Stock Segment: O'Reilly grows net income by 9 percent

The Springfield-based retailer announced its fourth-quarter and annual results after market close Feb. 19.

Net income for the quarter ended Dec. 31 was $40.6 million, a 0.6 percent increase from $40.4 million in the same period in 2006. Sales were $604 million, up 8.2 percent from $558 million a year ago, and earnings per share held steady at 35 cents on 116.3 million shares, compared to 35 cents on 115.4 million shares a year ago.

For the year, net income was $194 million, up 8.9 percent from the previous year. Sales grew 10.5 percent to $2.52 billion, and earnings per share for the year were $1.67, compared to $1.55 a year ago.

O’Reilly added 56 stores in the fourth quarter, for a total of 190 new stores in 2007.

“In spite of a very challenging economic environment in 2007, we were able to increase net income by 8.9 percent,” CEO Greg Henslee in a company news release. “Our focus remains on customer service and gaining market share in new and existing markets.”

In an attempt to do just that, O’Reilly earlier this month proposed a takeover bid to shareholders of CSK Auto Corp., which has 1,349 stores in the western United States – an area O’Reilly has yet to cover. Less than a week later, O’Reilly announced it had entered a standstill agreement with CSK.

O’Reilly shares (Nasdaq: ORLY) closed Feb. 20 at $27.99, compared to a 52-week range of $24.08 to $38.84.

Empire District Electric posts ice storm-related losses

Empire District Electric Co. reported a loss in 2007 net income caused in part by expenses incurred during the year’s January and December ice storms, which both hit the utility’s service area hard.

The year’s net income from continuing operations was a loss of $33,000. Empire’s earnings were $33.2 million, or $1.09 per share, down from $39.3 million, or $1.39 per share, in 2006, according to its Jan. 31 annual filing.

The fourth quarter, which ended Dec. 31, showed an earnings loss of $400,000, or a loss of 1 cent per share, compared to $8.2 million in earnings, or 27 cents per share, in fourth-quarter 2006.

A major portion of Empire’s service area was hit by a severe ice storm in December. Empire incurred about $18.6 million in repair costs, of which $9.2 million was capitalized, $7.9 million was deferred for regulatory treatment and $1.5 million was expensed in December. Effects of the storm, when combined with effects of the January 2007 ice storm that also hit Empire’s service area, resulted in a $5.4 million increase in maintenance costs in 2007.

Also during the fourth quarter, Empire’s Asbury plant was taken offline for regularly scheduled maintenance. That outage is estimated to have added $8.7 million in incremental expenses. The outage was extended when the generator failed inspection in December, increasing expenses by $3.5 million.

Shares (NYSE: EDE) closed Feb. 20 at $21.81, compared to a 52-week range of $21.09 to $26.13.

Jack Henry income up 5 percent

Jack Henry & Associates Inc.’s second-quarter fiscal 2008 net income grew 5 percent compared to the same quarter a year earlier.

The Monett-based company, which provides integrated computer systems and processes debit card transactions for financial institutions, announced its results Feb. 6 for the quarter ended Dec. 31.

Net income was $29.2 million, or 32 cents per share, up from $27.8 million, or 30 cents per share, a year ago. Revenue was $192.2 million, up 15 percent from $167.2 million in second-quarter 2007.

Gross profit increased 16 percent to $154.3 million.

CEO Jack Prim in a news release pointed to revenue growth in the banking and credit union segments – up 14 percent and 18 percent, respectively – and level banking gross margins and increased credit union gross margins.

Backlog increased 7 percent from a year ago and, as of Dec. 31, totaled $240.2 million.

Jack Henry Shares (Nasdaq: JKHY) closed Feb. 20 at $24.80, compared to a 52-week range of $22.22 to $29.24.

Leggett & Platt posts annual loss

Carthage-based Leggett & Platt posted a net loss for the fourth quarter due to initial charges associated with the company’s strategy, announced in November, to eliminate underperforming areas of its portfolio.

The diversified manufacturer released its quarterly and year-end results Jan. 24.

The quarter showed a loss of $213 million, or a loss of $1.21 per share. The results include $143 million of goodwill impairment in the fixtures and display division operations, and $132 million in asset impairments associated with businesses Leggett intends to divest, according to a company news release. The company has “now incurred virtually all of the one-time costs associated with the strategic plan,” according to the release.

The loss also was attributed to lower sales in residential-related businesses, increased medical and energy costs and currency impacts.

Fourth-quarter sales from continuing operations, however, were $1.05 billion, up 1 percent from the same period a year earlier.

Earnings per share for the year were a loss of 6 cents. Sales from continuing operations fell 1 percent in 2007 to $4.31 billion, but cash from operations was a record $614 million, up 28 percent from 2006.

Leggett’s 2008 outlook calls for earnings per share between 95 cents and $1.30. The guidance includes between 5 cents and 10 cents per share in restructuring-related costs but doesn’t take into account potential earnings from discontinued operations or gains or losses from the divestitures, according to the release.

Sales from continuing operations this year are expected to be about $4.2 billion, or 2 percent lower than 2007. The decrease reflects the planned elimination of about $100 million in revenue with unacceptable profit margins in certain areas.

“Shareholder returns have suffered recently, but we believe our actions will re-establish Leggett as a more profitable company – one that generates above-average total shareholder return,” President and CEO David S. Haffner said in the release.

Shares (NYSE: LEG) closed Feb. 20 at $17.39, compared to a 52-week range of $15.50 to $24.73.

Decorize announces operating loss

Decorize Inc. posted a fiscal 2008 second-quarter operating loss, though it marked an improvement over its loss in the previous quarter.

The Springfield-based company had a $90,000 operating loss in the quarter ended Dec. 31, up from a $190,000 loss in the first quarter but down from a $270,000 operating profit in second-quarter fiscal 2007, according to its quarterly report filed Feb. 14. Decorize’s fiscal year ends June 30.

The company had an overall net loss of $290,000, down from net income that topped $51,000 in second-quarter 2007.

Net sales for the quarter were $3.5 million, down from $4.5 million the same period a year ago.

Officials attribute the decline in sales to a $1.7 million drop in large retailer revenue, because larger retailers have longer sales cycles, leading to more sporadic sales in that segment, according to the report. Revenues from specialty retailers, meanwhile, were up by $700,000.

Decorize coupled its earnings release with a report that new sales orders for its GuildMaster brand grew 80 percent at recent furniture markets in Atlanta, Dallas and Las Vegas, according to a news release. Manufacturers including Ashley Furniture and retailers including Pottery Barn have introduced Decorize products in their stores during the last few months, the release said.

Decorize shares (OTC: DCZ) closed Feb. 20 at 20 cents, compared to a 52-week range of 14 cents to 87 cents.