Exhibit 99.1
NEWS RELEASE |  | |
| 800 Gessner• Suite 500• Houston, TX 77024 |
AT GROUP 1: | President and CEO | Earl J. Hesterberg | (713) 647-5700 | |||
| Senior Vice President and CFO | John C. Rickel | (713) 647-5700 | ||||
| Manager, Investor Relations | Kim Paper Canning | (713) 647-5700 | ||||
AT Fleishman-Hillard: | Investors | John Roper | (713) 513-9505 | |||
AT Pierpont Communications: | Media | Clint L. Woods | (713) 627-2223 | |||
FOR IMMEDIATE RELEASE
TUESDAY, JULY 28, 2009
TUESDAY, JULY 28, 2009
GROUP 1 AUTOMOTIVE REPORTS BETTER-THAN-EXPECTED 2009 SECOND-QUARTER EARNINGS
Company Reinstates Full-Year Guidance
HOUSTON, July 28, 2009 — Group 1 Automotive, Inc. (NYSE: GPI),a Fortune 500 automotive retailer, today reported second-quarter adjusted net income from continuing operations of $10.3 million, or $0.44 per diluted share, for the period ended June 30, 2009, as compared to the 2008 results of $17.8 million, or $0.79 per diluted share. For comparison purposes, as shown in the attached reconciliation table, the 2009 second-quarter results included after-tax charges of $0.2 million, or $0.01 per diluted share, for a non-cash impairment charge for a property related to a domestic manufacturer; pre-payment charges on independent mortgage agreements that were rolled into the existing syndicated mortgage facility; and, gains on a dealership disposition and debt redemptions. The 2008 second-quarter results included lease termination after-tax charges of $0.5 million, or $0.02 per diluted share. Including the charges, net income from continuing operations was $10.1 million, or $0.43 per diluted share, for the quarter ended June 30, 2009.
Second-Quarter Operating Highlights
| • | Same-store new vehicle margins expanded 40 basis points from first-quarter, to 5.8 percent, as lower inventory levels across the industry begin to reduce selling pressure. |
| • | Same-store gross margin improved 130 basis points, to 17.2 percent, from second quarter 2008. The gross margin improvement was attributed to improved total used vehicle margins, as well as a favorable mix shift to the higher-margin parts and service business from the lower-margin new vehicle business. |
| • | Group 1’s same-store parts and service business held relatively stable, with a gross margin of 52.6 percent on 3.7 percent lower sales. |
| • | On a consolidated basis, selling, general and administrative (SG&A) expenses were reduced $44.2 million in the quarter, bringing the total expense reduction to $86.1 million this year. |
| • | New vehicle inventory was reduced by $110 million, to $374 million, bringing inventory down to a 55 days’ supply. |
“In addition to the stable profitability of Group 1’s parts and service business, the cost cutting measures we completed in the first quarter coupled with our ongoing inventory management efforts delivered better-than-anticipated results in the second quarter,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “Group 1’s operating team has been working diligently to reduce expenses and new vehicle inventories, resulting in more-streamlined operations that run profitably at current selling rates.”
Group 1 Automotive, Inc.
Corporate Development Update
Group 1 previously announced that it augmented its Houston portfolio by acquiring a Hyundai franchise in April with estimated annual revenues of approximately $36.7 million.
Group 1 also previously announced that it sold a Ford dealership in March with trailing-12-month revenues of $38.9 million. Subsequently, in June, Group 1 terminated a Volvo franchise in New York with trailing-12-month revenues of $25.3 million.
Group 1’s Balance Sheet Strengthened
Group 1 announced that it has remained in compliance with all of its debt covenants as of June 30.
Group 1 reported it reduced its new vehicle inventory during the quarter by $109.7 million, to $374.4 million as of June 30. In addition, the company reduced non-floor plan debt by an additional $41.3 million during the quarter, reflecting primarily the repurchase of $6.7 million of its 2.25 percent convertible bonds, paying down its acquisition line by $30.0 million and reducing its mortgage debt by $4.7 million. The company ended the quarter with overall available liquidity of $172.7 million.
“The combination of improving operating performance and significant reductions in debt continues to strengthen the balance sheet and ensure strong compliance with our debt covenants,” said John C. Rickel, Group 1’s senior vice president and chief financial officer.
2009 Full-Year Guidance
Group 1 believes that the automotive retail market has stabilized and is, therefore, reinstating 2009 full-year earnings guidance with a range of $1.25 to $1.35 per diluted share under the following assumptions:
| • | Industry seasonally adjusted annual sales rate (SAAR) of 10.0 million vehicles | ||
| • | SG&A expenses as a percent of gross profit at 80 percent to 83.5 percent, excluding any one-time items, as lower sales revenues are expected to offset cost improvements | ||
| • | Total year-over-year reduction in SG&A expenses of $120 million at a 10 million SAAR level | ||
| • | Tax rate of 40.0 percent | ||
| • | Estimated average diluted shares outstanding of 23.2 million | ||
| • | Capital expenditures of $25 million or less | ||
| • | Guidance includes the impact of APB 14-1 and excludes the impact of future acquisitions and dispositions, as well as potential related exit costs |
On a same-store basis:
| • | Retail vehicle margins consistent with six-month 2009 levels | ||
| • | Parts and service revenues 3 percent to 5 percent lower | ||
| • | Finance and insurance gross profit at $950 to $975 per retail unit |
Second-Quarter Earnings Conference Call
Group 1’s senior management will host a conference call today at 10 a.m. ET to discuss the second-quarter financial results and the company’s 2009 outlook and strategy.
The conference call will be simulcast live on the Internet at www.group1auto.com through the Investor Relations section. 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:
Group 1 Automotive, Inc.
Domestic: 877-419-6596
International: 719-325-4862
Confirmation code: 8665542
International: 719-325-4862
Confirmation code: 8665542
A telephonic replay will be available following the call through Aug. 7 by dialing:
Domestic: 888-203-1112
International: 719-457-0820
Confirmation code: 8665542
International: 719-457-0820
Confirmation code: 8665542
About Group 1 Automotive, Inc.
Group 1 owns and operates 98 automotive dealerships, 132 franchises, and 24 collision service centers in the United States and the United Kingdom that offer 31 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts.
Group 1 Automotive can be reached on the Internet at www.group1auto.com.
This press release contains “forward-looking statements,” which are statements related to future, not past, events. 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” or “will.” Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause 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. These factors, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K under the headings “Business—Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We urge you to carefully consider this information. We undertake no duty to update our forward-looking statements, including our earnings outlook.
FINANCIAL TABLES TO FOLLOW
Group 1 Automotive, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 608,592 | $ | 971,281 | (37.3 | )% | $ | 1,155,884 | $ | 1,860,062 | (37.9 | )% | |||||||||||||
| Used vehicle retail sales | 249,770 | 298,593 | (16.4 | ) | 474,629 | 602,588 | (21.2 | ) | |||||||||||||||||
| Used vehicle wholesale sales | 34,649 | 67,496 | (48.7 | ) | 69,385 | 134,723 | (48.5 | ) | |||||||||||||||||
| Parts and service | 183,105 | 192,753 | (5.0 | ) | 363,970 | 383,589 | (5.1 | ) | |||||||||||||||||
| Finance and insurance | 32,639 | 52,992 | (38.4 | ) | 64,704 | 105,415 | (38.6 | ) | |||||||||||||||||
| Total revenues | 1,108,755 | 1,583,115 | (30.0 | )% | 2,128,572 | 3,086,377 | (31.0 | )% | |||||||||||||||||
COST OF SALES: | |||||||||||||||||||||||||
| New vehicle retail sales | 573,612 | 908,262 | (36.8 | )% | 1,091,430 | 1,739,899 | (37.3 | )% | |||||||||||||||||
| Used vehicle retail sales | 223,942 | 266,192 | (15.9 | ) | 424,195 | 536,605 | (20.9 | ) | |||||||||||||||||
| Used vehicle wholesale sales | 33,541 | 68,290 | (50.9 | ) | 67,333 | 135,458 | (50.3 | ) | |||||||||||||||||
| Parts and service | 86,545 | 88,960 | (2.7 | ) | 171,845 | 175,426 | (2.0 | ) | |||||||||||||||||
| Total cost of sales | 917,640 | 1,331,704 | (31.1 | )% | 1,754,803 | 2,587,388 | (32.2 | )% | |||||||||||||||||
GROSS PROFIT | 191,115 | 251,411 | (24.0 | )% | 373,769 | 498,989 | (25.1 | )% | |||||||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 151,113 | 195,337 | (22.6 | ) | 304,347 | 390,399 | (22.0 | ) | |||||||||||||||||
| DEPRECIATION AND AMORTIZATION EXPENSE | 6,462 | 6,497 | (0.5 | ) | 12,875 | 12,314 | 4.6 | ||||||||||||||||||
| ASSET IMPAIRMENTS | 2,040 | — | 100.0 | 2,135 | — | 100.0 | |||||||||||||||||||
OPERATING INCOME | 31,500 | 49,577 | (36.5 | )% | 54,412 | 96,276 | (43.5 | )% | |||||||||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||||||||||||
| Floorplan interest expense | (7,857 | ) | (12,392 | ) | (36.6 | ) | (16,819 | ) | (24,400 | ) | (31.1 | ) | |||||||||||||
| Other interest expense, net | (6,136 | ) | (7,065 | ) | (13.1 | ) | (11,598 | ) | (14,904 | ) | (22.2 | ) | |||||||||||||
| Gain on redemption of long-term debt | 2,102 | — | 100.0 | 18,090 | — | 100.0 | |||||||||||||||||||
| Other income, net | (5 | ) | (36 | ) | (86.1 | ) | (2 | ) | 723 | (100.3 | ) | ||||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND ADOPTION OF APB 14-1 | 19,604 | 30,084 | (34.8 | )% | 44,083 | 57,695 | (23.6 | )% | |||||||||||||||||
| PROVISION FOR INCOME TAXES | (7,445 | ) | (11,591 | ) | (35.8 | ) | (17,201 | ) | (22,101 | ) | (22.2 | ) | |||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE ADOPTION OF APB 14-1 | 12,159 | 18,493 | (34.3 | )% | 26,882 | 35,594 | (24.5 | )% | |||||||||||||||||
ADOPTION OF APB 14-1: | |||||||||||||||||||||||||
| Adjustment to gain on redemption of convertible notes | (1,870 | ) | — | 100.0 | (10,477 | ) | — | 100.0 | |||||||||||||||||
| Amortization of convertible notes discount | (1,440 | ) | (1,951 | ) | (26.2 | ) | (2,941 | ) | (3,875 | ) | (24.1 | ) | |||||||||||||
| Income tax benefit related to adoption of APB 14-1 | 1,233 | 737 | 67.3 | 4,993 | 1,465 | 240.8 | |||||||||||||||||||
| LOSS RELATED TO ADOPTION OF APB 14-1 | (2,077 | ) | (1,214 | ) | 71.1 | (8,245 | ) | (2,410 | ) | 249.6 | |||||||||||||||
INCOME FROM CONTINUING OPERATIONS | 10,082 | 17,279 | (41.7 | )% | 18,457 | 33,184 | (44.4 | )% | |||||||||||||||||
DISCONTINUED OPERATIONS: | |||||||||||||||||||||||||
| Loss related to discontinued operations | — | (2,367 | ) | (100.0 | ) | — | (3,481 | ) | (100.0 | ) | |||||||||||||||
| Income tax benefit related to loss on discontinued operations | — | 1,091 | (100.0 | ) | — | 1,478 | (100.0 | ) | |||||||||||||||||
| LOSS RELATED TO DISCONTINUED OPERATIONS | — | (1,276 | ) | (100.0 | )% | — | (2,003 | ) | (100.0 | )% | |||||||||||||||
NET INCOME | $ | 10,082 | $ | 16,003 | (37.0 | )% | $ | 18,457 | $ | 31,181 | (40.8 | )% | |||||||||||||
DILUTED INCOME PER SHARE: | |||||||||||||||||||||||||
| Income per share from continuing operations before adoption of APB 14-1 | $ | 0.52 | $ | 0.82 | (36.6 | )% | $ | 1.16 | $ | 1.57 | (26.1 | )% | |||||||||||||
| Loss per share related to adoption of APB 14-1 | (0.09 | ) | (0.05 | ) | 80.0 | (0.36 | ) | (0.11 | ) | 218.2 | |||||||||||||||
| Income per share from continuing operations | 0.43 | 0.77 | (44.2 | ) | 0.80 | 1.46 | (45.2 | ) | |||||||||||||||||
| Loss per share related to discontinued operations | — | (0.06 | ) | (100.0 | ) | — | (0.09 | ) | (100.0 | ) | |||||||||||||||
| Income per share | $ | 0.43 | $ | 0.71 | (39.4 | )% | $ | 0.80 | $ | 1.37 | (41.6 | )% | |||||||||||||
| Weighted average diluted shares outstanding | 23,288 | 22,661 | 2.8 | % | 23,107 | 22,728 | 1.7 | % | |||||||||||||||||
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
| June 30, | December 31, | |||||||||||
| 2009 | 2008 | % Change | ||||||||||
ASSETS: | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 22,527 | $ | 23,144 | (2.7 | )% | ||||||
| Contracts in transit and vehicle receivables, net | 78,881 | 102,834 | (23.3 | ) | ||||||||
| Accounts and notes receivable, net | 59,513 | 67,350 | (11.6 | ) | ||||||||
| Inventories | 541,213 | 845,944 | (36.0 | ) | ||||||||
| Deferred income taxes | 15,129 | 18,474 | (18.1 | ) | ||||||||
| Prepaid expenses and other current assets | 39,016 | 38,878 | 0.4 | |||||||||
| Total current assets | 756,279 | 1,096,624 | (31.0 | ) | ||||||||
| PROPERTY AND EQUIPMENT, net | 498,486 | 514,891 | (3.2 | ) | ||||||||
| GOODWILL AND OTHER INTANGIBLES | 656,319 | 655,784 | 0.1 | |||||||||
| OTHER ASSETS | 18,657 | 20,815 | (10.4 | ) | ||||||||
| Total assets | $ | 1,929,741 | $ | 2,288,114 | (15.7 | )% | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Floorplan notes payable — credit facility | $ | 458,247 | $ | 738,551 | (38.0 | )% | ||||||
| Offset account related to floorplan notes payable — credit facility | (44,235 | ) | (44,859 | ) | (1.4 | ) | ||||||
| Floorplan notes payable — manufacturer affiliates | 85,481 | 128,580 | (33.5 | ) | ||||||||
| Current maturities of long-term debt | 13,197 | 13,594 | (2.9 | ) | ||||||||
| Accounts payable | 70,533 | 74,235 | (5.0 | ) | ||||||||
| Accrued expenses | 85,918 | 94,395 | (9.0 | ) | ||||||||
| Total current liabilities | 669,141 | 1,004,496 | (33.4 | ) | ||||||||
| 2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $187,753 and $224,500, respectively) | 132,848 | 155,333 | (14.5 | ) | ||||||||
| 8.25% SENIOR SUBORDINATED NOTES | 73,112 | 72,962 | 0.2 | |||||||||
| MORTGAGE FACILITY, net of current maturities | 180,665 | 168,583 | 7.2 | |||||||||
| OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, | ||||||||||||
| net of current maturities | 20,900 | 50,444 | (58.6 | ) | ||||||||
| CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, | ||||||||||||
| net of current maturities | 38,558 | 39,401 | (2.1 | ) | ||||||||
| ACQUISITION LINE | 30,000 | 50,000 | (40.0 | ) | ||||||||
| DEFERRED INCOME TAXES | 17,075 | 2,768 | 516.9 | |||||||||
| LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES | 37,479 | 44,655 | (16.1 | ) | ||||||||
| OTHER LIABILITIES | 27,080 | 27,135 | (0.2 | ) | ||||||||
| Total liabilities before deferred revenues | 1,226,858 | 1,615,777 | (24.1 | ) | ||||||||
| DEFERRED REVENUES | 7,656 | 10,220 | (25.1 | ) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||||||
| Common stock | 261 | 261 | — | |||||||||
| Additional paid-in capital | 348,592 | 351,405 | (0.8 | ) | ||||||||
| Retained earnings | 455,544 | 437,087 | 4.2 | |||||||||
| Accumulated other comprehensive loss | (29,606 | ) | (38,109 | ) | (22.3 | ) | ||||||
| Treasury stock | (79,564 | ) | (88,527 | ) | (10.1 | ) | ||||||
| Total stockholders’ equity | 695,227 | 662,117 | 5.0 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,929,741 | $ | 2,288,114 | (15.7 | )% | ||||||
KEY DEBT COVENANT METRICS: * | ||||||||||||
| Senior secured leverage ratio (must be less than 2.75) | 1.40 | 1.49 | ||||||||||
| Total leverage ratio (must be less than 4.50) | 3.26 | 3.46 | ||||||||||
| Fixed charge coverage ratio (must be greater than 1.25) | 1.72 | 1.59 | ||||||||||
| Current ratio (must be greater than 1.15) | 1.26 | 1.18 | ||||||||||
| * | Refer to website, www.group1auto.com, for debt covenant calculation definitions. |
Group 1 Automotive, Inc.
Additional Information — Consolidated
(Unaudited)
Additional Information — Consolidated
(Unaudited)
| Three Months Ended, | Six Months Ended, | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||||
| NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: | ||||||||||||||||||
Region | Geographic Market | |||||||||||||||||
| Eastern | Massachusetts | 14.6 | % | 11.8 | % | 14.2 | % | 11.7 | % | |||||||||
| New Jersey | 6.7 | 7.1 | 6.9 | 6.8 | ||||||||||||||
| New York | 4.6 | 4.3 | 4.4 | 4.2 | ||||||||||||||
| New Hampshire | 3.9 | 3.7 | 3.8 | 3.5 | ||||||||||||||
| Georgia | 3.7 | 3.3 | 3.7 | 3.4 | ||||||||||||||
| Louisiana | 3.0 | 3.1 | 3.2 | 3.4 | ||||||||||||||
| Florida | 1.6 | 2.3 | 1.8 | 2.6 | ||||||||||||||
| Mississippi | 1.8 | 1.7 | 1.7 | 1.6 | ||||||||||||||
| Maryland | 1.0 | 0.6 | 1.0 | 0.3 | ||||||||||||||
| Alabama | 0.6 | 0.9 | 0.6 | 0.9 | ||||||||||||||
| South Carolina | 0.3 | 0.3 | 0.3 | 0.3 | ||||||||||||||
| 41.8 | 39.1 | 41.6 | 38.7 | |||||||||||||||
| Central | Texas | 33.1 | 32.2 | 32.5 | 32.6 | |||||||||||||
| Oklahoma | 8.8 | 9.6 | 8.5 | 9.4 | ||||||||||||||
| Kansas | 1.3 | 1.4 | 1.2 | 1.3 | ||||||||||||||
| 43.2 | 43.2 | 42.2 | 43.3 | |||||||||||||||
| Western | California | 12.7 | 16.0 | 14.1 | 16.3 | |||||||||||||
| International | United Kingdom | 2.3 | 1.7 | 2.1 | 1.7 | |||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| NEW VEHICLE UNIT SALES BRAND MIX: | ||||||||||||||||||
| Toyota/Scion/Lexus | 34.3 | % | 35.5 | % | 34.7 | % | 35.2 | % | ||||||||||
| Honda/Acura | 13.5 | 14.9 | 13.6 | 14.0 | ||||||||||||||
| Nissan/Infiniti | 12.6 | 12.7 | 12.1 | 12.9 | ||||||||||||||
| BMW/Mini | 10.3 | 8.9 | 9.7 | 8.2 | ||||||||||||||
| Ford | 8.9 | 8.7 | 9.1 | 9.7 | ||||||||||||||
| Chrysler | 6.2 | 5.7 | 6.5 | 6.3 | ||||||||||||||
| Mercedes-Benz | 5.4 | 5.7 | 5.8 | 5.6 | ||||||||||||||
| GM | 3.8 | 4.5 | 3.9 | 4.7 | ||||||||||||||
| Other | 5.0 | 3.4 | 4.6 | 3.4 | ||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| NEW VEHICLE UNIT OTHER MIX: | ||||||||||||||||||
| Import | 56.3 | % | 58.0 | % | 55.9 | % | 56.8 | % | ||||||||||
| Luxury | 26.0 | 24.3 | 25.7 | 23.8 | ||||||||||||||
| Domestic | 17.7 | 17.7 | 18.4 | 19.4 | ||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.00 | % | |||||||||||
| Car | 58.0 | % | 61.8 | % | 57.0 | % | 58.7 | % | ||||||||||
| Truck | 42.0 | 38.2 | 43.0 | 41.3 | ||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
Group 1 Automotive, Inc.
Additional Information — Consolidated
(Unaudited)
(Dollars in thousands, except per unit amounts)
Additional Information — Consolidated
(Unaudited)
(Dollars in thousands, except per unit amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 608,592 | $ | 971,281 | (37.3 | )% | $ | 1,155,884 | $ | 1,860,062 | (37.9 | )% | |||||||||||||
| Used vehicle retail sales | 249,770 | 298,593 | (16.4 | ) | 474,629 | 602,588 | (21.2 | ) | |||||||||||||||||
| Used vehicle wholesale sales | 34,649 | 67,496 | (48.7 | ) | 69,385 | 134,723 | (48.5 | ) | |||||||||||||||||
| Total used | 284,419 | 366,089 | (22.3 | ) | 544,014 | 737,311 | (26.2 | ) | |||||||||||||||||
| Parts and service | 183,105 | 192,753 | (5.0 | ) | 363,970 | 383,589 | (5.1 | ) | |||||||||||||||||
| Finance and insurance | 32,639 | 52,992 | (38.4 | ) | 64,704 | 105,415 | (38.6 | ) | |||||||||||||||||
| Total | $ | 1,108,755 | $ | 1,583,115 | (30.0 | )% | $ | 2,128,572 | $ | 3,086,377 | (31.0 | )% | |||||||||||||
GROSS MARGIN: | �� | ||||||||||||||||||||||||
| New vehicle retail sales | 5.7 | % | 6.5 | % | 5.6 | % | 6.5 | % | |||||||||||||||||
| Used vehicle retail sales | 10.3 | 10.9 | 10.6 | 10.9 | |||||||||||||||||||||
| Used vehicle wholesale sales | 3.2 | (1.2 | ) | 3.0 | (0.5 | ) | |||||||||||||||||||
| Total used | 9.5 | 8.6 | 9.6 | 8.8 | |||||||||||||||||||||
| Parts and service | 52.7 | 53.8 | 52.8 | 54.3 | |||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
| Total | 17.2 | % | 15.9 | % | 17.6 | % | 16.2 | % | |||||||||||||||||
GROSS PROFIT: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 34,980 | $ | 63,019 | (44.5 | )% | $ | 64,454 | $ | 120,163 | (46.4 | )% | |||||||||||||
| Used vehicle retail sales | 25,828 | 32,401 | (20.3 | ) | 50,434 | 65,983 | (23.6 | ) | |||||||||||||||||
| Used vehicle wholesale sales | 1,108 | (794 | ) | 239.5 | 2,052 | (735 | ) | 379.2 | |||||||||||||||||
| Total used | 26,936 | 31,607 | (14.8 | ) | 52,486 | 65,248 | (19.6 | ) | |||||||||||||||||
| Parts and service | 96,560 | 103,793 | (7.0 | ) | 192,125 | 208,163 | (7.7 | ) | |||||||||||||||||
| Finance and insurance | 32,639 | 52,992 | (38.4 | ) | 64,704 | 105,415 | (38.6 | ) | |||||||||||||||||
| Total | $ | 191,115 | $ | 251,411 | (24.0 | )% | $ | 373,769 | $ | 498,989 | (25.1 | )% | |||||||||||||
UNITS SOLD: | |||||||||||||||||||||||||
| Retail new vehicles sold | 19,954 | 32,368 | (38.4 | )% | 37,885 | 60,887 | (37.8 | )% | |||||||||||||||||
| Retail used vehicles sold | 13,914 | 16,783 | (17.1 | ) | 27,006 | 33,888 | (20.3 | ) | |||||||||||||||||
| Wholesale used vehicles sold | 6,426 | 10,304 | (37.6 | ) | 12,855 | 20,252 | (36.5 | ) | |||||||||||||||||
| Total used | 20,340 | 27,087 | (24.9 | )% | 39,861 | 54,140 | (26.4 | )% | |||||||||||||||||
GROSS PROFIT PER UNIT SOLD: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,753 | $ | 1,947 | (10.0 | )% | $ | 1,701 | $ | 1,974 | (13.8 | )% | |||||||||||||
| Used vehicle retail sales | 1,856 | 1,931 | (3.9 | ) | 1,868 | 1,947 | (4.1 | ) | |||||||||||||||||
| Used vehicle wholesale sales | 172 | (77 | ) | 323.4 | 160 | (36 | ) | 544.4 | |||||||||||||||||
| Total used | 1,324 | 1,167 | 13.5 | 1,317 | 1,205 | 9.3 | |||||||||||||||||||
| Finance and insurance (per retail unit) | $ | 964 | $ | 1,078 | (10.6 | )% | $ | 997 | $ | 1,112 | (10.3 | )% | |||||||||||||
OTHER: | |||||||||||||||||||||||||
| SG&A expenses | $ | 151,113 | $ | 195,337 | (22.6 | )% | $ | 304,347 | $ | 390,399 | (22.0 | )% | |||||||||||||
| SG&A as % revenues | 13.6 | % | 12.3 | % | 14.3 | % | 12.6 | % | |||||||||||||||||
| SG&A as % gross profit | 79.1 | % | 77.7 | % | 81.4 | % | 78.2 | % | |||||||||||||||||
| Operating margin | 2.8 | % | 3.1 | % | 2.6 | % | 3.1 | % | |||||||||||||||||
| Pretax margin | 1.8 | % | 1.9 | % | 2.1 | % | 1.9 | % | |||||||||||||||||
| Floorplan interest | $ | (7,857 | ) | $ | (12,392 | ) | (36.6 | )% | $ | (16,819 | ) | $ | (24,400 | ) | (31.1 | )% | |||||||||
| Floorplan assistance | 4,725 | 7,839 | (39.7 | ) | 9,259 | 15,565 | (40.5 | ) | |||||||||||||||||
| Net floorplan expense | $ | (3,132 | ) | $ | (4,553 | ) | (31.2 | )% | $ | (7,560 | ) | $ | (8,835 | ) | (14.4 | )% | |||||||||
Group 1 Automotive, Inc.
Additional Information — Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
Additional Information — Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 602,897 | $ | 954,220 | (36.8 | )% | $ | 1,143,572 | $ | 1,834,094 | (37.6 | )% | |||||||||||||
| Used vehicle retail sales | 247,301 | 292,781 | (15.5 | ) | 468,250 | 593,534 | (21.1 | ) | |||||||||||||||||
| Used vehicle wholesale sales | 34,207 | 66,167 | (48.3 | ) | 68,425 | 132,683 | (48.4 | ) | |||||||||||||||||
| Total used | 281,508 | 358,948 | (21.6 | ) | 536,675 | 726,217 | (26.1 | ) | |||||||||||||||||
| Parts and service | 181,333 | 188,353 | (3.7 | ) | 359,149 | 376,624 | (4.6 | ) | |||||||||||||||||
| Finance and insurance | 32,553 | 52,430 | (37.9 | ) | 64,299 | 104,501 | (38.5 | ) | |||||||||||||||||
| Total | $ | 1,098,291 | $ | 1,553,951 | (29.3 | )% | $ | 2,103,695 | $ | 3,041,436 | (30.8 | )% | |||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||||
| New vehicle retail sales | 5.8 | % | 6.5 | % | 5.6 | % | 6.5 | % | |||||||||||||||||
| Used vehicle retail sales | 10.3 | 10.8 | 10.6 | 10.9 | |||||||||||||||||||||
| Used vehicle wholesale sales | 3.1 | (0.9 | ) | 3.0 | (0.4 | ) | |||||||||||||||||||
| Total used | 9.5 | 8.7 | 9.6 | 8.9 | |||||||||||||||||||||
| Parts and service | 52.6 | 53.8 | 52.7 | 54.2 | |||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
| Total | 17.2 | % | 15.9 | % | 17.6 | % | 16.2 | % | |||||||||||||||||
GROSS PROFIT: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 34,722 | $ | 61,803 | (43.8 | )% | $ | 63,952 | $ | 118,555 | (46.1 | )% | |||||||||||||
| Used vehicle retail sales | 25,560 | 31,756 | (19.5 | ) | 49,751 | 64,910 | (23.4 | ) | |||||||||||||||||
| Used vehicle wholesale sales | 1,062 | (573 | ) | 285.3 | 2,037 | (494 | ) | 512.3 | |||||||||||||||||
| Total used | 26,622 | 31,183 | (14.6 | ) | 51,788 | 64,416 | (19.6 | ) | |||||||||||||||||
| Parts and service | 95,467 | 101,342 | (5.8 | ) | 189,390 | 204,254 | (7.3 | ) | |||||||||||||||||
| Finance and insurance | 32,553 | 52,430 | (37.9 | ) | 64,299 | 104,501 | (38.5 | ) | |||||||||||||||||
| Total | $ | 189,364 | $ | 246,758 | (23.3 | )% | $ | 369,429 | $ | 491,726 | (24.9 | )% | |||||||||||||
UNITS SOLD: | |||||||||||||||||||||||||
| Retail new vehicles sold | 19,807 | 31,825 | (37.8 | )% | 37,551 | 60,049 | (37.5 | )% | |||||||||||||||||
| Retail used vehicles sold | 13,826 | 16,437 | (15.9 | ) | 26,760 | 33,338 | (19.7 | ) | |||||||||||||||||
| Wholesale used vehicles sold | 6,375 | 10,125 | (37.0 | ) | 12,737 | 19,940 | (36.1 | ) | |||||||||||||||||
| Total used | 20,201 | 26,562 | (23.9 | )% | 39,497 | 53,278 | (25.9 | )% | |||||||||||||||||
GROSS PROFIT PER UNIT SOLD: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,753 | $ | 1,942 | (9.7 | )% | $ | 1,703 | $ | 1,974 | (13.7 | )% | |||||||||||||
| Used vehicle retail sales | 1,849 | 1,932 | (4.3 | ) | 1,859 | 1,947 | (4.5 | ) | |||||||||||||||||
| Used vehicle wholesale sales | 167 | (57 | ) | 393.0 | 160 | (25 | ) | 740.0 | |||||||||||||||||
| Total used | 1,318 | 1,174 | 12.3 | 1,311 | 1,209 | 8.4 | |||||||||||||||||||
| Finance and insurance (per retail unit) | $ | 968 | $ | 1,086 | (10.9 | )% | $ | 1,000 | $ | 1,119 | (10.6 | )% | |||||||||||||
OTHER: | |||||||||||||||||||||||||
| SG&A expenses | $ | 150,482 | $ | 190,620 | (21.1 | )% | $ | 300,728 | $ | 382,844 | (21.4 | )% | |||||||||||||
| SG&A as % revenues | 13.7 | % | 12.3 | % | 14.3 | % | 12.6 | % | |||||||||||||||||
| SG&A as % gross profit | 79.5 | % | 77.2 | % | 81.4 | % | 77.9 | % | |||||||||||||||||
| Operating margin | 3.0 | % | 3.2 | % | 2.7 | % | 3.2 | % | |||||||||||||||||
| Floorplan interest | $ | (7,816 | ) | $ | (12,153 | ) | (35.7 | )% | $ | (16,731 | ) | $ | (24,020 | ) | (30.3 | )% | |||||||||
| Floorplan assistance | 4,724 | 7,669 | (38.4 | ) | 9,240 | 15,307 | (39.6 | ) | |||||||||||||||||
| Net floorplan expense | $ | (3,092 | ) | $ | (4,484 | ) | (31.0 | )% | $ | (7,491 | ) | $ | (8,713 | ) | (14.0 | )% | |||||||||
| (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. |
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
NET INCOME FROM CONTINUING OPERATIONS RECONCILIATION:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||||
| Reported net income from continuing operations | $ | 10,082 | $ | 17,279 | (41.7) | % | $ | 18,457 | $ | 33,184 | (44.4) | % | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Non-Cash asset impairments charges | 1,265 | — | 1,265 | — | |||||||||||||||||||||
| Mortgage debt refinance charges | 331 | — | 331 | — | |||||||||||||||||||||
| Gain on dealership disposition | (902 | ) | — | (451 | ) | — | |||||||||||||||||||
| Gain on debt redemption | (475 | ) | — | (4,906 | ) | — | |||||||||||||||||||
| Lease termination charges | — | 535 | — | 535 | |||||||||||||||||||||
Adjusted net income from continuing operations(1) | $ | 10,301 | $ | 17,814 | (42.2) | % | $ | 14,696 | $ | 33,719 | (56.4) | % | |||||||||||||
DILUTED INCOME PER SHARE FROM CONTINUING OPERATIONS RECONCILIATION:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||||
| Reported income per share from continuing operations | $ | 0.43 | $ | 0.77 | (44.2) | % | $ | 0.80 | $ | 1.46 | (45.2) | % | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Non-Cash asset impairments charges | 0.06 | — | 0.06 | — | |||||||||||||||||||||
| Mortgage debt refinance charges | 0.01 | — | 0.01 | — | |||||||||||||||||||||
| Gain on dealership disposition | (0.04 | ) | — | (0.02 | ) | — | |||||||||||||||||||
| Gain on debt redemption | (0.02 | ) | — | (0.21 | ) | — | |||||||||||||||||||
| Lease termination charges | — | 0.02 | — | 0.02 | |||||||||||||||||||||
Adjusted diluted income per share from continuing operations (1) | 0.44 | 0.79 | (44.3) | % | 0.64 | 1.48 | (56.8) | % | |||||||||||||||||
| (1) | Adjusted net income from continuing operations and adjusted diluted earnings per share from continuing operations means net income from continuing operations or diluted earnings per share from continuing operations, as the case may be, plus the adjustments noted above. We use adjusted net income from continuing operations and adjusted diluted earnings per share from continuing operations in our evaluation of the performance of the company, as we believe that they provide additional information regarding the performance of our operations. We believe the presentation of these measures is relevant and useful to investors because they improve period-to-period comparability. Neither of these measures is a measure of financial performance under GAAP. Accordingly, they should not be considered as substitutes for net income from continuing operations or diluted earnings per share from continuing operations prepared in accordance with GAAP. Although we find these non-GAAP results useful in evaluating the performance of our business, our reliance on these measures is limited because the adjustments often have a material impact on our net income from continuing operations and diluted earnings per share from continuing operations calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations. |