O’Reilly Automotive Inc. has announced the completion of its previously announced leadership succession plan and updated the target leverage ratio as part of its long-term capital structure. During its annual meeting of shareholders, Greg Henslee, who has served as the company’s CEO since February of 2005, was elected to serve as a director on the company’s board of directors and was subsequently appointed by the board to serve as executive vice chairman. In conjunction with Henslee’s election to the board, Greg Johnson was promoted to CEO and co-president, and Jeff Shaw was promoted to chief operating officer and co-president.
“With Greg Henslee’s election to the board and accepting the executive vice chairman position, we have successfully completed our leadership succession plan,” said David O’Reilly, O’Reilly’s executive chairman of the board. “Greg Johnson and Jeff Shaw have assumed all of the day-to-day operational responsibility of the business, and we are very excited to continue O’Reilly’s success under their leadership. I would also like to take this opportunity to express my deep gratitude to Charles O’Reilly Jr. and Paul Lederer who completed their final terms as board members today. We are extremely grateful to both gentlemen for their long years of loyal service to the company, and I would to thank each of them for their significant contributions to our long-term success.”
During the quarterly board meeting following the annual meeting of shareholders, the board approved a change to the company’s target rent-adjusted debt to EBITDAR leverage ratio, updating the previous target range originally established in January of 2011 at 2 times to 2.25 times to a target ratio of 2.50 times, using six-times capitalized rent.
Johnson stated, “We established our original target leverage ratio range of 2 to 2.25 times over seven years ago, and based on our profitable growth and effective management of our capital, we believe it is appropriate to update our target leverage ratio to 2.50 times, which will provide us with increased financial flexibility and liquidity while also maintaining our historically prudent financial policies. We believe this updated ratio is the appropriate capital structure for our company, and we remain committed to maintaining our investment-grade credit ratings. Adjusted debt to EBITDAR is a very important metric but only one of several we use to manage our capital structure, and we will reach the new target at the appropriate time.”