Bob O’Shaughnessy Chief Financial Officer 248-648-2800 boshaughnessy@penskeautomotive.com
Tony Pordon Senior Vice President 248-648-2540 tpordon@penskeautomotive.com
PENSKE AUTOMOTIVE REPORTS FIRST QUARTER RESULTS ____________________________________________________________
Revenues Rise 4% to $3.2 Billion
Income from Continuing Operations of $33.8 Million; 17% Increase Versus Adjusted Q1 ’07
Earnings Per Share from Continuing Operations of $0.36; 16% Increase Versus Adjusted Q1 ’07 ____________________________________________________
BLOOMFIELD HILLS, MI, April 29, 2008 – Penske Automotive Group, Inc. (NYSE: PAG), an international automotive retailer, today reported that first quarter income from continuing operations was $33.8 million, which represents a 17.4% increase over adjusted income from continuing operations of $28.8 million in the prior year. Related earnings per share were $0.36 in the first quarter, which compares to $0.31 per share in the prior year. Net income in the first quarter was $33.9 million, or $0.36 per share, compared with adjusted net income of $26.9 million, or $0.28 per share, in the prior year. Adjusted 2007 earnings exclude $12.3 million ($0.13 per share) of after-tax costs relating to the redemption of the Company’s 9.625% Senior Subordinated Notes in March of 2007. In the first quarter of 2007, reported income from continuing operations and reported net income were $16.5 million, or $0.18 per share, and $14.6 million, or $0.15 per share, respectively.
Revenues in the first quarter increased 4.0% to $3.2 billion. On a same-store basis, retail revenues declined 2.3%, due primarily to a decline in new vehicle unit sales at the Company’s U.S. dealerships. “I’m pleased with the performance of our business in the first quarter,” said
Penske Automotive Group Chairman Roger Penske. “While the new vehicle sales environment was difficult, particularly in the U.S., our business continued to perform well. In particular, I am pleased that we were able to generate same-store retail revenue increases in our used vehicle, finance & insurance, and service and parts operations. Further, our overall gross margin increased to 15.4%, due primarily to the strength of our used vehicle and service and parts performance.” Penske continued, “I also remain excited about our distribution of the smart fortwo in the U.S., and am optimistic about its prospects and its potential to further diversify the Company’s overall business model.”
During the first quarter, the Company did not effect any repurchases under its previously announced share buyback authority. The Company currently projects earnings from continuing operations in the second quarter to be in the range of $0.45 to $0.47 per share, and continues to project earnings from continuing operations for the year in the range of $1.63 to $1.71 per share. Earnings per share information in 2008 is based on an estimated average of 95.0 million shares outstanding.
Penske Automotive will host a conference call discussing financial results relating to the first quarter of 2008 on April 29, 2008, at2:00 p.m. EDT. To listen to the conference call, participants must dial(800) 230-1951 [International, please dial (612) 332-0530]. The call will be simultaneously broadcast over the Internet through the Penske Automotive Group website atwww.penskeautomotive.com.
About Penske Automotive
Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 316 retail automotive franchises, representing more than 40 different brands, and 27 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 19 states and Puerto Rico and 145 franchises located outside the United States, primarily in the United Kingdom. Penske Automotive is a member of the Fortune 500 and Russell 1000 and has approximately 16,000 employees. smart and fortwo are registered trademarks of Daimler AG.
Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.’s future sales and earnings potential. Actual results may vary materially because of risks and uncertainties, including external factors such as interest rate fluctuations, changes in consumer spending and other factors over which management has no 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, 2007, 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.
This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations and related earnings per share, which exclude certain items disclosed in the release. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure and the period-to-period comparability of the Company’s results from operations.
1
PENSKE AUTOMOTIVE GROUP, INC. Consolidated Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited)
First Quarter
2008
2007
Revenues:
New Vehicle
$
1,635,602
$
1,624,778
Used Vehicle
803,456
780,345
Finance and Insurance, Net
75,068
67,832
Service and Parts
363,385
347,954
Distribution
63,770
- -
Fleet and Wholesale Vehicle
263,189
259,106
Total Revenues
3,204,470
3,080,015
Cost of Sales:
New Vehicle
1,497,644
1,488,202
Used Vehicle
735,849
719,240
Service and Parts
159,833
154,798
Distribution
53,618
- -
Fleet and Wholesale Vehicle
263,468
256,008
Total Cost of Sales
2,710,412
2,618,248
Gross Profit
494,058
461,767
SG&A Expenses
399,173
369,711
Depreciation and Amortization
13,501
12,340
Operating Income
81,384
79,716
Floor Plan Interest Expense
(17,312
)
(15,816
)
Other Interest Expense
(12,043
)
(18,823
)
Equity in Earnings of Affiliates
1,392
(821
)
Debt Redemption Charge
- -
(18,634
)
Income from Continuing Operations Before Income Taxes and Minority Interests
53,421
25,622
Income Taxes
(19,147
)
(8,796
)
Minority Interests
(435
)
(294
)
Income from Continuing Operations
33,839
16,532
Income (Loss) from Discontinued Operations, Net of Tax
91
(1,950
)
Net Income
$
33,930
$
14,582
Income from Continuing Operations Per Diluted Share
$
0.36
$
0.18
Diluted EPS
$
0.36
$
0.15
Diluted Weighted Average Shares Outstanding
94,657
94,412
2
PENSKE AUTOMOTIVE GROUP, INC. Consolidated Condensed Balance Sheets (Amounts In Thousands) (Unaudited)
3/31/08
12/31/07
Assets
Cash and Cash Equivalents
$
20,394
$
11,690
Accounts Receivable, Net
503,463
448,985
Inventories
1,818,846
1,682,736
Other Current Assets
89,092
65,948
Assets Held for Sale
110,307
96,638
Total Current Assets
2,542,102
2,305,997
Property and Equipment, Net
650,360
617,874
Intangibles
1,661,243
1,659,788
Other Assets
87,466
84,894
Total Assets
$
4,941,171
$
4,668,553
Liabilities and Stockholders’ Equity
Floor Plan Notes Payable
$
1,198,824
$
1,070,882
Floor Plan Notes Payable – Non-Trade
502,620
476,854
Accounts Payable
291,725
266,726
Accrued Expenses
257,312
212,310
Current Portion Long-Term Debt
14,437
14,522
Liabilities Held for Sale
68,898
54,745
Total Current Liabilities
2,333,816
2,096,039
Long-Term Debt
829,982
830,106
Other Long-Term Liabilities
328,893
320,949
Total Liabilities
3,492,691
3,247,094
Stockholders’ Equity
1,448,480
1,421,459
Total Liabilities and Stockholders’ Equity
$
4,941,171
$
4,668,553
3
PENSKE AUTOMOTIVE GROUP, INC. Selected Data
Three Months
2008
2007
Total Retail Units
New Retail
45,550
45,105
Used Retail
26,911
25,550
Total Retail
72,461
70,655
smart Wholesale Units
4,913
—
Same-Store Retail Units
New Same-Store Retail
41,668
44,659
Used Same-Store Retail
25,832
24,580
Total Same-Store Retail
67,500
69,239
Same-Store Retail Revenue
New Vehicles
$
1,518,819
$
1,607,937
Used Vehicles
768,434
751,735
Finance and Insurance, Net
71,151
67,452
Service and Parts
345,233
341,416
Total Same-Store Retail
$
2,703,637
$
2,768,540
Same-Store Retail Revenue Growth
New Vehicles
(5.5
%)
7.6
%
Used Vehicles
2.2
%
20.9
%
Finance and Insurance, Net
5.5
%
10.7
%
Service and Parts
1.1
%
10.4
%
Revenue Mix
New Vehicles
51.1
%
52.8
%
Used Vehicles
25.1
%
25.3
%
Finance and Insurance, Net
2.3
%
2.2
%
Service and Parts
11.3
%
11.3
%
Distribution
2.0
%
—
%
Fleet and Wholesale
8.2
%
8.4
%
Average Retail Selling Price
New Vehicles
$
35,908
$
36,022
Used Vehicles
29,854
30,542
Gross Margin
15.4
%
15.0
%
Retail Gross Margin – by Product
New Vehicles
8.4
%
8.4
%
Used Vehicles
8.4
%
7.8
%
Service and Parts
56.0
%
55.5
%
Gross Profit per Retail Transaction
New Vehicles
$
3,029
$
3,028
Used Vehicles
2,512
2,392
Finance and Insurance
1,036
960
4
PENSKE AUTOMOTIVE GROUP, INC. Selected Data (Continued)
Three Months
2008
2007
Brand Mix:
BMW
21
%
22
%
Toyota / Lexus
20
%
19
%
Honda / Acura
14
%
14
%
Mercedes Benz
10
%
11
%
Audi
8
%
8
%
Land Rover
5
%
6
%
Ferrari / Maserati
4
%
2
%
Porsche
3
%
4
%
General Motors
3
%
3
%
Other
12
%
11
%
100
%
100
%
Premium
65
%
66
%
Foreign
29
%
28
%
Domestic Big 3
6
%
6
%
100
%
100
%
Revenue Mix:
U.S.
60
%
60
%
International
40
%
40
%
100
%
100
%
Debt to Total Capital Ratio
37
%
40
%
Rent Expense
$
40,174
$
36,235
5
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