Income from Continuing Operations Attributable to Common Shareholders Increases 4.9% to $83.2 Million; Excluding Foreign Exchange +14.4% to $90.7 Million
Earnings Per Share from Continuing Operations Attributable to Common Shareholders Increases 7.8% to $0.97; Excluding Foreign Exchange +17.8% to $1.06
BLOOMFIELD HILLS, MI,April 26, 2017 –Penske Automotive Group, Inc. (NYSE:PAG), an international transportation services company, today announced record first quarter results, including record revenue, income from continuing operations and earnings per share. For the three months ended March 31, 2017, income from continuing operations attributable to common shareholders increased 4.9% to $83.2 million, and related earnings per share increased 7.8% to $0.97, when compared to the same period last year. Foreign exchange negatively impacted income from continuing operations attributable to common shareholders by $7.5 million, and earnings per share attributable to common shareholders by $0.09. Excluding the foreign exchange impact, income from continuing operations attributable to common shareholders would have increased 14.4% to $90.7 million and earnings per share would have increased 17.8% to $1.06.
For the three months ended March 31, 2017, total automotive units retailed increased 11.6%, driven by strength in the company’s U.K. operations and acquisitions. Total same-store units retailed declined 0.4%. Total revenue increased 5.3% to $5.1 billion, and same-store retail revenue declined 2.2%. Foreign exchange rates negatively impacted revenues by approximately $287.6 million. Excluding the foreign exchange impact, total revenue would have increased 11.3% to $5.4 billion and same-store retail revenue would have increased 3.7%.
Commenting on the company’s results, Penske Automotive Group Chairman Roger S. Penske said, “Our diversified transportation services business delivered another outstanding quarter of record results despite foreign currency headwinds. I am pleased to see increases in average gross profit per transaction for new vehicles, used vehicles and finance and insurance when excluding the impact from foreign exchange, coupled with another strong quarter of record results by our U.K. business. As we look to the future our recent acquisitions combined with the continued performance of our existing business provide a solid foundation for growth and profitability.”
New -2.9%; Used -2.7%; Finance & Insurance +4.9%; Service and Parts +0.9%
Excluding f/x: New +2.8%; Used +4.1%; Finance & Insurance +11.2%; Service and Parts +4.9%
Average Gross Profit Per Unit
New $2,848, -$140/unit; Gross Margin 7.7%, flat
Excluding f/x $3,025, +$37/unit
Used $1,512, -$86/unit; Gross Margin 6.1%, +10 basis points
Excluding f/x $1,606, +$8/unit
Finance & Insurance $1,104, +$42/unit
Excluding f/x $1,174, +$112/unit
Automotive retail results include the company’s recently acquired used vehicle superstores, which are located in the U.S. and in the U.K. During the first quarter of 2017, these used vehicle dealerships retailed 8,200 units, generating $143.1 million in revenue and $24.6 million in gross profit. The average transaction price was $14,372, generating a gross profit per unit of $1,382. Finance and insurance gross profit per unit was $1,147.
Retail Commercial Truck Operations
The company operates twenty locations in the U.S. and Canada under the “Premier Truck Group” brand name, offering primarily the Freightliner and Western Star brands. For the three months ended March 31, 2017, Premier Truck Group retailed 1,507 units, generated $211.7 million of revenue, and $36.4 million of gross profit, principally through the retail sale of new/used medium-and heavy-duty trucks and service/parts sales. For the three months ended March 31, 2017, gross profit per used truck retailed improved to $2,589 from a loss of $1,471 per unit in the same period last year, as used truck prices stabilized. Service and parts gross profit represented approximately 79% of Premier Truck Group’s gross profit for the three months ended March 31, 2017.
Penske Truck Leasing
Penske Truck Leasing Co., L.P. (“PTL”) is a leading provider of full-service truck leasing, truck rental, contract maintenance and logistics services. For the three months ended March 31, 2017, we recorded $11.9 million as part of equity in earnings of affiliates compared to $3.5 million for the three months ended March 31, 2016. The company acquired an additional 14.4% ownership interest in PTL in July 2016, increasing our ownership to 23.4%. Accordingly, the company accounts for its ownership interest in PTL using the equity method of accounting.
Acquisitions
During the three months ended March 31, 2017, the company completed acquisitions representing approximately $900 million in estimated annualized revenue. These acquisitions include a Jaguar and Land Rover dealership in Paramus, New Jersey, U.S.-based CarSense and U.K.-based CarShop, both of which are stand-alone specialty retailers of used vehicles.
In April 2017, the company announced that it had acquired Schumacher European, LTD., an 88,000 square foot Mercedes-Benz and Sprinter dealership with 67 service bays located in Phoenix, Arizona. Schumacher European is expected to add approximately $250 million in estimated annualized revenue. The Schumacher dealership is located contiguous to the company’s Scottsdale 101 Auto Collection which includes 15 franchises, over 220 service bays and generates over $800 million in annual revenues.
Conference Call
Penske Automotive will host a conference call discussing financial results relating to the first quarter of 2017 onWednesday, April 26, 2017, at2:00 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial(800) 700-7860 — [International, please dial (612) 332-0720]. The call will also be simultaneously broadcast over the Internet through the Investor Relations section of the Penske Automotive Group website. Additionally, an investor presentation relating to the first quarter 2017 financial results has been posted to the company’s website. To access the presentation or to listen to the company’s webcast, please refer towww.penskeautomotive.com.
About Penske Automotive
Penske Automotive Group, Inc., (NYSE:PAG) headquartered in Bloomfield Hills, Michigan, is an international transportation services company that operates automotive and commercial truck dealerships principally in the United States, Canada, and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. PAG employs more than 25,000 people worldwide and is a member of the Fortune 500 and Russell 2000. For additional information, visit the company’s website at www.penskeautomotive.com.
Non-GAAP Financial Measures
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, and earnings before interest, taxes, depreciation and amortization (“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. 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 and foreign currency exchange rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters, recall 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, 2016, and its other filings with the Securities and Exchange Commission (“SEC”). This press release speaks only as of its date, and Penske Automotive Group disclaims any duty to update the information herein.
Find a vehicle:http://www.penskecars.com Engage Penske Automotive:http://www.penskesocial.com Like Penske Automotive on Facebook:https://facebook.com/PenskeCars Follow Penske Automotive on Twitter: https://twitter.com/Penskecarscorp Visit Penske Automotive on YouTube:http://www.youtube.com/penskecars
Inquiries should contact:
J.D. Carlson Executive Vice President and Chief Financial Officer Penske Automotive Group, Inc. 248-648-2810 jcarlson@penskeautomotive.com
Anthony R. Pordon Executive Vice President Investor Relations and Corporate Development Penske Automotive Group, Inc. 248-648-2540 tpordon@penskeautomotive.com
# # #
1
PENSKE AUTOMOTIVE GROUP, INC. Consolidated Condensed Statements of Income (Amounts In Millions, Except Per Share Data) (Unaudited)
Three Months Ended
March 31,
Increase/
2017
2016
(Decrease)
Revenue
$
5,081.1
$
4,824.6
5.3
%
Cost of Sales
4,306.8
4,100.8
5.0
%
Gross Profit
$
774.3
$
723.8
7.0
%
SG&A Expenses
601.7
558.9
7.7
%
Depreciation
22.4
20.8
7.7
%
Operating Income
$
150.2
$
144.1
4.2
%
Floor Plan Interest Expense
(13.7
)
(12.8
)
7.0
%
Other Interest Expense
(25.0
)
(17.2
)
45.3
%
Equity in Earnings of Affiliates
13.2
5.5
140.0
%
Income from Continuing Operations Before Income Taxes
$
124.7
$
119.6
4.3
%
Income Taxes
(41.1
)
(39.4
)
4.3
%
Income from Continuing Operations
$
83.6
$
80.2
4.2
%
Loss from Discontinued Operations, net of tax
(0.6
)
—
nm
Net Income
$
83.0
$
80.2
3.5
%
Less: Income Attributable to Non-Controlling Interests
0.4
0.9
(55.6
%)
Net Income Attributable to Common Shareholders
$
82.6
$
79.3
4.2
%
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations
$
83.6
$
80.2
4.2
%
Less: Income Attributable to Non-Controlling Interests
0.4
0.9
(55.6
%)
Income from Continuing Operations, net of tax
$
83.2
$
79.3
4.9
%
Loss from Discontinued Operations, net of tax
(0.6
)
—
nm
Net Income Attributable to Common Shareholders
$
82.6
$
79.3
4.2
%
Income from Continuing Operations Per Share
$
0.97
$
0.90
7.8
%
Income Per Share
$
0.96
$
0.90
6.7
%
Weighted Average Shares Outstanding
85.6
88.3
(3.1
%)
nm – not meaningful
2
PENSKE AUTOMOTIVE GROUP, INC. Consolidated Condensed Balance Sheets (Amounts In Millions) (Unaudited)
March 31,
December 31,
2017
2016
Assets:
Cash and Cash Equivalents
$
72.2
$
24.0
Accounts Receivable, Net
852.2
879.0
Inventories
3,565.8
3,408.2
Other Current Assets
99.3
73.9
Assets Held for Sale
—
8.4
Total Current Assets
4,589.5
4,393.5
Property and Equipment, Net
1,874.7
1,806.5
Intangibles
1,985.4
1,711.3
Other Long-Term Assets
945.8
921.7
Total Assets
$
9,395.4
$
8,833.0
Liabilities and Equity:
Floor Plan Notes Payable
$
2,104.8
$
2,084.5
Floor Plan Notes Payable – Non-Trade
1,296.4
1,233.3
Accounts Payable
555.9
497.4
Accrued Expenses
413.9
360.0
Current Portion Long-Term Debt
48.4
48.3
Liabilities Held for Sale
0.8
6.1
Total Current Liabilities
4,420.2
4,229.6
Long-Term Debt
1,989.0
1,828.8
Other Long-Term Liabilities
1,089.3
995.1
Total Liabilities
7,498.5
7,053.5
Equity
1,896.9
1,779.5
Total Liabilities and Equity
$
9,395.4
$
8,833.0
3
PENSKE AUTOMOTIVE GROUP, INC. Consolidated Operations Selected Data (Unaudited)
Three Months Ended
March 31,
2017
2016
Geographic Revenue Mix:
North America
56.5
%
57.3
%
U.K.
35.9
%
35.4
%
Other International
7.6
%
7.3
%
Total
100.0
%
100.0
%
Revenue: (Amounts in Millions)
Retail Automotive
$
4,756.4
$
4,512.9
Retail Commercial Trucks
211.7
206.7
Commercial Vehicles Australia/Power Systems and Other
113.0
105.0
Total
$
5,081.1
$
4,824.6
Gross Profit: (Amounts in Millions)
Retail Automotive
$
708.3
$
665.0
Retail Commercial Trucks
36.4
33.2
Commercial Vehicles Australia/Power Systems and Other
29.6
25.6
Total
$
774.3
$
723.8
Gross Margin:
Retail Automotive
14.9
%
14.7
%
Retail Commercial Trucks
17.2
%
16.1
%
Commercial Vehicles Australia/Power Systems and Other
26.2
%
24.4
%
Total
15.2
%
15.0
%
4
PENSKE AUTOMOTIVE GROUP, INC. Consolidated Operations Selected Data (Unaudited)
Three Months Ended
March 31,
Increase/
2017
2016
(Decrease)
Operating Items as a Percentage of Revenue:
Gross Profit
15.2
%
15.0
%
20 bps
Selling, General and Administrative Expenses
11.8
%
11.6
%
20 bps
Operating Income
3.0
%
3.0
%
--- bps
Inc. From Cont. Ops. Before Inc. Taxes
2.5
%
2.5
%
--- bps
Operating Items as a Percentage of Total Gross Profit:
Selling, General and Administrative Expenses
77.7
%
77.2
%
50 bps
Operating Income
19.4
%
19.9
%
(50 bps)
Three Months Ended
March 31,
2017
2016
Increase/ (Decrease)
(Amounts in Millions)
EBITDA*
$
172.1
$
157.6
9.2
%
Floorplan Credits
$
8.3
$
8.9
(6.7
%)
Rent Expense
$
53.4
$
51.5
3.7
%
*
See the following Non-GAAP reconciliation table.
5
PENSKE AUTOMOTIVE GROUP, INC. Retail Automotive Operations Selected Data (Unaudited)
Three Months Ended
March 31,
2017
2016
Retail Automotive Units:
New Retail
62,188
58,753
Used Retail
62,284
52,741
Total
124,472
111,494
Retail Automotive Revenue: (Amounts in Millions)
New Vehicles
$
2,307.4
$
2,268.2
Used Vehicles
1,541.0
1,412.4
Finance and Insurance, Net
137.4
118.4
Service and Parts
498.9
478.1
Fleet and Wholesale
271.7
235.8
Total Revenue
$
4,756.4
$
4,512.9
Retail Automotive Gross Profit: (Amounts in Millions)
New Vehicles
$
177.1
$
175.5
Used Vehicles
94.1
84.3
Finance and Insurance, Net
137.4
118.4
Service and Parts
��
293.7
281.4
Fleet and Wholesale
6.0
5.4
Total Gross Profit
$
708.3
$
665.0
Retail Automotive Revenue Per Vehicle Retailed:
New Vehicles
$
37,103
$
38,607
Used Vehicles
24,742
26,780
Retail Automotive Gross Profit Per Vehicle Retailed:
New Vehicles
$
2,848
$
2,988
Used Vehicles
1,512
1,598
Finance & Insurance
1,104
1,062
6
PENSKE AUTOMOTIVE GROUP, INC. Retail Automotive Operations Selected Data (Unaudited)
Three Months Ended
March 31,
2017
2016
Retail Automotive Revenue Mix Percentages:
New Vehicles
48.5
%
50.3
%
Used Vehicles
32.4
%
31.3
%
Finance and Insurance, Net
2.9
%
2.6
%
Service and Parts
10.5
%
10.6
%
Fleet and Wholesale
5.7
%
5.2
%
Total
100.0
%
100.0
%
Retail Automotive Gross Profit Mix Percentages:
New Vehicles
25.0
%
26.4
%
Used Vehicles
13.3
%
12.7
%
Finance and Insurance, Net
19.4
%
17.8
%
Service and Parts
41.5
%
42.3
%
Fleet and Wholesale
0.8
%
0.8
%
Total
100.0
%
100.0
%
Three Months Ended
March 31,
Increase/
2017
2016
(Decrease)
Retail Automotive Gross Margin:
New Vehicles
7.7
%
7.7
%
--- bps
Used Vehicles
6.1
%
6.0
%
10 bps
Service and Parts
58.9
%
58.9
%
--- bps
Fleet and Wholesale
2.2
%
2.3
%
(10 bps)
Total Gross Margin
14.9
%
14.7
%
20 bps
7
PENSKE AUTOMOTIVE GROUP, INC.
Retail Automotive Operations Selected Data (Unaudited)
Three Months Ended
March 31,
2017
2016
Retail Automotive Revenue Mix:
Premium:
BMW / MINI
23
%
25
%
Audi
14
%
14
%
Mercedes-Benz
10
%
10
%
Land Rover
7
%
7
%
Porsche
6
%
5
%
Lexus
3
%
4
%
Ferrari / Maserati
3
%
2
%
Acura
1
%
1
%
Bentley
1
%
1
%
Others
2
%
3
%
Total Premium
70
%
72
%
Volume Non-U.S.:
Toyota
10
%
11
%
Honda
7
%
7
%
Volkswagen
4
%
3
%
Nissan
1
%
1
%
Others
2
%
2
%
Total Volume Non-U.S.
24
%
24
%
U.S.:
General Motors / Chrysler / Ford
3
%
4
%
Stand-Alone Used
3
%
—
Total
100
%
100
%
Retail Automotive Geographic Revenue Mix:
U.S.
55.8
%
56.6
%
U.K.
38.4
%
37.8
%
Other International
5.8
%
5.6
%
Total
100.0
%
100.0
%
Retail Automotive Geographic Gross Profit Mix:
U.S.
60.7
%
61.2
%
U.K.
33.9
%
33.5
%
Other International
5.4
%
5.3
%
Total
100.0
%
100.0
%
8
PENSKE AUTOMOTIVE GROUP, INC. Retail Automotive Operations Same-Store Selected Data (Unaudited)
Three Months Ended
March 31,
2017
2016
Retail Automotive Same-Store Units:
New Retail
58,725
58,387
Used Retail
51,852
52,615
Total
110,577
111,002
Retail Automotive Same-Store Revenue: (Amounts in Millions)
New Vehicles
$
2,194.6
$
2,260.8
Used Vehicles
1,371.9
1,410.2
Finance and Insurance, Net
124.1
118.3
Service and Parts
481.2
477.1
Fleet and Wholesale
246.1
235.6
Total Revenue
$
4,417.9
$
4,502.0
Retail Automotive Same-Store Gross Profit: (Amounts in Millions)
New Vehicles
$
166.4
$
175.0
Used Vehicles
80.3
84.2
Finance and Insurance, Net
124.1
118.3
Service and Parts
282.8
281.1
Fleet and Wholesale
5.3
5.5
Total Gross Profit
$
658.9
$
664.1
Retail Automotive Same-Store Revenue Per Vehicle Retailed:
New Vehicles
$
37,370
$
38,721
Used Vehicles
26,457
26,802
Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:
New Vehicles
$
2,833
$
2,997
Used Vehicles
1,549
1,601
Finance & Insurance
1,123
1,066
9
PENSKE AUTOMOTIVE GROUP, INC. Retail Commercial Truck Operations Selected Data (Unaudited)
Three Months Ended
March 31,
Retail Commercial Truck Units:
2017
2016
New Retail
1,126
1,160
Used Retail
381
271
Total
1,507
1,431
Retail Commercial Truck Revenue: (Amounts in Millions)
New Vehicles
$
110.7
$
116.7
Used Vehicles
19.0
13.5
Finance and Insurance, Net
2.1
1.9
Service and Parts
78.0
71.4
Lease, Rental & Wholesale
1.9
3.2
Total Revenue
$
211.7
$
206.7
Retail Commercial Truck Gross Profit: (Amounts in Millions)
New Vehicles
$
4.5
$
4.9
Used Vehicles
1.0
(0.4
)
Finance and Insurance, Net
2.2
1.9
Service and Parts
28.8
26.4
Lease, Rental & Wholesale
(0.1
)
0.4
Total Gross Profit
$
36.4
$
33.2
Retail Commercial Truck Revenue Per Vehicle Retailed:
New Vehicles
$
98,271
$
100,618
Used Vehicles
49,845
49,727
Retail Commercial Truck Gross Profit Per Vehicle Retailed:
New Vehicles
$
3,981
$
4,201
Used Vehicles
2,589
(1,471
)
Finance & Insurance
1,426
1,311
Retail Commercial Truck Gross Profit as a Percentage of Revenue
Gross Profit:
New Vehicles
4.1
%
4.2
%
Used Vehicles
5.3
%
(3.0
%)
Service and Parts
36.9
%
37.0
%
Lease, Rental & Wholesale
(5.3
%)
12.5
%
Total Gross Profit
17.2
%
16.1
%
10
PENSKE AUTOMOTIVE GROUP, INC. Retail Commercial Truck Operations Same-Store Selected Data (Unaudited)
Three Months Ended
March 31,
Retail Commercial Truck Same-Store Units:
2017
2016
New Retail
959
1,160
Used Retail
320
271
Total
1,279
1,431
Retail Commercial Truck Same-Store Revenue: (Amounts in Millions)
New Vehicles
$
92.5
$
116.7
Used Vehicles
16.2
13.5
Finance and Insurance, Net
1.9
1.9
Service and Parts
67.6
71.4
Lease, Rental & Wholesale
1.9
3.2
Total Revenue
$
180.1
$
206.7
Retail Commercial Truck Same-Store Gross Profit: (Amounts in Millions)
New Vehicles
$
4.1
$
4.9
Used Vehicles
0.9
(0.4
)
Finance and Insurance, Net
1.9
1.9
Service and Parts
25.4
26.4
Lease, Rental & Wholesale
(0.1
)
0.4
Total Gross Profit
$
32.2
$
33.2
Retail Commercial Truck Same-Store Revenue Per Vehicle Retailed:
New Vehicles
$
96,461
$
100,618
Used Vehicles
50,607
49,727
Retail Commercial Truck Same-Store Gross Profit Per Vehicle Retailed:
New Vehicles
$
4,279
$
4,201
Used Vehicles
2,660
(1,471
)
Finance & Insurance
1,523
1,311
Retail Commercial Truck Same-Store Gross Profit as a Percentage of Revenue
Gross Profit:
New Vehicles
4.4
%
4.2
%
Used Vehicles
5.6
%
(3.0
%)
Service and Parts
37.6
%
37.0
%
Lease, Rental & Wholesale
(5.3
%)
12.5
%
Total Gross Profit
17.9
%
16.1
%
11
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Non-GAAP Reconciliations (Unaudited)
The following table reconciles reported net income to earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the three months ended March 31, 2017 and 2016:
Three Months Ended
March 31,
Increase/
2017
2016
(Decrease)
(Amounts in Millions)
Net Income
$
83.0
$
80.2
3.5
%
Add: Depreciation
22.4
20.8
7.7
%
Other Interest Expense
25.0
17.2
45.3
%
Income Taxes
41.1
39.4
4.3
%
Loss from Discontinued Operations, net of tax
0.6
—
nm
EBITDA
$
172.1
$
157.6
9.2
%
nm – not meaningful
12
We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.
