O’Reilly Automotive Earnings Call Insights: Expansion and Upper Midwest Markets
Colin McGranahan – Sanford C. Bernstein & Co.: First question just on the expansion. Moving into Florida, opening the Lakeland DC and pushing further south, that’s obviously a newer market for you and then moving into the Northeast as well, can you talk a little bit about what you’re seeing in Florida so far as you expand there and expectations for the Northeast just in terms of store performance, difference in the competitive environment, things like that?
Gregory L. Henslee – Co-President and CEO: It’s still early in central Florida, more into southern Florida yet, we are in the northern Florida and Panhandle and have been for a while. Our stores there do very well. It’s a pretty good real estate market for us. Our exploration so far has yielded good results from a location standpoint and we’ve got several stores going in down there and we expect to do really well in Orlando and Tampa markets and several small markets around that area, so we are excited about it. We think it’s a great opportunity for us and we look forward to having a facility in Lakeland and it will allow us to get further south into Florida. In the Northeast its way early, we have done a lot of looking around up there as we’ve contemplated acquiring a company or two up there and as you know we acquired VIP. Lot of cars, lot of traffic, the real estate market obviously is a little more difficult but for most part where we would locate the majority of our stores outside of the major, major metro areas, we would have part stores in Downtown Manhattan for instance. It looks pretty good. We are excited about the opportunity to expand up there and we will use the VIP acquisition as a means for us to expand South out to the far Northeast and then we will continue to use our existing store base to expand up into the Northeast. At some point in the future will be expanding our distribution capability in that area.
Colin McGranahan – Sanford C. Bernstein & Co.: Just a quick follow-up on CSK. Can you talk a little bit about the relative performance differential to stores in the middle of the country versus the West Coast and how that contributed to the overall comp?
Gregory L. Henslee – Co-President and CEO: I really don’t have a – I mean the West Coast obviously performs very well. They performed better than the core O’Reilly stores, although the core O’Reilly stores performed well. The upper Midwest stores were our poorest performing stores and as I said in prepared comments that that 25% of the stores that we comprise is maybe being the weather affected stores caused about a 200 basis point decrease in our overall comp performance. We would say that maybe the disparity between the non-weather related stores and the weather affected stores to be somewhere above 700 basis points something like that.
Upper Midwest Markets
Dan Wewer – Raymond James: Just a follow-up on that comment, you noted that the gap between the cold and warm weather markets are 700 or 800 basis points, but did you also indicate in your prepared comments that by the end of the quarter, those upper Midwest markets were performing in line with the Company average?
Gregory L. Henslee – Co-President and CEO: They were comping better. They weren’t – they would have been – it varies by region. If you put them as a whole, they would have been comping under the average. But they had sequentially improved significantly end of December.
Dan Wewer – Raymond James: Do you think that we have crossed the hurdle where the weather issues that have been impacting those markets are now behind us and when you look at 2013, are you expecting those markets to perhaps outperform your southwestern and western stores given the easy comparisons?
Jeff M. Shaw – SVP, Sales and Operations: Dan, it’s hard to really fully get our arms around the effect of the unusual winter we had last year, to some degree in many markets, a little bit of a soft winter, this winter. There is no question that extremes put pressure on automobiles and that there’s some hard part failures that result from the cold and hot weather and the roads, they get potholes in them and so forth. I guess to answer your question; yes I would expect those stores that have not performed well as the weather normalizes to perform much better on the easier comparison. So yes, I think they will.
Dan Wewer – Raymond James: Just then as my follow-up question for Tom, you noted that you are not expecting any improvement in your payables to inventory rate in 2013. I would certainly understanding that the rate of increase could slow, but I’m surprised that you’re not expecting any improvement. Could you, again, maybe walk us through the reasons for that?
Thomas G. McFall – CFO, EVP of Finance: The primary reason is we’re going to have to have some substantial gains to stay where we are. When we look at the math and we talk about the store level inventory build this year of $150 million. When you add additional parts to the stores and that kind of maths, we’re able to get special dating on those orders. So, if we have a year dating on those orders that’s coming to the numerator and denominator at a 100% and they’re going to come due this year. So, we’re going to have to continue to make progress with our vendors through financing program and through other avenues to maintain that percentage, and if you we look back to the beginning of the year, our guidance was $70 million to $75 million, those stock up orders helped us to pass that level this year. So, we’ve got some work to do to stay where we are.
Dan Wewer – Raymond James: So it would not if your inventory per store is flat year-over-year in 2013, that would lead to faster inventory turns right? Then that mathematically would benefit the payables to inventory rate?
Thomas G. McFall – CFO, EVP of Finance: If you look at our days in payables, it’s starting to get beyond where our turns are, so it’s more of a bigger drivers when do those payments come due for non-typical orders.
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