HOUSTON — Group 1 Automotive, Inc., a Fortune 500 automotive retailer, reported record 2012 third-quarter net income of $31.3 million and record diluted earnings per common share of $1.32 for the period ended Sept. 30, 2012. Net income increased 31.6 percent from the comparable, adjusted prior-year period which, as shown in the attached reconciliation table, excluded a non-cash asset impairment charge.
Year-to-date 2012 adjusted net income increased 31.4 percent, to a record $84.2 million. Adjusted diluted earnings per common share were $3.54, making this the best first nine-month results in the company’s history.
“Group 1 reported all-time, record-setting revenues, gross profit, net income and diluted earnings per common share in the third quarter, driven by strong growth in all segments of the business, including record results in finance and insurance,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “Group 1’s new vehicle unit sales continue to outpace industry retail sales, reflecting the strength of our brand mix and strong execution by our operating team. In addition, I am especially proud of the growth our team has delivered in used retail unit sales, where we have significantly outperformed the market this year as well.”
Third-Quarter 2012 Results (on a year-over-year basis unless otherwise noted)
- Setting new all-time records, total gross profit grew 17.1 percent on 25.9 percent higher revenues of $2.0 billion.
- New vehicle gross profit increased 18.5 percent on 32.3 percent higher revenues, as the company retailed 34.0 percent more units. Average vehicle selling price declined 1.2 percent, to $33,050, as the mix shifted from luxury and trucks to mid-line imports.
- Retail used vehicle average selling price increased 2.6 percent, to $20,612, and the company retailed 19.5 percent more units, driving the 17.7 percent gross profit and 22.6 percent revenue growth.
- Parts and service gross profit increased 8.1 percent on revenue growth of 7.1 percent.
- Finance and insurance gross profit per retail unit increased $64, to an all-time record $1,220, as penetration rates improved in both finance and vehicle service contracts.
- Selling, general and administrative expenses as a percent of revenues improved 110 basis points, to 10.9 percent.
- Selling, general and administrative expenses as a percent of gross profit improved to 74.2 percent, from both the prior-year period and the second quarter on a comparable basis, as the company continued to leverage gross profit growth.
- Operating margin remained flat, at 3.4 percent, from the prior-year and second-quarter periods on a comparable basis.
Corporate Development
During the third quarter, Group 1 purchased a Hyundai franchise in Houston that is estimated to generate $30.0 million in annual revenues. The company also disposed of a Lincoln franchise in Houston that generated trailing-12-month revenues of $17.6 million.
In October, Group 1 acquired a Hyundai dealership in Oklahoma City, Okla., that is estimated to generate $45.0 million in annual revenues. The company also disposed of a Nissan dealership and a Mazda dealership in the Boston area that generated $67.2 million in combined annual revenues during the last 12 months.
Year to date, Group 1 has acquired 14 franchises that are expected to generate $580.0 million in annual revenues and disposed of three franchises that generated $84.8 million of annual revenues.
Third-Quarter Earnings Conference Call
Group 1’s senior management will host a conference call today at 10 a.m. ET to discuss the third-quarter financial results and the company’s outlook and strategy.
The conference call will be simulcast live on the Internet at www.group1auto.com, then click on ‘Investor Relations’ and then ‘Events’ or through this link: http://www.group1corp.com/news/events.aspx. A replay will be available for 30 days.
The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:
Domestic: 1.877.317.6789
International: 1.412.317.6789
Conference ID: 10019588
A telephonic replay will be available following the call through Nov. 2 at 9 a.m. ET by dialing:
Domestic: 1.877.344.7529
International: 1.412.317.0088
Conference ID: 10019588
About Group 1 Automotive, Inc.
Group 1 owns and operates 121 automotive dealerships, 158 franchises, and 30 collision centers in the United States and the United Kingdom that offer 32 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related vehicle financing, service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.
Group 1 Automotive can be reached on the Internet at www.group1auto.com.
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” “foresee,” “may” or “will” and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
Investor Contacts:
Kim Paper Canning
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | [email protected]
Media Contacts:
Pete DeLongchamps
V.P. Financial Services and Manufacturer Relations
Group 1 Automotive, Inc.
713-647-5770 | [email protected]
or
Clint Woods
Pierpont Communications, Inc.
713-627-2223 | [email protected]
| Group 1 Automotive, Inc. | |||||||||||
| Consolidated Statements of Operations | |||||||||||
| (Unaudited) | |||||||||||
| (In thousands, except per share amounts) | |||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||
| REVENUES: | |||||||||||
| New vehicle retail sales | $ 1,141,286 | $ 862,660 | 32.3 | $ 3,134,591 | $ 2,457,255 | 27.6 | |||||
| Used vehicle retail sales | 462,395 | 377,115 | 22.6 | 1,333,603 | 1,053,609 | 26.6 | |||||
| Used vehicle wholesale sales | 78,424 | 69,051 | 13.6 | 218,415 | 191,609 | 14.0 | |||||
| Parts and service | 224,990 | 210,067 | 7.1 | 658,404 | 609,108 | 8.1 | |||||
| Finance and insurance | 69,477 | 51,496 | 34.9 | 192,130 | 142,255 | 35.1 | |||||
| Total revenues | 1,976,572 | 1,570,389 | 25.9 | 5,537,143 | 4,453,836 | 24.3 | |||||
| COST OF SALES: | |||||||||||
| New vehicle retail sales | 1,074,736 | 806,498 | 33.3 | 2,951,379 | 2,304,057 | 28.1 | |||||
| Used vehicle retail sales | 424,663 | 345,048 | 23.1 | 1,220,628 | 958,094 | 27.4 | |||||
| Used vehicle wholesale sales | 79,067 | 69,254 | 14.2 | 216,031 | 187,651 | 15.1 | |||||
| Parts and service | 106,875 | 100,836 | 6.0 | 312,106 | 289,295 | 7.9 | |||||
| Total cost of sales | 1,685,341 | 1,321,636 | 27.5 | 4,700,144 | 3,739,097 | 25.7 | |||||
| GROSS PROFIT | 291,231 | 248,753 | 17.1 | 836,999 | 714,739 | 17.1 | |||||
| SELLING, GENERAL AND | |||||||||||
| ADMINISTRATIVE EXPENSES | 216,082 | 188,185 | 14.8 | 629,521 | 547,120 | 15.1 | |||||
| DEPRECIATION AND | |||||||||||
| AMORTIZATION EXPENSE | 8,096 | 6,845 | 18.3 | 23,074 | 19,881 | 16.1 | |||||
| ASSET IMPAIRMENTS | – | 3,644 | (100.0) | 288 | 4,008 | (92.8) | |||||
| OPERATING INCOME | 67,053 | 50,079 | 33.9 | 184,116 | 143,730 | 28.1 | |||||
| OTHER EXPENSE: | |||||||||||
| Floorplan interest expense | (7,942) | (6,964) | 14.0 | (23,424) | (20,245) | 15.7 | |||||
| Other interest expense, net | (9,619) | (8,644) | 11.3 | (27,849) | (24,811) | 12.2 | |||||
| INCOME BEFORE INCOME TAXES | 49,492 | 34,471 | 43.6 | 132,843 | 98,674 | 34.6 | |||||
| PROVISION FOR INCOME TAXES | (18,157) | (12,977) | 39.9 | (49,766) | (37,135) | 34.0 | |||||
| NET INCOME | $ 31,335 | $ 21,494 | 45.8 | $ 83,077 | $ 61,539 | 35.0 | |||||
| DILUTED INCOME PER SHARE | $ 1.32 | $ 0.91 | 45.1 | $ 3.50 | $ 2.57 | 36.2 | |||||
| Weighted average dilutive common shares outstanding | 22,458 | 22,219 | 1.1 | 22,501 | 22,533 | (0.1) | |||||
| Weighted average participating securities | 1,245 | 1,392 | (10.6) | 1,257 | 1,392 | (9.7) | |||||
| Total weighted average shares outstanding | 23,703 | 23,611 | 0.4 | 23,758 | 23,925 | (0.7) | |||||
| Group 1 Automotive, Inc. | |||||
| Consolidated Balance Sheets | |||||
| (Dollars in thousands) | |||||
| September 30, | December 31, | ||||
| 2012 | 2011 | % Change | |||
| ASSETS: | (Unaudited) | ||||
| CURRENT ASSETS: | |||||
| Cash and cash equivalents | $ 38,822 | $ 14,895 | 160.6 | ||
| Contracts in transit and vehicle receivables, net | 150,170 | 167,507 | (10.4) | ||
| Accounts and notes receivable, net | 98,106 | 92,775 | 5.7 | ||
| Inventories, net | 1,107,193 | 867,470 | 27.6 | ||
| Deferred income taxes | 19,223 | 16,012 | 20.1 | ||
| Prepaid expenses and other current assets | 33,217 | 16,925 | 96.3 | ||
| Total current assets | 1,446,731 | 1,175,584 | 23.1 | ||
| PROPERTY AND EQUIPMENT, net | 649,811 | 585,633 | 11.0 | ||
| GOODWILL AND INTANGIBLE FRANCHISE RIGHTS | 759,068 | 702,145 | 8.1 | ||
| OTHER ASSETS | 11,175 | 12,981 | (13.9) | ||
| Total assets | $ 2,866,785 | $ 2,476,343 | 15.8 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||||
| CURRENT LIABILITIES: | |||||
| Floorplan notes payable – credit facility | $ 910,849 | $ 718,945 | 26.7 | ||
| Offset account related to floorplan notes payable – credit facility | (128,264) | (109,207) | 17.5 | ||
| Floorplan notes payable – manufacturer affiliates | 172,738 | 155,980 | 10.7 | ||
| Current maturities of long-term debt and short-term financing | 30,293 | 14,663 | 106.6 | ||
| Current liabilities from interest rate risk management activities | 361 | 7,273 | (95.0) | ||
| Accounts payable | 164,922 | 148,048 | 11.4 | ||
| Accrued expenses | 117,892 | 109,245 | 7.9 | ||
| Total current liabilities | 1,268,791 | 1,044,947 | 21.4 | ||
| 2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of | |||||
| $182,753 at September 30, 2012 and December 31, 2011) | 150,465 | 144,985 | 3.8 | ||
| 3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of | |||||
| $115,000 at September 30, 2012 and December 31, 2011) | 79,854 | 77,401 | 3.2 | ||
| MORTGAGE FACILITY, net of current maturities | 54,401 | 38,873 | 39.9 | ||
| OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, | |||||
| net of current maturities | 224,787 | 184,237 | 22.0 | ||
| CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, | |||||
| net of current maturities | 36,587 | 37,105 | (1.4) | ||
| DEFERRED INCOME TAXES | 90,548 | 78,459 | 15.4 | ||
| LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES | 44,708 | 26,766 | 67.0 | ||
| OTHER LIABILITIES | 41,047 | 36,470 | 12.6 | ||
| COMMITMENTS AND CONTINGENCIES | |||||
| TEMPORARY EQUITY – REDEEMABLE EQUITY PORTION OF THE | |||||
| 3.00% CONVERTIBLE SENIOR NOTES | 33,313 | – | 100.0 | ||
| STOCKHOLDERS’ EQUITY: | |||||
| Common stock | 260 | 260 | – | ||
| Additional paid-in capital | 334,942 | 363,375 | (7.8) | ||
| Retained earnings | 664,124 | 591,037 | 12.4 | ||
| Accumulated other comprehensive loss | (34,288) | (29,236) | 17.3 | ||
| Treasury stock | (122,754) | (118,336) | 3.7 | ||
| Total stockholders’ equity | 842,284 | 807,100 | 4.4 | ||
| Total liabilities and stockholders’ equity | $ 2,866,785 | $ 2,476,343 | 15.8 | ||
| KEY DEBT COVENANT METRICS: | |||||
| Senior secured adjusted leverage ratio (must be less than 3.75) | 2.38 | 2.46 | |||
| Total adjusted leverage ratio (must be less than 5.50) | 3.43 | 3.65 | |||
| Fixed charge coverage ratio (must be greater than 1.35) | 2.04 | 1.94 | |||
| Group 1 Automotive, Inc. | ||||||||||||
| Consolidated Statements of Adjusted Cash Flows from Operating Activities | ||||||||||||
| (Unaudited) | ||||||||||||
| (In thousands) | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2012 | 2011 | % Change | 2012 | 2011 | % Change | |||||||
| Net income | $ 31,335 | $ 21,494 | 45.8 | $ 83,077 | $ 61,539 | 35.0 | ||||||
| Adjustments to reconcile net income to net cash | ||||||||||||
| provided by operating activities: | ||||||||||||
| Asset impairments | – | 3,644 | (100.0) | 288 | 4,008 | (92.8) | ||||||
| Depreciation and amortization | 8,096 | 6,845 | 18.3 | 23,074 | 19,881 | 16.1 | ||||||
| Deferred income taxes | 4,680 | 2,170 | 115.7 | 10,755 | 16,280 | (33.9) | ||||||
| Gain on disposition of assets and franchise | (543) | (181) | 200.0 | (2,131) | (967) | 120.4 | ||||||
| Stock-based compensation | 3,028 | 2,775 | 9.1 | 8,943 | 8,333 | 7.3 | ||||||
| Amortization of debt discount and issue costs | 3,271 | 3,023 | 8.2 | 9,659 | 8,871 | 8.9 | ||||||
| Other | 537 | 87 | 517.2 | 594 | (15) | 4,060.0 | ||||||
| Changes in operating assets and liabilities, net of | ||||||||||||
| effects of acquisitions and dispositions: | ||||||||||||
| Accounts payable and accrued expenses | 1,671 | 14,833 | (88.7) | 19,294 | 39,722 | (51.4) | ||||||
| Accounts and notes receivable | 21,400 | (55) | 39,009.1 | 6,680 | 3,908 | 70.9 | ||||||
| Inventories | (33,063) | 58,901 | (156.1) | (193,145) | 111,704 | (272.9) | ||||||
| Contracts-in-transit and vehicle receivables | 1,264 | 5,398 | (76.6) | 25,135 | 13,525 | 85.8 | ||||||
| Prepaid expenses and other assets | 360 | (4,477) | 108.0 | 6,575 | (3,454) | 290.4 | ||||||
| Floorplan notes payable – credit facility (1) | 24,214 | (83,371) | 129.0 | 175,795 | (156,657) | 212.2 | ||||||
| Floorplan notes payable – manufacturer affiliates (2) | (2,902) | (13,416) | (78.4) | (5,979) | (7,550) | (20.8) | ||||||
| Deferred revenues | (704) | (297) | 137.0 | (110) | (1,245) | (91.2) | ||||||
| Adjusted net cash provided by operating activities | $ 62,644 | $ 17,373 | 260.6 | $ 168,504 | $ 117,883 | 42.9 | ||||||
| (1) | Excludes net acquisition/(disposition) related activity of $397 and $16,109 and for the three and nine months ended September 30, 2012, respectively, and $20,476 for the nine months ended September 30, 2011. | |||||||||||
| (2) | Excludes net acquisition/(disposition) related activity of $26,578 and for the nine months ended September 30, 2011. | |||||||||||
| Group 1 Automotive, Inc. | |||||||||
| Additional Information – Consolidated | |||||||||
| (Unaudited) | |||||||||
| Three Months Ended | Nine Months Ended | ||||||||
| September 30, | September 30, | ||||||||
| 2012 (%) | 2011 (%) | 2012 (%) | 2011 (%) | ||||||
| NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: | |||||||||
| Region | Geographic Market | ||||||||
| East | Massachusetts | 9.6 | 11.2 | 10.0 | 11.6 | ||||
| New Jersey | 5.0 | 4.8 | 5.0 | 5.5 | |||||
| Georgia | 3.8 | 3.1 | 3.5 | 3.5 | |||||
| New Hampshire | 2.8 | 2.8 | 2.9 | 3.1 | |||||
| New York | 2.5 | 3.5 | 3.0 | 3.7 | |||||
| Louisiana | 2.1 | 2.7 | 2.5 | 3.0 | |||||
| Mississippi | 1.8 | 2.0 | 2.0 | 2.0 | |||||
| South Carolina | 1.7 | 1.4 | 1.8 | 1.4 | |||||
| Florida | 1.7 | 0.7 | 1.2 | 0.7 | |||||
| Alabama | 0.9 | 1.4 | 1.0 | 1.2 | |||||
| Maryland | 0.6 | 0.7 | 0.6 | 0.8 | |||||
| 32.5 | 34.3 | 33.5 | 36.5 | ||||||
| West | Texas | 36.2 | 38.2 | 36.7 | 34.9 | ||||
| California | 14.5 | 12.9 | 14.5 | 14.0 | |||||
| Oklahoma | 8.0 | 8.5 | 7.8 | 8.3 | |||||
| Kansas | 1.4 | 0.9 | 1.4 | 1.0 | |||||
| 60.1 | 60.5 | 60.4 | 58.2 | ||||||
| International | United Kingdom | 7.4 | 5.2 | 6.1 | 5.3 | ||||
| 100.0 | 100.0 | 100.0 | 100.0 | ||||||
| NEW VEHICLE UNIT SALES BRAND MIX: | |||||||||
| Toyota/Scion/Lexus | 30.8 | 28.7 | 30.9 | 30.6 | |||||
| Nissan/Infiniti | 12.0 | 15.2 | 11.9 | 14.0 | |||||
| Honda/Acura | 11.1 | 9.3 | 11.2 | 11.1 | |||||
| BMW/MINI | 10.1 | 13.1 | 10.7 | 13.2 | |||||
| Ford | 8.8 | 10.1 | 9.2 | 8.5 | |||||
| Volkswagen/Audi/Porsche | 8.3 | 2.8 | 6.5 | 2.5 | |||||
| GM | 5.5 | 6.2 | 5.8 | 5.3 | |||||
| Daimler | 4.3 | 5.0 | 4.6 | 5.5 | |||||
| Chrysler | 4.3 | 5.0 | 4.4 | 4.5 | |||||
| Other | 4.8 | 4.6 | 4.8 | 4.8 | |||||
| 100.0 | 100.0 | 100.0 | 100.0 | ||||||
| NEW VEHICLE UNIT SALES OTHER MIX: | |||||||||
| Import | 54.7 | 52.1 | 55.0 | 54.3 | |||||
| Luxury | 27.6 | 26.7 | 26.4 | 27.6 | |||||
| Domestic | 17.7 | 21.2 | 18.6 | 18.1 | |||||
| 100.0 | 100.0 | 100.0 | 100.0 | ||||||
| Car | 57.4 | 53.5 | 57.0 | 55.1 | |||||
| Truck | 42.6 | 46.5 | 43.0 | 44.9 | |||||
| 100.0 | 100.0 | 100.0 | 100.0 | ||||||
| Group 1 Automotive, Inc. | ||||||||||||
| Additional Information – Consolidated | ||||||||||||
| (Unaudited) | ||||||||||||
| (Dollars in thousands, except per unit amounts) | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2012 | 2011 | % Change | 2012 | 2011 | % Change | |||||||
| REVENUES: | ||||||||||||
| New vehicle retail sales | $ 1,141,286 | $ 862,660 | 32.3 | $ 3,134,591 | $ 2,457,255 | 27.6 | ||||||
| Used vehicle retail sales | 462,395 | 377,115 | 22.6 | 1,333,603 | 1,053,609 | 26.6 | ||||||
| Used vehicle wholesale sales | 78,424 | 69,051 | 13.6 | 218,415 | 191,609 | 14.0 | ||||||
| Total used | 540,819 | 446,166 | 21.2 | 1,552,018 | 1,245,218 | 24.6 | ||||||
| Parts and service | 224,990 | 210,067 | 7.1 | 658,404 | 609,108 | 8.1 | ||||||
| Finance and insurance | 69,477 | 51,496 | 34.9 | 192,130 | 142,255 | 35.1 | ||||||
| Total | $ 1,976,572 | $ 1,570,389 | 25.9 | $ 5,537,143 | $ 4,453,836 | 24.3 | ||||||
| GROSS MARGIN %: | ||||||||||||
| New vehicle retail sales | 5.8 | 6.5 | 5.8 | 6.2 | ||||||||
| Used vehicle retail sales | 8.2 | 8.5 | 8.5 | 9.1 | ||||||||
| Used vehicle wholesale sales | (0.8) | (0.3) | 1.1 | 2.1 | ||||||||
| Total used | 6.9 | 7.1 | 7.4 | 8.0 | ||||||||
| Parts and service | 52.5 | 52.0 | 52.6 | 52.5 | ||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | ||||||||
| Total | 14.7 | 15.8 | 15.1 | 16.0 | ||||||||
| GROSS PROFIT: | ||||||||||||
| New vehicle retail sales | $ 66,550 | $ 56,162 | 18.5 | $ 183,212 | $ 153,198 | 19.6 | ||||||
| Used vehicle retail sales | 37,732 | 32,067 | 17.7 | 112,975 | 95,515 | 18.3 | ||||||
| Used vehicle wholesale sales | (643) | (203) | 216.7 | 2,384 | 3,958 | (39.8) | ||||||
| Total used | 37,089 | 31,864 | 16.4 | 115,359 | 99,473 | 16.0 | ||||||
| Parts and service | 118,115 | 109,231 | 8.1 | 346,298 | 319,813 | 8.3 | ||||||
| Finance and insurance | 69,477 | 51,496 | 34.9 | 192,130 | 142,255 | 35.1 | ||||||
| Total | $ 291,231 | $ 248,753 | 17.1 | $ 836,999 | $ 714,739 | 17.1 | ||||||
| UNITS SOLD: | ||||||||||||
| Retail new vehicles sold | 34,532 | 25,777 | 34.0 | 95,386 | 74,578 | 27.9 | ||||||
| Retail used vehicles sold | 22,433 | 18,770 | 19.5 | 65,186 | 52,700 | 23.7 | ||||||
| Wholesale used vehicles sold | 12,049 | 9,697 | 24.3 | 33,287 | 27,246 | 22.2 | ||||||
| Total used | 34,482 | 28,467 | 21.1 | 98,473 | 79,946 | 23.2 | ||||||
| AVERAGE RETAIL SALES PRICE: | ||||||||||||
| New vehicle retail | $ 33,050 | $ 33,466 | (1.2) | $ 32,862 | $ 32,949 | (0.3) | ||||||
| Used vehicle retail | $ 20,612 | $ 20,091 | 2.6 | $ 20,458 | $ 19,993 | 2.3 | ||||||
| GROSS PROFIT PER UNIT SOLD: | ||||||||||||
| New vehicle retail sales | $ 1,927 | $ 2,179 | (11.6) | $ 1,921 | $ 2,054 | (6.5) | ||||||
| Used vehicle retail sales | 1,682 | 1,708 | (1.5) | 1,733 | 1,812 | (4.4) | ||||||
| Used vehicle wholesale sales | (53) | (21) | 152.4 | 72 | 145 | (50.3) | ||||||
| Total used | 1,076 | 1,119 | (3.8) | 1,171 | 1,244 | (5.9) | ||||||
| Finance and insurance (per retail unit) | $ 1,220 | $ 1,156 | 5.5 | $ 1,197 | $ 1,118 | 7.1 | ||||||
| OTHER: (1) | ||||||||||||
| SG&A expenses | $ 216,082 | $ 188,185 | 14.8 | $ 627,942 | $ 547,120 | 14.8 | ||||||
| SG&A as % revenues | 10.9 | 12.0 | 11.3 | 12.3 | ||||||||
| SG&A as % gross profit | 74.2 | 75.7 | 75.0 | 76.5 | ||||||||
| Operating margin % | 3.4 | 3.4 | 3.4 | 3.3 | ||||||||
| Pretax margin % | 2.5 | 2.4 | 2.4 | 2.3 | ||||||||
| FLOORPLAN EXPENSE: | ||||||||||||
| Floorplan interest | $ (7,942) | $ (6,964) | 14.0 | $ (23,424) | $ (20,245) | 15.7 | ||||||
| Floorplan assistance | 9,204 | 6,740 | 36.6 | 25,276 | 18,836 | 34.2 | ||||||
| Net floorplan income (expense) | $ 1,262 | $ (224) | 663.4 | $ 1,852 | $ (1,409) | 231.4 | ||||||
| (1) | These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments. | |||||||||||
| Group 1 Automotive, Inc. | ||||||||||||
| Additional Information – Same Store(1) | ||||||||||||
| (Unaudited) | ||||||||||||
| (Dollars in thousands, except per unit amounts) | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2012 | 2011 | % Change | 2012 | 2011 | % Change | |||||||
| REVENUES: | ||||||||||||
| New vehicle retail sales | $ 1,036,633 | $ 862,661 | 20.2 | $ 2,856,681 | $ 2,452,455 | 16.5 | ||||||
| Used vehicle retail sales | 425,287 | 377,115 | 12.8 | 1,228,597 | 1,051,812 | 16.8 | ||||||
| Used vehicle wholesale sales | 68,160 | 69,051 | (1.3) | 192,587 | 191,528 | 0.6 | ||||||
| Total used | 493,447 | 446,166 | 10.6 | 1,421,184 | 1,243,340 | 14.3 | ||||||
| Parts and service | 210,839 | 210,066 | 0.4 | 615,547 | 607,733 | 1.3 | ||||||
| Finance and insurance | 64,996 | 51,508 | 26.2 | 178,771 | 141,994 | 25.9 | ||||||
| Total | $ 1,805,915 | $ 1,570,401 | 15.0 | $ 5,072,183 | $ 4,445,522 | 14.1 | ||||||
| GROSS MARGIN %: | ||||||||||||
| New vehicle retail sales | 5.7 | 6.5 | 5.8 | 6.2 | ||||||||
| Used vehicle retail sales | 8.3 | 8.5 | 8.5 | 9.1 | ||||||||
| Used vehicle wholesale sales | (0.7) | (0.3) | 1.3 | 2.1 | ||||||||
| Total used | 7.0 | 7.1 | 7.5 | 8.0 | ||||||||
| Parts and service | 52.3 | 52.0 | 52.5 | 52.5 | ||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | ||||||||
| Total | 14.9 | 15.8 | 15.3 | 16.0 | ||||||||
| GROSS PROFIT: | ||||||||||||
| New vehicle retail sales | $ 59,171 | $ 56,164 | 5.4 | $ 165,138 | $ 152,862 | 8.0 | ||||||
| Used vehicle retail sales | 35,141 | 32,066 | 9.6 | 104,090 | 95,246 | 9.3 | ||||||
| Used vehicle wholesale sales | (453) | (203) | 123.2 | 2,445 | 3,940 | (37.9) | ||||||
| Total used | 34,688 | 31,863 | 8.9 | 106,535 | 99,186 | 7.4 | ||||||
| Parts and service | 110,183 | 109,230 | 0.9 | 323,420 | 319,327 | 1.3 | ||||||
| Finance and insurance | 64,996 | 51,508 | 26.2 | 178,771 | 141,994 | 25.9 | ||||||
| Total | $ 269,038 | $ 248,765 | 8.1 | $ 773,864 | $ 713,369 | 8.5 | ||||||
| UNITS SOLD: | ||||||||||||
| Retail new vehicles sold | 31,463 | 25,777 | 22.1 | 87,154 | 74,414 | 17.1 | ||||||
| Retail used vehicles sold | 20,808 | 18,770 | 10.9 | 60,398 | 52,606 | 14.8 | ||||||
| Wholesale used vehicles sold | 10,763 | 9,697 | 11.0 | 29,925 | 27,232 | 9.9 | ||||||
| Total used | 31,571 | 28,467 | 10.9 | 90,323 | 79,838 | 13.1 | ||||||
| AVERAGE RETAIL SALES PRICE: | ||||||||||||
| New vehicle retail | $ 32,948 | $ 33,467 | (1.6) | $ 32,777 | $ 32,957 | (0.5) | ||||||
| Used vehicle retail | $ 20,439 | $ 20,092 | 1.7 | $ 20,342 | $ 19,994 | 1.7 | ||||||
| GROSS PROFIT PER UNIT SOLD: | ||||||||||||
| New vehicle retail sales | $ 1,881 | $ 2,179 | (13.7) | $ 1,895 | $ 2,054 | (7.7) | ||||||
| Used vehicle retail sales | 1,689 | 1,708 | (1.1) | 1,723 | 1,811 | (4.9) | ||||||
| Used vehicle wholesale sales | (42) | (21) | 100.0 | 82 | 145 | (43.4) | ||||||
| Total used | 1,099 | 1,119 | (1.8) | 1,179 | 1,242 | (5.1) | ||||||
| Finance and insurance (per retail unit) | $ 1,243 | $ 1,156 | 7.5 | $ 1,212 | $ 1,118 | 8.4 | ||||||
| OTHER: (2) | ||||||||||||
| SG&A expenses | $ 198,852 | $ 188,230 | 5.6 | $ 578,619 | $ 546,415 | 5.9 | ||||||
| SG&A as % revenues | 11.0 | 12.0 | 11.4 | 12.3 | ||||||||
| SG&A as % gross profit | 73.9 | 75.7 | 74.8 | 76.6 | ||||||||
| Operating margin % | 3.5 | 3.4 | 3.4 | 3.3 | ||||||||
| FLOORPLAN EXPENSE: | ||||||||||||
| Floorplan interest | $ (7,364) | $ (6,964) | 5.7 | $ (21,543) | $ (20,166) | 6.8 | ||||||
| Floorplan assistance | 8,544 | 6,740 | 26.8 | 23,017 | 18,806 | 22.4 | ||||||
| Net floorplan income (expense) | $ 1,180 | $ (224) | 626.8 | $ 1,474 | $ (1,360) | 208.4 | ||||||
| (1) | Same store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same store results also include the activities of our corporate office. | |||||||||||
| (2) | These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments. | |||||||||||
| Group 1 Automotive, Inc. | ||||||||||||||
| Reconciliation of Certain Non-GAAP Financial Measures | ||||||||||||||
| (Unaudited) | ||||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| NET INCOME RECONCILIATION: | 2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||
| As reported | $ 31,335 | $ 21,494 | 45.8 | $ 83,077 | $ 61,539 | 35.0 | ||||||||
| After-tax adjustments: | ||||||||||||||
| Non-cash asset impairment charges(2) | – | 2,309 | 115 | 2,534 | ||||||||||
| Net gain on real estate transactions(3) | – | – | (659) | – | ||||||||||
| Insurance deductibles for hail storm damage (4) | – | – | 1,658 | – | ||||||||||
| Adjusted net income (1) | $ 31,335 | $ 23,803 | 31.6 | $ 84,191 | $ 64,073 | 31.4 | ||||||||
| ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED COMMON SHARES |
||||||||||||||
| Adjusted net income | $ 31,335 | $ 23,803 | 31.6 | $ 84,191 | $ 64,073 | 31.4 | ||||||||
| Less: Adjusted earnings allocated to participating securities | 1,641 | 1,392 | 17.9 | 4,432 | 3,697 | 19.9 | ||||||||
| Adjusted net income available to diluted common shares | $ 29,694 | $ 22,411 | 32.5 | $ 79,759 | $ 60,376 | 32.1 | ||||||||
| DILUTED INCOME PER COMMON SHARE RECONCILIATION: | ||||||||||||||
| As reported | $ 1.32 | $ 0.91 | 45.1 | $ 3.50 | $ 2.57 | 36.2 | ||||||||
| After-tax adjustments: | ||||||||||||||
| Non-cash asset impairment charges | – | 0.10 | – | 0.11 | ||||||||||
| Net gain on real estate transactions | – | – | (0.03) | – | ||||||||||
| Insurance deductibles for hail storm damage | – | – | 0.07 | – | ||||||||||
| Adjusted diluted income per share (1) | $ 1.32 | $ 1.01 | 30.7 | $ 3.54 | $ 2.68 | 32.1 | ||||||||
| SG&A RECONCILIATION: | ||||||||||||||
| As reported | $ 216,082 | $ 188,185 | 14.8 | $ 629,521 | $ 547,120 | 15.1 | ||||||||
| Pre-tax adjustments: | ||||||||||||||
| Net gain on real estate transactions | – | – | 1,071 | – | ||||||||||
| Insurance deductibles for hail storm damage | – | – | (2,650) | – | ||||||||||
| Adjusted SG&A (1) | $ 216,082 | $ 188,185 | 14.8 | $ 627,942 | $ 547,120 | 14.8 | ||||||||
| SG&A AS % REVENUES: | ||||||||||||||
| Unadjusted | 10.9 | 12.0 | 11.4 | 12.3 | ||||||||||
| Adjusted (1) | 10.9 | 12.0 | 11.3 | 12.3 | ||||||||||
| SG&A AS % OF GROSS PROFIT: | ||||||||||||||
| Unadjusted | 74.2 | 75.7 | 75.2 | 76.5 | ||||||||||
| Adjusted (1) | 74.2 | 75.7 | 75.0 | 76.5 | ||||||||||
| OPERATING MARGIN %: | ||||||||||||||
| Unadjusted | 3.4 | 3.2 | 3.3 | 3.2 | ||||||||||
| Adjusted (1), (5) | 3.4 | 3.4 | 3.4 | 3.3 | ||||||||||
| PRETAX MARGIN %: | ||||||||||||||
| Unadjusted | 2.5 | 2.2 | 2.4 | 2.2 | ||||||||||
| Adjusted (1), (5) | 2.5 | 2.4 | 2.4 | 2.3 | ||||||||||
| SAME STORE SG&A RECONCILIATION: | ||||||||||||||
| As reported | ||||||||||||||
| Pre-tax adjustments: | $ 198,852 | $ 188,230 | 5.6 | $ 581,773 | $ 546,415 | 6.5 | ||||||||
| Loss on real estate transaction | – | – | (504) | – | ||||||||||
| Insurance deductibles for hail storm damage | – | – | (2,650) | – | ||||||||||
| Adjusted Same Store SG&A (1) | $ 198,852 | $ 188,230 | 5.6 | $ 578,619 | $ 546,415 | 5.9 | ||||||||
| SAME STORE SG&A AS % REVENUES: | ||||||||||||||
| Unadjusted | 11.0 | 12.0 | 11.5 | 12.3 | ||||||||||
| Adjusted (1) | 11.0 | 12.0 | 11.4 | 12.3 | ||||||||||
| SAME STORE SG&A AS % OF GROSS PROFIT: | ||||||||||||||
| Unadjusted | 73.9 | 75.7 | 75.2 | 76.6 | ||||||||||
| Adjusted (1) | 73.9 | 75.7 | 74.8 | 76.6 | ||||||||||
| SAME STORE OPERATING MARGIN %: | ||||||||||||||
| Unadjusted | 3.5 | 3.2 | 3.4 | 3.2 | ||||||||||
| Adjusted (1), (6) | 3.5 | 3.4 | 3.4 | 3.3 | ||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | 2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||
| RECONCILIATION: | ||||||||||||||
| Net cash provided by (used in) operating activities | $ 38,430 | $ 100,744 | (61.9) | $ (7,291) | $ 301,118 | (102.4) | ||||||||
| Change in floorplan notes
payable-credit facility, excluding floorplan offset account and net acquisition and disposition related activity |
24,214 | (83,371) | 175,795 | (156,657) | ||||||||||
| Change in floorplan notes
payable-manufacturer affiliates associated with net acquisition and disposition related activity |
– | – | – | (26,578) | ||||||||||
| Adjusted net cash provided by operating activities(1) | $ 62,644 | $ 17,373 | 260.6 | $ 168,504 | $ 117,883 | 42.9 | ||||||||
| (1) | We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items. These adjusted measures are not measures of financial performance under GAAP. As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures. We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. | |||||||||||||
| (2) | Adjustment is net of tax benefit of $72 for the nine months ended September 30, 2012, and $1,335 and $1,474 for the three and nine months ended September 30, 2011, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment. | |||||||||||||
| (3) | Adjustment is net of tax provision of $412 for the nine months ended September 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment. | |||||||||||||
| (4) | Adjustment is net of tax benefit of $992 for the nine months ended September 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment. | |||||||||||||
| (5) | Excludes the impact of non-cash asset impairment charges for all periods, as well as a net gain on real estate transactions and insurance deductibles for hail storm damage in 2012. | |||||||||||||
| (6) | Excludes the impact of Same Store non-cash asset impairment charges of $187 for the nine months ended September 30, 2012, and $3,644 and $3,964 for the three and nine months ended September 30, 2011, respectively. In addition, this excludes the impact of Same Store loss on real estate transaction of $504 and insurance deductibles of $2,650 for the nine months ended September 30, 2012. Adjusted Same Store operating income was $62,569, $53,689, $173,287, and $147,100 for the periods presented respectively. | |||||||||||||
SOURCE Group 1 Automotive, Inc.