O'Reilly Auto bumps repurchase program to $2B

This is the third $500 million increase the board has authorized since launching a three-year repurchase program in January 2011. The board of the auto parts retailer and distributor bumped the repurchase plan by $500 million in August and again in November, before the latest action to increase the program to $2 billion.

 According to a quarterly Securities and Exchange Commissionfiling, the company reported repurchasing $1.2 billion worth of shares by early May 2012.

The goal of the repurchasing program is to return value to shareholders, said Mark Merz, O’Reilly’s director of external reporting and investor relations. “Our board has essentially given authority to company management to go out on the open market and buy back an additional $500 million of O’Reilly’s shares. This means that our shareholders’ earnings increase, since there are fewer shares out on the open market. The less open shares on the market, the greater the value of the shares held by our shareholders.”

“We are fortunate to have longtime shareholders in southwest Missouri, but our shares are also held worldwide,” Merz said. “About 90 percent of our outstanding shares are held by large institutional holders, most of which are mixed mutual funds. The single largest individual shareholder of O’Reilly is T.Rowe Price Group (Nasdaq: TROW), which owns 8 percent of our outstanding shares.”

O’Reilly automotive was founded in Springfield in 1957 and went public in 1993. The company operates 3,809 stores in 39 states, serving both the do-it-yourself and professional service provider markets for automotive aftermarket parts. Texas leads the nation with 563 O’Reilly stores, followed by California, with 474. Missouri is third with 181 stores. O’Reilly’s long-term goal is to have stores in all 50 states, Merz said.