SPRINGFIELD, MO -- O'Reilly Automotive reported record revenues and earnings for the fourth quarter and year, which ended on Dec. 31, 2004. The company said the fourth quarter and full year numbers represent 12 consecutive years of record revenues and earnings and positive comparable store product sales increases since becoming a public company in April 1993.

Net income, before the cumulative effect of accounting change, for the year totaled $124.2 million, up 24.1 percent from $100.1 million for the same period a year ago. Diluted earnings per common share, before the cumulative effect of accounting change, for the year increased 21.2 percent to $2.23 on 55.7 million shares versus $1.84 a year ago on 54.5 million shares. Product sales for the year totaled $1.72 billion, up 13.9 percent from $1.51 billion for 2003. Gross profit for the year increased to $743.2 million (or 43.2 percent of product sales) from $638.3 million (or 42.2 percent of product sales) in 2003, representing an increase of 16.4 percent.

Operating, selling, general and administrative ("OSG&A") expenses for the year increased to $542.3 million (or 31.5 percent of product sales) from $473.1 million (or 31.3 percent of product sales) for 2003, representing an increase of 14.6 percent. The cumulative effect of accounting change resulted in a one-time benefit of $21.9 million, net of taxes, or an additional 39 cents per diluted share, bringing total earnings for the year to $146.1 million or $2.62 per diluted share.

Net income for the fourth quarter totaled $28.5 million, up 19.2 percent from $23.9 million for the same period in 2003. Diluted earnings per common share for the fourth quarter of 2004 increased 18.6 percent to 51 cents on 56 million shares compared to 43 cents for the fourth quarter of 2003 on 55.3 million shares. Product sales for the fourth quarter totaled $427.6 million, up 16.5 percent from $367 million for the same period a year ago. Gross profit for the fourth quarter increased to $186 million (or 43.5 percent of product sales) from $156 million (or 42.5 percent of product sales) for the same period a year ago, representing an increase of 19.2 percent. OSG&A expenses for the fourth quarter of 2004, increased to $139.5 million (or 32.6 percent of product sales) from $117.2 million (or 31.9 percent of product sales) for the same period a year ago, representing an increase of 19 percent.

Comparable store product sales for stores open at least one year increased 8.5 percent and 6.8 percent for the fourth quarter and year, respectively, representing 47 quarters of comparable store product sales increases since becoming a public company in April 1993.

Effective Jan. 1, 2004, O'Reilly changed its method of applying its LIFO accounting policy for inventory costs. Under the new method, the company has inventoried certain procurement, warehousing and distribution center costs. The previous method was to recognize those costs as incurred, reported as a component of costs of goods sold. The Company believes the new method is preferable as it better matches revenues and expenses and is the prevalent method used by other entities within the automotive aftermarket. The cumulative effect of this change was a one-time benefit of $21.9 million, net of income taxes, or an additional 39 cents per diluted share.

The change increased income before income taxes and cumulative effect of accounting change by $4.4 million and $123,000 for the year and fourth quarter, respectively. The change increased income before cumulative effect of accounting change by $2.7 million (or 5 cents per diluted share) and $76,000 (or zero cents per diluted share) for the year and fourth quarter, respectively.

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