BLOOMFIELD HILLS, Mich. —Penske Automotive Group, Inc. (NYSE:PAG), an international automotive retailer, announced today record third quarter adjusted income from continuing operations and related earnings per share. For the third quarter 2012, adjusted income from continuing operations attributable to common shareholders increased 19.1% to $54.3 million and related earnings per share increased 20.0% to $0.60 per share. This compares to adjusted income from continuing operations attributable to common shareholders of $45.6 million, or $0.50 per share in the same period last year.
| Third Quarter 2012 | Nine Months 2012 | ||
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Adjusted income from continuing operations attributable to common shareholders for the third quarter and nine months ended September 30, 2012, excludes after-tax costs of $13.0 million, or $0.14 per share, of debt redemption costs associated with the redemption of the Company’s $375 million of 7.75% senior subordinated notes due 2016. Adjusted income from continuing operations attributable to common shareholders for the third quarter and nine months ended September 30, 2011 excludes $11.0 million, or $0.12 per share, of net income tax benefits reflecting a positive adjustment from the resolution of certain tax items in the U.K. of $17.0 million, or $0.19 per share, partially offset by a reduction in deferred tax assets of $6.0 million, or $0.07 per share. Actual third quarter 2012 income from continuing operations was $41.3 million, or $0.46 per share, compared to income from continuing operations of $56.6 million, or $0.62 per share in the same period last year.
Total revenue increased 17.4% to $3.4 billion, including a same-store retail revenue increase of 11.7% in the third quarter. The revenue increase was driven by a 23.6% increase in total retail unit sales, including 16.6% on a same-store basis. Gross profit improved 10.9% to $511.0 million while operating income increased 11.4% to $87.5 million.
Highlights of the Third Quarter
- Total Retail Unit Sales increased 23.6% to 88,151
- +21.1% in the United States; +29.1% Internationally
- New unit retail sales +26.3%
- Used unit retail sales +20.4%
- Same-store Retail Revenue increased 11.7%
- New +15.9%; Used +8.4%; Finance & Insurance +13.0%; Service and Parts +1.9%
- +16.6% in the United States; +3.6% Internationally
- Average Transaction Price Per Unit
- New $36,497; -3.8%
- Used $24,982; -4.8%
- Average Gross Profit Per Unit
- New $2,821; Gross Margin 7.7%; down 80 bps
- Used $1,824; Gross Margin 7.3%; down 20 bps
- Finance & Insurance $969; down $57/unit
Chairman Roger Penske said, “The Company’s third quarter results continue to demonstrate the strength of the auto retail sales environment in both the U.S. and our international markets. We experienced strong new unit sales throughout the quarter, particularly through our volume foreign brands which increased 33.9%, including 30.7% on a same-store basis. Additionally, our retail used vehicle unit sales continue to be very strong, increasing 20.4%, including 13.3% on a same-store basis. I was particularly pleased to see service and parts gross margin improve by 80 basis points to 57.8% and a 1.9% improvement in same-store service and parts revenue.”
Penske continued, “While new and used unit sales were strong, we experienced pricing pressure in our markets, especially when compared to the third quarter last year, when a lack of inventory at our Toyota, Honda and Nissan dealerships drove higher gross profits per unit.”
For the nine months ended September 30, 2012, total revenue increased 18.2% to $10.0 billion. Adjusted income from continuing operations attributable to common shareholders increased 27.1% to $153.8 million and adjusted earnings per share attributable to common shareholders increased 29.8% to $1.70 per share. This compares to adjusted income from continuing operations attributable to common shareholders of $121.0 million, and related earnings per share of $1.31 per share in the same period last year. Actual income from continuing operations for the nine months ended September 30, 2012, was $140.8 million, or $1.56 per share, compared to income from continuing operations of $132.0 million, or $1.43 in the same period last year.
Securities Repurchase Activity
During the third quarter ended September 30, 2012, the Company completed the redemption of the remaining $25.5 million in outstanding 3.5% senior subordinated convertible notes. No shares of common stock were issued in the redemption. Additionally, the Company redeemed $375 million of 7.75% senior subordinated notes in connection with the issuance of $550 million of 5.75% senior subordinated notes.
The Company currently has remaining authorization from its Board of Directors to repurchase up to $98.3 million of its outstanding common stock or debt. Securities may be acquired from time to time either through open market purchases, negotiated transactions or other means.
Conference Call
Penske Automotive will host a conference call discussing financial results relating to the third quarter of 2012 on November 2, 2012, at 11:00 a.m. Eastern Daylight Time. To listen to the conference call, participants must dial (800) 230-1096 [International, please dial (612) 288-0337]. The call will also be simultaneously broadcast over the Internet through the Investors Relations section of the Penske Automotive Group website at www.penskeautomotive.com.
About Penske Automotive
Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 341 retail automotive franchises, representing 40 different brands and 30 collision repair centers. Penske Automotive, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 171 franchises in 17 states and Puerto Rico and 170 franchises located outside the United States, primarily in the United Kingdom. Penske Automotive is a member of the Fortune 500 and Russell 2000 and has approximately 16,000 employees.
Non-GAAP Financial Measures
This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations, adjusted earnings per share from continuing operations, and adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”). The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these widely accepted measures of operating profitability improve the transparency of the Company’s disclosures and provide a meaningful presentation of the Company’s results from its core business operations excluding the impact of items not related to the Company’s ongoing core business operations, and improve the period-to-period comparability of the Company’s results from its core business operations. These non-GAAP financial measures are not substitutes for GAAP financial results, and should only be considered in conjunction with the Company’s financial information that is presented in accordance with GAAP.
Caution Concerning Forward Looking Statements
Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.’s future sales potential and outlook. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others: economic conditions generally, conditions in the credit markets and changes in interest rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters or other disruptions that interrupt the supply of vehicles or parts to us; changes in consumer credit availability, the outcome of legal and administrative matters, and other factors over which management has limited control. These forward-looking statements should be evaluated together with additional information about Penske Automotive’s business, markets, conditions and other uncertainties, which could affect Penske Automotive’s future performance. These risks and uncertainties are addressed in Penske Automotive’s Form 10-K for the year ended December 31, 2011, and its other filings with the Securities and Exchange Commission (“SEC”). This press release speaks only as of its date, and Penske Automotive disclaims any duty to update the information herein.
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| PENSKE AUTOMOTIVE GROUP, INC.Consolidated Condensed Statements of Income
(Amounts In Thousands, Except Per Share Data) (Unaudited) |
||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues: | ||||||||||||||||
| New Vehicle | $ | 1,763,050 | $ | 1,451,177 | $ | 5,066,417 | $ | 4,229,192 | ||||||||
| Used Vehicle | 995,376 | 867,969 | 2,926,523 | 2,511,573 | ||||||||||||
| Finance and Insurance, Net | 85,420 | 73,191 | 247,906 | 208,540 | ||||||||||||
| Service and Parts | 372,032 | 347,432 | 1,109,122 | 1,027,120 | ||||||||||||
| Fleet and Wholesale | 185,531 | 158,672 | 656,663 | 490,135 | ||||||||||||
| Total Revenues | 3,401,409 | 2,898,441 | 10,006,631 | 8,466,560 | ||||||||||||
| Cost of Sales: | ||||||||||||||||
| New Vehicle | 1,626,759 | 1,327,968 | 4,659,490 | 3,877,615 | ||||||||||||
| Used Vehicle | 922,703 | 802,542 | 2,701,645 | 2,310,147 | ||||||||||||
| Service and Parts | 156,942 | 149,429 | 465,620 | 440,392 | ||||||||||||
| Fleet and Wholesale | 184,009 | 157,739 | 650,302 | 484,222 | ||||||||||||
| Total Cost of Sales | 2,890,413 | 2,437,678 | 8,477,057 | 7,112,376 | ||||||||||||
| Gross Profit | 510,996 | 460,763 | 1,529,574 | 1,354,184 | ||||||||||||
| SG&A Expenses | 409,432 | 369,783 | 1,216,231 | 1,098,132 | ||||||||||||
| Depreciation | 14,037 | 12,427 | 41,013 | 36,132 | ||||||||||||
| Operating Income | 87,527 | 78,553 | 272,330 | 219,920 | ||||||||||||
| Floor Plan Interest Expense | (10,055 | ) | (6,837 | ) | (29,675 | ) | (20,617 | ) | ||||||||
| Other Interest Expense | (11,689 | ) | (11,153 | ) | (35,474 | ) | (32,889 | ) | ||||||||
| Debt Discount Amortization | — | — | — | (1,718 | ) | |||||||||||
| Equity in Earnings of Affiliates | 8,814 | 9,623 | 21,392 | 17,527 | ||||||||||||
| Debt Redemption Costs | (17,753 | ) | — | (17,753 | ) | — | ||||||||||
| Income from Continuing Operations Before Income Taxes | 56,844 | 70,186 | 210,820 | 182,223 | ||||||||||||
| Income Taxes | (15,308 | ) | (13,246 | ) | (69,052 | ) | (49,289 | ) | ||||||||
| Income from Continuing Operations | 41,536 | 56,940 | 141,768 | 132,934 | ||||||||||||
| Loss from Discontinued Operations, Net of Tax | (223 | ) | (895 | ) | (3,837 | ) | (2,833 | ) | ||||||||
| Net Income | 41,313 | 56,045 | 137,931 | 130,101 | ||||||||||||
| Less: Income Attributable to Non-Controlling Interests | 282 | 338 | 990 | 907 | ||||||||||||
| Net Income Attributable to Common Shareholders | $ | 41,031 | $ | 55,707 | $ | 136,941 | $ | 129,194 | ||||||||
| Income from Continuing Operations Per Share | $ | 0.46 | $ | 0.62 | $ | 1.56 | $ | 1.43 | ||||||||
| Income Per Share | $ | 0.45 | $ | 0.61 | $ | 1.52 | $ | 1.40 | ||||||||
| Weighted Average Shares Outstanding | 90,296 | 91,431 | 90,362 | 92,169 | ||||||||||||
| Amounts Attributable to Common Shareholders: | ||||||||||||||||
| Reported Income from Continuing Operations | $ | 41,536 | $ | 56,940 | $ | $ | 141,768 | $ | 132,934 | |||||||
| Less: Income Attributable to Non-Controlling Interests | 282 | 338 | 990 | 907 | ||||||||||||
| Income from Continuing Operations, net of tax | $ | 41,254 | $ | 56,602 | $ | 140,778 | $ | 132,027 | ||||||||
| Loss from Discontinued Operations, net of tax | (223 | ) | (895 | ) | (3,837 | ) | (2,833 | ) | ||||||||
| Net Income | $ | 41,031 | $ | 55,707 | $ | 136,941 | $ | 129,194 | ||||||||
| PENSKE AUTOMOTIVE GROUP, INC.Consolidated Condensed Balance Sheets
(Amounts In Thousands) (Unaudited) |
||||||
| September 30, | December 31, | |||||
| 2012 | 2011 | |||||
| Assets | ||||||
| Cash and Cash Equivalents | $ | 25,935 | $ | 28,676 | ||
| Accounts Receivable, Net | 505,770 | 438,769 | ||||
| Inventories | 1,864,773 | 1,572,568 | ||||
| Other Current Assets | 91,204 | 80,179 | ||||
| Assets Held for Sale | 38,005 | 81,122 | ||||
| Total Current Assets | 2,525,687 | 2,201,314 | ||||
| Property and Equipment, Net | 961,488 | 856,674 | ||||
| Intangibles | 1,210,959 | 1,132,181 | ||||
| Other Long-Term Assets | 326,046 | 312,130 | ||||
| Total Assets | $ | 5,024,180 | $ | 4,502,299 | ||
| Liabilities and Equity | ||||||
| Floor Plan Notes Payable | $ | 1,254,895 | $ | 977,548 | ||
| Floor Plan Notes Payable – Non-Trade | 704,280 | 691,888 | ||||
| Accounts Payable | 275,032 | 220,538 | ||||
| Accrued Expenses | 259,146 | 201,179 | ||||
| Current Portion Long-Term Debt | 14,929 | 3,414 | ||||
| Liabilities Held for Sale | 34,124 | 55,820 | ||||
| Total Current Liabilities | 2,542,406 | 2,150,387 | ||||
| Long-Term Debt | 815,918 | 846,777 | ||||
| Other Long-Term Liabilities | 397,465 | 364,722 | ||||
| Total Liabilities | 3,755,789 | 3,361,886 | ||||
| Equity | 1,268,391 | 1,140,413 | ||||
| Total Liabilities and Equity | $ | 5,024,180 | $ | 4,502,299 | ||
| PENSKE AUTOMOTIVE GROUP, INC.Consolidated Condensed Statements of Income
(Amounts In Thousands, Except Per Share Data) (Unaudited) |
|||||||||||
| Three Months Ended | |||||||||||
| September 30, | |||||||||||
| 2012 | 2011 | % Increase/(Decrease) | |||||||||
| Revenues: | |||||||||||
| New Vehicle | $ | 1,763,050 | $ | 1,451,177 | 21.5 | % | |||||
| Used Vehicle | 995,376 | 867,969 | 14.7 | % | |||||||
| Finance and Insurance, Net | 85,420 | 73,191 | 16.7 | % | |||||||
| Service and Parts | 372,032 | 347,432 | 7.1 | % | |||||||
| Fleet and Wholesale | 185,531 | 158,672 | 16.9 | % | |||||||
| Total Revenues | 3,401,409 | 2,898,441 | 17.4 | % | |||||||
| Cost of Sales: | |||||||||||
| New Vehicle | 1,626,759 | 1,327,968 | 22.5 | % | |||||||
| Used Vehicle | 922,703 | 802,542 | 15.0 | % | |||||||
| Service and Parts | 156,942 | 149,429 | 5.0 | % | |||||||
| Fleet and Wholesale | 184,009 | 157,739 | 16.7 | % | |||||||
| Total Cost of Sales | 2,890,413 | 2,437,678 | 18.6 | % | |||||||
| Gross Profit | 510,996 | 460,763 | 10.9 | % | |||||||
| SG&A Expenses | 409,432 | 369,783 | 10.7 | % | |||||||
| Depreciation | 14,037 | 12,427 | 13.0 | % | |||||||
| Operating Income | 87,527 | 78,553 | 11.4 | % | |||||||
| Floor Plan Interest Expense | (10,055 | ) | (6,837 | ) | 47.1 | % | |||||
| Other Interest Expense | (11,689 | ) | (11,153 | ) | 4.8 | % | |||||
| Equity in Earnings of Affiliates | 8,814 | 9,623 | (8.4 | %) | |||||||
| Debt Redemption Costs | (17,753 | ) | — | — | |||||||
| Income from Continuing Operations Before Income Taxes | 56,844 | 70,186 | (19.0 | %) | |||||||
| Income Taxes | (15,308 | ) | (13,246 | ) | ( | 15.6 | % | ||||
| Income from Continuing Operations | 41,536 | 56,940 | (27.1 | %) | |||||||
| Loss from Discontinued Operations, Net of Tax | (223 | ) | (895 | ) | (75.1 | %) | |||||
| Net Income | 41,313 | 56,045 | (26.3 | %) | |||||||
| Less: Income Attributable to Non-Controlling Interests | 282 | 338 | (16.6 | %) | |||||||
| Net Income Attributable to Common Shareholders | $ | 41,031 | $ | 55,707 | (26.3 | %) | |||||
| Income from Continuing Operations Per Share | $ | 0.46 | $ | 0.62 | (25.8 | %) | |||||
| Income Per Share | $ | 0.45 | $ | 0.61 | (26.2 | %) | |||||
| Weighted Average Shares Outstanding | 90,296 | 91,431 | (1.2 | %) | |||||||
| Amounts Attributable to Common Shareholders: | |||||||||||
| Reported Income from Continuing Operations | $ | 41,536 | $ | 56,940 | (27.1 | %) | |||||
| Less: Income Attributable to Non-Controlling Interests | 282 | 338 | (16.6 | %) | |||||||
| Income from Continuing Operations, net of tax | $ | 41,254 | $ | 56,602 | (27.1 | %) | |||||
| Loss from Discontinued Operations, net of tax | (223 | ) | (895 | ) | (75.1 | %) | |||||
| Net Income | $ | 41,031 | $ | 55,707 | (26.3 | %) | |||||
| PENSKE AUTOMOTIVE GROUP, INC.Selected Data
(Unaudited) |
|||||||||||
| Three Months Ended | |||||||||||
| September 30, | |||||||||||
| 2012 | 2011 | % Increase/ (Decrease) |
|||||||||
| Total Retail Units: | |||||||||||
| New Retail | 48,307 | 38,248 | 26.3 | % | |||||||
| Used Retail | 39,844 | 33,084 | 20.4 | % | |||||||
| Total Retail | 88,151 | 71,332 | 23.6 | % | |||||||
| Same-Store Retail Units: | |||||||||||
| New Same-Store Retail | 44,254 | 37,057 | 19.4 | % | |||||||
| Used Same-Store Retail | 36,855 | 32,531 | 13.3 | % | |||||||
| Total Same-Store Retail | 81,109 | 69,588 | 16.6 | % | |||||||
| Same-Store Retail Revenue: (Amounts in thousands) | |||||||||||
| New Vehicles | $ | 1,615,941 | $ | 1,393,797 | 15.9 | % | |||||
| Used Vehicles | 924,835 | 853,002 | 8.4 | % | |||||||
| Finance and Insurance, Net | 80,911 | 71,584 | 13.0 | % | |||||||
| Service and Parts | 342,069 | 335,846 | 1.9 | % | |||||||
| Total Same-Store Retail | $ | 2,963,756 | $ | 2,654,229 | 11.7 | % | |||||
| Revenue Mix: | |||||||||||
| New Vehicles | 51.8 | % | 50.1 | % | 170 bps | ||||||
| Used Vehicles | 29.3 | % | 29.9 | % | (60 bps) | ||||||
| Finance and Insurance, Net | 2.5 | % | 2.5 | % | — | ||||||
| Service and Parts | 10.9 | % | 12.0 | % | (110 bps) | ||||||
| Fleet and Wholesale | 5.5 | % | 5.5 | % | — | ||||||
| Average Revenue per Vehicle Retailed: | |||||||||||
| New Vehicles | $ | 36,497 | $ | 37,941 | (3.8 | %) | |||||
| Used Vehicles | 24,982 | 26,235 | (4.8 | %) | |||||||
| Gross Profit per Vehicle Retailed: | |||||||||||
| New Vehicles | $ | 2,821 | $ | 3,221 | (12.4 | %) | |||||
| Used Vehicles | 1,824 | 1,978 | (7.8 | %) | |||||||
| Finance and Insurance | 969 | 1,026 | (5.6 | %) | |||||||
| Operating items as a percentage of revenue: | |||||||||||
| New Vehicle Gross Profit | 7.7 | % | 8.5 | % | (80 bps) | ||||||
| Used Vehicle Gross Profit | 7.3 | % | 7.5 | % | (20 bps) | ||||||
| Service and Parts Gross Profit | 57.8 | % | 57.0 | % | 80 bps | ||||||
| Total Gross Profit | 15.0 | % | 15.9 | % | (90 bps) | ||||||
| Selling, General and Admin. Expenses | 12.0 | % | 12.8 | % | (80 bps) | ||||||
| Operating Income | 2.6 | % | 2.7 | % | (10 bps) | ||||||
| Inc. From Cont. Ops. Before Inc. Taxes | 1.7 | % | 2.4 | % | (70 bps) | ||||||
| Operating items as a percentage of total gross profit: | |||||||||||
| Selling, General and Administrative Expenses | 80.1 | % | 80.3 | % | (20 bps) | ||||||
| Operating Income | 17.1 | % | 17.0 | % | 10 bps | ||||||
| PENSKE AUTOMOTIVE GROUP, INC.Selected Data (Continued)
(Unaudited) |
|||||||||
| Three Months Ended | |||||||||
| September 30, | |||||||||
| 2012 | 2011 | % Increase/ (Decrease) | |||||||
| Other (Amounts in Thousands): | |||||||||
| EBITDA * | $ | 82,570 | $ | 93,766 | (11.9 | %) | |||
| Adjusted EBITDA * | 100,323 | 93,766 | 7.0 | % | |||||
| Rent Expense | 44,394 | 42,520 | 4.4 | % | |||||
| Floorplan Credits | 5,864 | 4,865 | 20.5 | % | |||||
| * See the following Non-GAAP reconciliation tables | |||||||||
| PENSKE AUTOMOTIVE GROUP, INC.Consolidated Condensed Statements of Income
(Amounts In Thousands, Except Per Share Data) (Unaudited) |
|||||||||||
| Nine Months Ended | |||||||||||
| September 30, | |||||||||||
| 2012 | 2011 | % Increase/ (Decrease) | |||||||||
| Revenues: | |||||||||||
| New Vehicle | $ | 5,066,417 | $ | 4,229,192 | 19.8 | % | |||||
| Used Vehicle | 2,926,523 | 2,511,573 | 16.5 | % | |||||||
| Finance and Insurance, Net | 247,906 | 208,540 | 18.9 | % | |||||||
| Service and Parts | 1,109,122 | 1,027,120 | 8.0 | % | |||||||
| Fleet and Wholesale | 656,663 | 490,135 | 34.0 | % | |||||||
| Total Revenues | 10,006,631 | 8,466,560 | 18.2 | % | |||||||
| Cost of Sales: | |||||||||||
| New Vehicle | 4,659,490 | 3,877,615 | 20.2 | % | |||||||
| Used Vehicle | 2,701,645 | 2,310,147 | 16.9 | % | |||||||
| Service and Parts | 465,620 | 440,392 | 5.7 | % | |||||||
| Fleet and Wholesale | 650,302 | 484,222 | 34.3 | % | |||||||
| Total Cost of Sales | 8,477,057 | 7,112,376 | 19.2 | % | |||||||
| Gross Profit | 1,529,574 | 1,354,184 | 13.0 | % | |||||||
| SG&A Expenses | 1,216,231 | 1,098,132 | 10.8 | % | |||||||
| Depreciation | 41,013 | 36,132 | 13.5 | % | |||||||
| Operating Income | 272,330 | 219,920 | 23.8 | % | |||||||
| Floor Plan Interest Expense | (29,675 | ) | (20,617 | ) | 43.9 | % | |||||
| Other Interest Expense | (35,474 | ) | (32,889 | ) | 7.9 | % | |||||
| Debt Discount Amortization | — | (1,718 | ) | — | |||||||
| Equity in Earnings of Affiliates | 21,392 | 17,527 | 22.1 | % | |||||||
| Debt Redemption Costs | (17,753 | ) | — | — | |||||||
| Income from Continuing Operations Before Income Taxes | 210,820 | 182,223 | 15.7 | % | |||||||
| Income Taxes | (69,052 | ) | (49,289 | ) | 40.1 | % | |||||
| Income from Continuing Operations | 141,768 | 132,934 | 6.6 | % | |||||||
| Loss from Discontinued Operations, Net of Tax | (3,837 | ) | (2,833 | ) | 35.4 | % | |||||
| Net Income | 137,931 | 130,101 | 6.0 | % | |||||||
| Less: Income Attributable to Non-Controlling Interests | 990 | 907 | 9.2 | % | |||||||
| Net Income Attributable to Common Shareholders | $ | 136,941 | $ | 129,194 | 6.0 | % | |||||
| Income from Continuing Operations Per Share | $ | 1.56 | $ | 1.43 | 9.1 | % | |||||
| Income Per Share | $ | 1.52 | $ | 1.40 | 8.6 | % | |||||
| Weighted Average Shares Outstanding | 90,362 | 92,169 | (2.0 | %) | |||||||
| Amounts Attributable to Common Shareholders: | |||||||||||
| Reported Income from Continuing Operations | $ | 141,768 | $ | 132,934 | 6.6 | % | |||||
| Less: Income Attributable to Non-Controlling Interests | 990 | 907 | 9.2 | % | |||||||
| Income from Continuing Operations, net of tax | $ | 140,778 | $ | 132,027 | 6.6 | % | |||||
| Loss from Discontinued Operations, net of tax | (3,837 | ) | (2,833 | ) | 35.4 | % | |||||
| Net Income | $ | 136,941 | $ | 129,194 | 6.0 | % | |||||
| PENSKE AUTOMOTIVE GROUP, INC.Selected Data
(Unaudited) |
|||||||||||
| Nine Months Ended | |||||||||||
| September 30, | |||||||||||
| 2012 | 2011 | % Increase/ (Decrease) |
|||||||||
| Total Retail Units: | |||||||||||
| New Retail | 138,080 | 114,242 | 20.9 | % | |||||||
| Used Retail | 115,692 | 95,525 | 21.1 | % | |||||||
| Total Retail | 253,772 | 209,767 | 21.0 | % | |||||||
| Same-Store Retail Units: | |||||||||||
| New Same-Store Retail | 125,685 | 111,770 | 12.4 | % | |||||||
| Used Same-Store Retail | 106,364 | 93,808 | 13.4 | % | |||||||
| Total Same-Store Retail | 232,049 | 205,578 | 12.9 | % | |||||||
| Same-Store Retail Revenue: (Amounts in thousands) | |||||||||||
| New Vehicles | $ | 4,617,494 | $ | 4,131,472 | 11.8 | % | |||||
| Used Vehicles | 2,697,265 | 2,470,351 | 9.2 | % | |||||||
| Finance and Insurance, Net | 232,364 | 204,533 | 13.6 | % | |||||||
| Service and Parts | 1,018,149 | 1,007,039 | 1.1 | % | |||||||
| Total Same-Store Retail | $ | 8,565,272 | $ | 7,813,395 | 9.6 | % | |||||
| Revenue Mix: | |||||||||||
| New Vehicles | 50.6 | % | 50.0 | % | 60 bps | ||||||
| Used Vehicles | 29.2 | % | 29.7 | % | (50 bps) | ||||||
| Finance and Insurance, Net | 2.5 | % | 2.5 | % | — | ||||||
| Service and Parts | 11.1 | % | 12.1 | % | (100 bps) | ||||||
| Fleet and Wholesale | 6.6 | % | 5.7 | % | 90 bps | ||||||
| Average Revenue per Vehicle Retailed: | |||||||||||
| New Vehicles | $ | 36,692 | $ | 37,020 | (0.9 | %) | |||||
| Used Vehicles | 25,296 | 26,292 | (3.8 | %) | |||||||
| Gross Profit per Vehicle Retailed: | |||||||||||
| New Vehicles | $ | 2,947 | $ | 3,077 | (4.2 | %) | |||||
| Used Vehicles | 1,944 | 2,109 | (7.8 | %) | |||||||
| Finance and Insurance | 977 | 994 | (1.7 | %) | |||||||
| Operating items as a percentage of revenue: | |||||||||||
| New Vehicle Gross Profit | 8.0 | % | 8.3 | % | (30 bps) | ||||||
| Used Vehicle Gross Profit | 7.7 | % | 8.0 | % | (30 bps) | ||||||
| Service and Parts Gross Profit | 58.0 | % | 57.1 | % | 90 bps | ||||||
| Total Gross Profit | 15.3 | % | 16.0 | % | (70 bps) | ||||||
| Selling, General and Admin. Expenses | 12.2 | % | 13.0 | % | (80 bps) | ||||||
| Operating Income | 2.7 | % | 2.6 | % | 10 bps | ||||||
| Inc. From Cont. Ops. Before Inc. Taxes | 2.1 | % | 2.2 | % | (10 bps) | ||||||
| Operating items as a percentage of total gross profit: | |||||||||||
| Selling, General and Administrative Expenses | 79.5 | % | 81.1 | % | (160 bps) | ||||||
| Operating Income | 17.8 | % | 16.2 | % | 160 bps | ||||||
| PENSKE AUTOMOTIVE GROUP, INC.Selected Data (Continued)
(Unaudited) |
|||||||||
| Nine Months Ended | |||||||||
| September 30, | |||||||||
| 2012 | 2011 | % Increase/(Decrease) | |||||||
| Other (Amounts in Thousands): | |||||||||
| EBITDA * | $ | 287,307 | $ | 252,962 | 13.6 | % | |||
| Adjusted EBITDA * | 305,060 | 252,962 | 20.6 | % | |||||
| Rent Expense | 132,614 | 126,774 | 4.6 | % | |||||
| Floorplan Credits | 17,146 | 15,229 | 12.6 | % | |||||
| * See the following Non-GAAP reconciliation tables | |||||||||
| PENSKE AUTOMOTIVE GROUP, INC.Selected Data
Brand Revenue Mix (Unaudited) |
||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||
| Brand Revenue Mix: | ||||||||||||
| Premium: | ||||||||||||
| BMW | 25 | % | 24 | % | 24 | % | 24 | % | ||||
| Audi | 12 | % | 13 | % | 12 | % | 12 | % | ||||
| Mercedes-Benz | 11 | % | 11 | % | 11 | % | 10 | % | ||||
| Lexus | 4 | % | 4 | % | 4 | % | 4 | % | ||||
| Land Rover | 4 | % | 4 | % | 4 | % | 4 | % | ||||
| Porsche | 4 | % | 4 | % | 4 | % | 5 | % | ||||
| Ferrari / Maserati | 2 | % | 3 | % | 3 | % | 3 | % | ||||
| Acura | 2 | % | 2 | % | 2 | % | 2 | % | ||||
| Other | 4 | % | 4 | % | 4 | % | 4 | % | ||||
| Total Premium | 68 | % | 69 | % | 68 | % | 68 | % | ||||
| Foreign: | ||||||||||||
| Toyota | 11 | % | 10 | % | 11 | % | 11 | % | ||||
| Honda | 11 | % | 11 | % | 11 | % | 11 | % | ||||
| Nissan | 2 | % | 2 | % | 2 | % | 2 | % | ||||
| Volkswagen | 2 | % | 2 | % | 2 | % | 2 | % | ||||
| Other | 2 | % | 2 | % | 2 | % | 2 | % | ||||
| Total Foreign | 28 | % | 27 | % | 28 | % | 28 | % | ||||
| Domestic Big 3 | ||||||||||||
| General Motors / Chrysler / Ford | 4 | % | 4 | % | 4 | % | 4 | % | ||||
| Revenue Mix: | ||||||||||||
| U.S. | 63 | % | 63 | % | 62 | % | 62 | % | ||||
| International | 37 | % | 37 | % | 38 | % | 38 | % | ||||
| PENSKE AUTOMOTIVE GROUP, INC.Non-GAAP Reconciliation
(Unaudited) |
||||||||||||||||||||
| Income | Earnings Per Share | |||||||||||||||||||
| Three Months Ended | Three Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| Income from Continuing Operations net of tax and Earnings per Share | $ | 41.3 | $ | 56.6 | $ | 0.46 | $ | 0.62 | ||||||||||||
| Debt Redemption Costs (1) | 13.0 | — | 0.14 | — | ||||||||||||||||
| Net Tax Benefits (2) | — | (11.0 | ) | — | (0.12 | ) | ||||||||||||||
| Adjusted Income from Continuing operations and Adjusted Earnings per Share | $ | 54.3 | $ | 45.6 | 19.1 | % | $ | 0.60 | $ | 0.50 | 20.0 | % | ||||||||
| Income | Earnings Per Share | |||||||||||||||||||
| Nine Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| Income from Continuing Operations net of tax and Earnings per Share | $ | 140.8 | $ | 132.0 | $ | 1.56 | $ | 1.43 | ||||||||||||
| Debt Redemption Costs (1) | 13.0 | — | 0.14 | — | ||||||||||||||||
| Net Tax Benefits (2) | — | (11.0 | ) | — | (0.12 | ) | ||||||||||||||
| Adjusted Income from Continuing Operations and Adjusted Earnings per Share | $ | 153.8 | $ | 121.0 | 27.1 | % | $ | 1.70 | $ | 1.31 | 29.8 | % | ||||||||
| (1) | Costs associated with the redemption of the Company’s $375 million of 7.75% senior subordinated notes due 2016 of $17.8 million ($13.0 million net of taxes), or $0.14 per share. | |
| (2) | Net income tax benefit reflecting a positive adjustment from the resolution of certain tax items in the U.K. of $17.0 million, or $0.19 per share, partially offset by a reduction in deferred tax assets of $6.0 million, or $0.07 per share. | |
| PENSKE AUTOMOTIVE GROUP, INC.Non-GAAP Reconciliation
(Unaudited) |
|||||||||
| Reconciliation of 2012 and 2011 net income to EBITDA and Adjusted EBITDA: | |||||||||
| Three Months Ended | |||||||||
| September 30, | |||||||||
| (Amounts in Thousands) | 2012 | 2011 | % Increase/(Decrease) | ||||||
| Net Income | $ | $41,313 | $ | 56,045 | (26.3 | %) | |||
| Depreciation | 14,037 | 12,427 | 13.0 | % | |||||
| Other Interest Expense | 11,689 | 11,153 | 4.8 | % | |||||
| Income Taxes | 15,308 | 13,246 | 15.6 | % | |||||
| Loss from Discontinued Operations, net | 223 | 895 | (75.1 | %) | |||||
| EBITDA | $ | 82,570 | $ | 93,766 | (11.9 | %) | |||
| Add back: Debt Redemption Costs | 17,753 | — | n/a | ||||||
| Adjusted EBITDA | $ | 100,323 | $ | 93,766 | 7.0 | % | |||
| Nine Months Ended | |||||||||
| September 30, | |||||||||
| (Amounts in Thousands) | 2012 | 2011 | % Increase/(Decrease) | ||||||
| Net Income | $ | 137,931 | $ | 130,101 | 6.0 | % | |||
| Depreciation | 41,013 | 36,132 | 13.5 | % | |||||
| Other Interest Expense | 35,474 | 32,889 | 7.9 | % | |||||
| Debt Discount Amortization | — | 1,718 | n/a | ||||||
| Income Taxes | 69,052 | 49,289 | 40.1 | % | |||||
| Loss from Discontinued Operations, net | 3,837 | 2,833 | 35.4 | % | |||||
| EBITDA | $ | 287,307 | $ | 252,962 | 13.6 | % | |||
| Add back: Debt Redemption Costs | 17,753 | — | n/a | ||||||
| Adjusted EBITDA | $ | 305,060 | $ | 252,962 | 20.6 | % | |||