5%. Operating income increased to $181 million (or 13.1% of sales) for the second quarter of 2010 from $150 million (or 12.0% of sales), representing an increase of 21%.
All figures in U.S. dollars.
Net income for the second quarter ended June 30, 2010, totalled $100 million, up 16% from $86 million for the same period in 2009. Diluted earnings per common share for the second quarter of 2010 increased 15% to $0.71 on 141.1 million shares compared to $0.62 for the second quarter of 2009 on 137.5 million shares.
The company’s second quarter and year-to-date results include a charge related to the ongoing, legacy United States Department of Justice (DOJ) investigation of CSK Auto Corporation (CSK).
Prior to O’Reilly’s acquisition of CSK in July of 2008, the DOJ began an investigation of CSK relating to CSK’s historical accounting practices. The charge of $15 million in the second quarter of 2010 represents an increase in the accrual for the estimated costs to resolve the DOJ investigation, including potential settlement-related payments to the DOJ, future costs of cooperation with the DOJ, and associated legal and documentation costs.
O’Reilly states additionally, however, there can be no assurance that the discussions with the DOJ will result in a resolution of these matters within the amount currently accrued by O’Reilly.

Click on www.autoserviceworld.com for more news.