Exhibit 99.1
FOR IMMEDIATE RELEASE
GROUP 1 AUTOMOTIVE REPORTS HIGHER EARNINGS DRIVEN BY 17 PERCENT REVENUE INCREASE
Used Vehicle and Parts and Service Sales Exceptionally Strong
HOUSTON, Oct. 26, 2010 — Group 1 Automotive, Inc. (NYSE: GPI),a Fortune 500 automotive retailer, today reported a third-quarter adjusted net income increase of 14.6 percent to $19.3 million, or $0.84 per diluted share, for the period ended Sept. 30, 2010. This compares to adjusted net income of $16.8 million, or $0.71 per diluted share, for the third quarter of 2009. Including the $0.3 million net after-tax adjustments for non-cash asset impairment charges and a gain on a real estate divestiture shown in the attached reconciliation table, net income for the third quarter of 2010 was $19.0 million, or $0.83 per diluted share.
Total company revenues for the quarter were up 17.2 percent driven by new vehicle sales increasing 12.9 percent, used vehicle sales growing 34.0 percent, finance and insurance sales improving 18.1 percent, and parts and service revenues expanding 7.1 percent.
“We are pleased with our sales performance in the third quarter. Our vehicle sales increase outpaced the market with new vehicle sales facing a challenging comparison versus last year’s ‘Cash for Clunkers’ program period,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “The dramatic revenue increases helped leverage the cost reductions and operating efficiencies Group 1 executed over the past two years. These results continue to demonstrate the leverage Group 1’s business model can deliver as sales volumes and revenues rebound.”
Third-Quarter Operating Highlights
| • | Same-store new vehicle revenues increased 9.4 percent, outpacing the prior-year period when the ‘Cash for Clunkers’ incentive program inflated sales results. | |
| • | Same-store total used vehicle revenues were 29.0 percent higher, reflecting 29.2 percent and 28.1 percent increases in used retail and wholesale revenues, respectively. | |
| • | Same-store used vehicle gross profit was 9.8 percent higher, reflecting the 13.9 percent increase in profit earned on retailed units. | |
| • | Same-store parts and service gross profit improved 8.1 percent on 7.3 percent higher revenues, reflecting Group 1’s continued focus on this segment. | |
| • | Finance and insurance same-store gross profit expanded $83, to $1,037, per retail unit. | |
| • | Selling, general and administrative expenses as a percent of gross profit continued to show sequential improvement, down 140 basis points, to 76.6 percent from the prior quarter on a consolidated basis. |
“In addition to the great job our team did in the quarter on new and used vehicle sales, I am particularly proud of the outstanding results in parts and service, where same-store revenues increased 7.3 percent,” Hesterberg added. “The work we have done to improve processes surrounding customer service, parts inventory management and our collision centers, is beginning to deliver positive results.”
Balance Sheet
New vehicle inventory increased $52.8 million from the prior quarter to $537.6 million as of Sept. 30. The company ended the quarter with immediately available funds of $154.1 million and available liquidity of $291.6 million.
Group 1 Automotive, Inc.
Corporate Development Update
During the third quarter, Group 1 added a Lincoln franchise with estimated annual revenues of $3.0 million to an existing Ford store in West Texas.
Including the Lincoln franchise, Group 1 has acquired 10 franchises this year with total estimated annual revenues of $256.2 million.
Share Repurchases
During the third quarter, Group 1 repurchased 294,098 shares of its common stock at an average price of $25.56 under a board-authorized $25.0 million share repurchase program. At the end of the third quarter, $17.5 million remained under the authorization.
Third-Quarter Earnings Conference Call
Group 1’s senior management will host a conference call today at 10 a.m. ET to discuss the third-quarter financial results and the company’s outlook and strategy.
The conference call will be simulcast live on the Internet atwww.group1auto.com, then click on ‘Investor Relations’ and then ‘Events’ or through this link:http://www.group1corp.com/news/events.aspx. A replay will be available for 30 days.
The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:
Domestic:877.795.3649
International:719.325.4753
Participant Passcode:3452864
International:719.325.4753
Participant Passcode:3452864
A telephonic replay will be available following the call through Nov. 2 by dialing:
Domestic:888.203.1112
International:719.457.0820
Replay Passcode:3452864
International:719.457.0820
Replay Passcode:3452864
About Group 1 Automotive, Inc.
Group 1 owns and operates 101 automotive dealerships, 137 franchises, and 25 collision service centers in the United States and the United Kingdom that offer 32 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts.
Group 1 Automotive can be reached on the Internet atwww.group1auto.com.
This press release contains “forward-looking statements,” which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “may” or “will” and similar expressions. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. 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, whether as a result of new information, future developments or otherwise, except as may be required by law.
Group 1 Automotive, Inc.
SOURCE: Group 1 Automotive, Inc.
Investor contacts:
Kim Paper Canning, Manager, Investor Relations | Group 1 Automotive Inc. | 713-647-5741 | kpaper@group1auto.com
Media contacts:
Pete DeLongchamps, Vice President, Manufacturer Relations and Public Affairs | Group 1 Automotive Inc. | 713-647-5770 | pdelongchamps@group1auto.com
or
Clint Woods, Pierpont Communications, Inc. | 713-627-2223 | cwoods@piercom.com
FINANCIAL TABLES 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 September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||
| New vehicle retail sales | $ | 822,121 | $ | 728,089 | 12.9 | % | $ | 2,254,093 | $ | 1,883,973 | 19.6 | % | ||||||||||||
| Used vehicle retail sales | 340,625 | 254,716 | 33.7 | 960,376 | 729,345 | 31.7 | ||||||||||||||||||
| Used vehicle wholesale sales | 58,463 | 43,151 | 35.5 | 156,653 | 112,536 | 39.2 | ||||||||||||||||||
| Parts and service | 196,264 | 183,254 | 7.1 | 575,762 | 547,224 | 5.2 | ||||||||||||||||||
| Finance and insurance | 44,282 | 37,509 | 18.1 | 124,533 | 102,213 | 21.8 | ||||||||||||||||||
| Total revenues | 1,461,755 | 1,246,719 | 17.2 | 4,071,417 | 3,375,291 | 20.6 | ||||||||||||||||||
COST OF SALES: | ||||||||||||||||||||||||
| New vehicle retail sales | 775,046 | 679,470 | 14.1 | 2,122,533 | 1,770,900 | 19.9 | ||||||||||||||||||
| Used vehicle retail sales | 310,055 | 228,445 | 35.7 | 870,823 | 652,640 | 33.4 | ||||||||||||||||||
| Used vehicle wholesale sales | 58,158 | 41,872 | 38.9 | 153,565 | 109,205 | 40.6 | ||||||||||||||||||
| Parts and service | 89,657 | 84,911 | 5.6 | 264,484 | 256,756 | 3.0 | ||||||||||||||||||
| Total cost of sales | 1,232,916 | 1,034,698 | 19.2 | 3,411,405 | 2,789,501 | 22.3 | ||||||||||||||||||
GROSS PROFIT | 228,839 | 212,021 | 7.9 | 660,012 | 585,790 | 12.7 | ||||||||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 173,925 | 162,466 | 7.1 | 522,796 | 466,813 | 12.0 | ||||||||||||||||||
| DEPRECIATION AND AMORTIZATION EXPENSE | 6,772 | 6,666 | 1.6 | 19,936 | 19,541 | 2.0 | ||||||||||||||||||
| ASSET IMPAIRMENTS | 1,639 | 702 | 133.5 | 3,121 | 2,837 | 10.0 | ||||||||||||||||||
OPERATING INCOME | 46,503 | 42,187 | 10.2 | 114,159 | 96,599 | 18.2 | ||||||||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||||||
| Floorplan interest expense | (9,021 | ) | (7,523 | ) | 19.9 | (25,220 | ) | (24,342 | ) | 3.6 | ||||||||||||||
| Other interest expense, net | (6,894 | ) | (7,318 | ) | (5.8 | ) | (20,265 | ) | (21,857 | ) | (7.3 | ) | ||||||||||||
| Gain (loss) on redemption of long-term debt | — | 598 | (100.0 | ) | (3,872 | ) | 8,211 | (147.2 | ) | |||||||||||||||
| Other expense, net | — | (4 | ) | (100.0 | ) | — | (6 | ) | (100.0 | ) | ||||||||||||||
INCOME BEFORE INCOME TAXES | 30,588 | 27,940 | 9.5 | 64,802 | 58,605 | 10.6 | ||||||||||||||||||
| PROVISION FOR INCOME TAXES | (11,603 | ) | (9,600 | ) | 20.9 | (25,067 | ) | (21,808 | ) | 14.9 | ||||||||||||||
NET INCOME | $ | 18,985 | $ | 18,340 | 3.5 | % | $ | 39,735 | $ | 36,797 | 8.0 | % | ||||||||||||
DILUTED INCOME PER SHARE | $ | 0.83 | $ | 0.78 | 6.4 | % | $ | 1.70 | $ | 1.58 | 7.6 | % | ||||||||||||
| Weighted average diluted shares outstanding | 22,926 | 23,503 | (2.5) | % | 23,414 | 23,240 | 0.7 | % | ||||||||||||||||
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
Consolidated Balance Sheets
(Dollars in thousands)
| September 30, | December 31, | |||||||||||
| 2010 | 2009 | % Change | ||||||||||
| (Unaudited) | ||||||||||||
ASSETS: | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 96,162 | $ | 13,221 | 627.3 | % | ||||||
| Contracts in transit and vehicle receivables, net | 92,649 | 86,500 | 7.1 | |||||||||
| Accounts and notes receivable, net | 66,492 | 62,496 | 6.4 | |||||||||
| Inventories | 757,201 | 596,743 | 26.9 | |||||||||
| Deferred income taxes | 15,340 | 14,653 | 4.7 | |||||||||
| Prepaid expenses and other current assets | 37,520 | 48,425 | (22.5 | ) | ||||||||
| Total current assets | 1,065,364 | 822,038 | 29.6 | |||||||||
| PROPERTY AND EQUIPMENT, net | 458,303 | 475,828 | (3.7 | ) | ||||||||
| GOODWILL AND INTANGIBLE FRANCHISE RIGHTS | 667,387 | 658,281 | 1.4 | |||||||||
| OTHER ASSETS | 10,458 | 13,267 | (21.2 | ) | ||||||||
| Total assets | $ | 2,201,512 | $ | 1,969,414 | 11.8 | % | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Floorplan notes payable — credit facility | $ | 656,701 | $ | 491,892 | 33.5 | % | ||||||
| Offset account related to floorplan notes payable — credit facility | (57,963 | ) | (71,573 | ) | (19.0 | ) | ||||||
| Floorplan notes payable — manufacturer affiliates | 103,922 | 115,180 | (9.8 | ) | ||||||||
| Current maturities of long-term debt | 14,304 | 14,355 | (0.4 | ) | ||||||||
| Current liabilities from interest rate risk management activities | 4,357 | 10,412 | (58.2 | ) | ||||||||
| Accounts payable | 84,864 | 72,276 | 17.4 | |||||||||
| Accrued expenses | 83,459 | 86,271 | (3.3 | ) | ||||||||
| Total current liabilities | 889,644 | 718,813 | 23.8 | |||||||||
| 2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $182,753 at September 30, 2010 and December 31, 2009) | 136,554 | 131,932 | 3.5 | |||||||||
| 3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of $115,000 at September 30, 2010) | 73,645 | — | 100.0 | |||||||||
| 8.25% SENIOR SUBORDINATED NOTES | — | 73,267 | (100.0 | ) | ||||||||
| MORTGAGE FACILITY, net of current maturities | 148,469 | 182,216 | (18.5 | ) | ||||||||
| OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, net of current maturities | 34,860 | 19,040 | 83.1 | |||||||||
| CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities | 38,115 | 37,686 | 1.1 | |||||||||
| DEFERRED INCOME TAXES | 56,376 | 33,932 | 66.1 | |||||||||
| LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES | 19,960 | 20,151 | (0.9 | ) | ||||||||
| OTHER LIABILITIES | 29,585 | 26,633 | 11.1 | |||||||||
| DEFERRED REVENUES | 3,829 | 5,588 | (31.5 | ) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||||||
| Common stock | 263 | 262 | 0.4 | |||||||||
| Additional paid-in capital | 371,112 | 346,055 | 7.2 | |||||||||
| Retained earnings | 511,667 | 471,932 | 8.4 | |||||||||
| Accumulated other comprehensive loss | (22,162 | ) | (26,256 | ) | (15.6 | ) | ||||||
| Treasury stock | (90,405 | ) | (71,837 | ) | 25.8 | |||||||
| Total stockholders’ equity | 770,475 | 720,156 | 7.0 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,201,512 | $ | 1,969,414 | 11.8 | % | ||||||
KEY DEBT COVENANT METRICS: | ||||||||||||
| Senior secured leverage ratio (must be less than 2.75) | 1.24 | 1.31 | ||||||||||
| Total leverage ratio (must be less than 4.50) | 3.61 | 3.29 | ||||||||||
| Fixed charge coverage ratio (must be greater than 1.25) | 1.70 | 1.76 | ||||||||||
| Current ratio (must be greater than 1.15) | 1.35 | 1.34 | ||||||||||
Group 1 Automotive, Inc.
Consolidated Statements of Adjusted Cash Flows from Operating Activities
(Unaudited, In thousands)
Consolidated Statements of Adjusted Cash Flows from Operating Activities
(Unaudited, In thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
| Net income | $ | 18,985 | $ | 18,340 | 3.5 | % | $ | 39,735 | $ | 36,797 | 8.0 | % | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||||||
| Asset Impairments | 1,639 | 702 | 133.5 | 3,121 | 2,837 | 10.0 | ||||||||||||||||||
| Depreciation and amortization | 6,772 | 6,666 | 1.6 | 19,936 | 19,541 | 2.0 | ||||||||||||||||||
| Deferred income taxes | 10,062 | 8,177 | 23.1 | 22,224 | 23,078 | (3.7 | ) | |||||||||||||||||
| (Gain) loss on redemption of long-term debt | — | (598 | ) | (100.0 | ) | 3,872 | (8,211 | ) | 147.2 | |||||||||||||||
| (Gain) loss on sale of assets | (1,282 | ) | 842 | (252.3 | ) | 3,170 | (6 | ) | 52,933.3 | |||||||||||||||
| Stock-based compensation | 2,329 | 1,940 | 20.1 | 7,505 | 7,367 | 1.9 | ||||||||||||||||||
| Amortization of debt discount and issue costs | 2,379 | 1,270 | 87.3 | 6,336 | 5,413 | 17.1 | ||||||||||||||||||
| Other | 416 | (309 | ) | 234.6 | 854 | (859 | ) | 199.4 | ||||||||||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | ||||||||||||||||||||||||
| Inventories | (59,922 | ) | 69,500 | (186.2 | ) | (154,299 | ) | 373,146 | (141.4 | ) | ||||||||||||||
| Floorplan notes payable — credit facility | 52,865 | (83,806 | ) | 163.1 | 164,809 | (364,109 | ) | 145.3 | ||||||||||||||||
| Floorplan notes payable — manufacturer affiliates | 3,029 | 4,265 | (29.0 | ) | (9,548 | ) | (39,454 | ) | (75.8 | ) | ||||||||||||||
| Contracts-in-transit and vehicle receivables | 18,600 | 11,762 | 58.1 | (6,181 | ) | 35,909 | (117.2 | ) | ||||||||||||||||
| Accounts and notes receivable | 1,381 | 6,997 | (80.3 | ) | (4,938 | ) | 20,865 | (123.7 | ) | |||||||||||||||
| Prepaid expenses and other assets | 3,294 | 7,668 | (57.0 | ) | 5,088 | 7,304 | (30.3 | ) | ||||||||||||||||
| Deferred revenues | (816 | ) | (913 | ) | (10.6 | ) | (1,759 | ) | (3,477 | ) | (49.4 | ) | ||||||||||||
| Accounts payable and accrued expenses | (5,175 | ) | 2,251 | (329.9 | ) | 10,524 | (15,478 | ) | 168.0 | |||||||||||||||
| Adjusted net cash provided by operating activities | $ | 54,556 | $ | 54,754 | (0.4 | )% | $ | 110,449 | $ | 100,663 | 9.7 | % | ||||||||||||
Group 1 Automotive, Inc.
Additional Information — Consolidated
(Unaudited)
Additional Information — Consolidated
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||
| NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: | ||||||||||||||||||
Region | Geographic Market | |||||||||||||||||
| Eastern | Massachusetts | 14.6 | % | 16.6 | % | 14.8 | % | 15.2 | % | |||||||||
| New Jersey | 6.1 | 6.2 | 6.5 | 6.6 | ||||||||||||||
| Georgia | 4.1 | 3.5 | 3.9 | 3.6 | ||||||||||||||
| New Hampshire | 4.0 | 4.6 | 4.2 | 4.1 | ||||||||||||||
| New York | 3.7 | 3.5 | 3.8 | 4.1 | ||||||||||||||
| Louisiana | 3.3 | 3.1 | 3.1 | 3.2 | ||||||||||||||
| Mississippi | 1.7 | 1.9 | 1.7 | 1.8 | ||||||||||||||
| South Carolina | 1.6 | 0.3 | 1.1 | 0.3 | ||||||||||||||
| Alabama | 1.2 | 0.6 | 1.3 | 0.6 | ||||||||||||||
| Florida | 0.8 | 1.3 | 1.4 | 1.6 | ||||||||||||||
| Maryland | 0.8 | 0.9 | 0.8 | 0.9 | ||||||||||||||
| 41.9 | 42.5 | 42.6 | 42.0 | |||||||||||||||
| Central | Texas | 30.9 | 31.6 | 30.8 | 32.1 | |||||||||||||
| Oklahoma | 7.7 | 8.2 | 7.9 | 8.4 | ||||||||||||||
| Kansas | 0.8 | 1.2 | 0.9 | 1.2 | ||||||||||||||
| 39.4 | 41.0 | 39.6 | 41.7 | |||||||||||||||
| Western | California | 14.0 | 14.2 | 13.4 | 14.1 | |||||||||||||
| International | United Kingdom | 4.7 | 2.3 | 4.4 | 2.2 | |||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| NEW VEHICLE UNIT SALES BRAND MIX: | ||||||||||||||||||
| Toyota/Scion/Lexus | 36.5 | % | 38.4 | % | 35.5 | % | 36.2 | % | ||||||||||
| Nissan/Infiniti | 14.1 | 14.1 | 14.6 | 12.9 | ||||||||||||||
| BMW/Mini | 11.9 | 9.2 | 11.3 | 9.5 | ||||||||||||||
| Honda/Acura | 11.8 | 12.2 | 12.2 | 13.0 | ||||||||||||||
| Ford | 7.2 | 7.4 | 8.0 | 7.8 | ||||||||||||||
| Mercedes-Benz | 5.7 | 4.8 | 5.6 | 5.4 | ||||||||||||||
| GM | 3.9 | 3.4 | 4.0 | 3.7 | ||||||||||||||
| Chrysler | 3.0 | 4.4 | 2.9 | 5.7 | ||||||||||||||
| Other | 5.9 | 6.1 | 5.9 | 5.8 | ||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| NEW VEHICLE UNIT SALES OTHER MIX: | ||||||||||||||||||
| Import | 58.8 | % | 62.4 | % | 58.3 | % | 58.5 | % | ||||||||||
| Luxury | 27.1 | 22.5 | 27.0 | 24.4 | ||||||||||||||
| Domestic | 14.1 | 15.1 | 14.7 | 17.1 | ||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| Car | 59.4 | % | 62.2 | % | 58.8 | % | 59.1 | % | ||||||||||
| Truck | 40.6 | 37.8 | 41.2 | 40.9 | ||||||||||||||
| 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 September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||
| New vehicle retail sales | $ | 822,121 | $ | 728,089 | 12.9 | % | $ | 2,254,093 | $ | 1,883,973 | 19.6 | % | ||||||||||||
| Used vehicle retail sales | 340,625 | 254,716 | 33.7 | 960,376 | 729,345 | 31.7 | ||||||||||||||||||
| Used vehicle wholesale sales | 58,463 | 43,151 | 35.5 | 156,653 | 112,536 | 39.2 | ||||||||||||||||||
| Total used | 399,088 | 297,867 | 34.0 | 1,117,029 | 841,881 | 32.7 | ||||||||||||||||||
| Parts and service | 196,264 | 183,254 | 7.1 | 575,762 | 547,224 | 5.2 | ||||||||||||||||||
| Finance and insurance | 44,282 | 37,509 | 18.1 | 124,533 | 102,213 | 21.8 | ||||||||||||||||||
| Total | $ | 1,461,755 | $ | 1,246,719 | 17.2 | % | $ | 4,071,417 | $ | 3,375,291 | 20.6 | % | ||||||||||||
GROSS MARGIN: | ||||||||||||||||||||||||
| New vehicle retail sales | 5.7 | % | 6.7 | % | 5.8 | % | 6.0 | % | ||||||||||||||||
| Used vehicle retail sales | 9.0 | 10.3 | 9.3 | 10.5 | ||||||||||||||||||||
| Used vehicle wholesale sales | 0.5 | 3.0 | 2.0 | 3.0 | ||||||||||||||||||||
| Total used | 7.7 | 9.2 | 8.3 | 9.5 | ||||||||||||||||||||
| Parts and service | 54.3 | 53.7 | 54.1 | 53.1 | ||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||||||||||
| Total | 15.7 | % | 17.0 | % | 16.2 | % | 17.4 | % | ||||||||||||||||
GROSS PROFIT: | ||||||||||||||||||||||||
| New vehicle retail sales | $ | 47,075 | $ | 48,619 | (3.2 | )% | $ | 131,560 | $ | 113,073 | 16.3 | % | ||||||||||||
| Used vehicle retail sales | 30,570 | 26,271 | 16.4 | 89,553 | 76,705 | 16.7 | ||||||||||||||||||
| Used vehicle wholesale sales | 305 | 1,279 | (76.2 | ) | 3,088 | 3,331 | (7.3 | ) | ||||||||||||||||
| Total used | 30,875 | 27,550 | 12.1 | 92,641 | 80,036 | 15.7 | ||||||||||||||||||
| Parts and service | 106,607 | 98,343 | 8.4 | 311,278 | 290,468 | 7.2 | ||||||||||||||||||
| Finance and insurance | 44,282 | 37,509 | 18.1 | 124,533 | 102,213 | 21.8 | ||||||||||||||||||
| Total | $ | 228,839 | $ | 212,021 | 7.9 | % | $ | 660,012 | $ | 585,790 | 12.7 | % | ||||||||||||
UNITS SOLD: | ||||||||||||||||||||||||
| Retail new vehicles sold | 26,396 | 25,057 | 5.3 | % | 72,128 | 62,942 | 14.6 | % | ||||||||||||||||
| Retail used vehicles sold | 17,601 | 14,175 | 24.2 | 50,230 | 41,181 | 22.0 | ||||||||||||||||||
| Wholesale used vehicles sold | 9,308 | 8,367 | 11.2 | 24,716 | 21,222 | 16.5 | ||||||||||||||||||
| Total used | 26,909 | 22,542 | 19.4 | % | 74,946 | 62,403 | 20.1 | % | ||||||||||||||||
GROSS PROFIT PER UNIT SOLD: | ||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,783 | $ | 1,940 | (8.1 | )% | $ | 1,824 | $ | 1,796 | 1.6 | % | ||||||||||||
| Used vehicle retail sales | 1,737 | 1,853 | (6.3 | ) | 1,783 | 1,863 | (4.3 | ) | ||||||||||||||||
| Used vehicle wholesale sales | 33 | 153 | (78.4 | ) | 125 | 157 | (20.4 | ) | ||||||||||||||||
| Total used | 1,147 | 1,222 | (6.1 | ) | 1,236 | 1,283 | (3.7 | ) | ||||||||||||||||
| Finance and insurance (per retail unit) | $ | 1,006 | $ | 956 | 5.2 | % | $ | 1,018 | $ | 982 | 3.7 | % | ||||||||||||
OTHER(1): | ||||||||||||||||||||||||
| SG&A expenses | $ | 175,225 | $ | 162,466 | 7.9 | % | $ | 518,481 | $ | 467,516 | 10.9 | % | ||||||||||||
| SG&A as % revenues | 12.0 | % | 13.0 | % | 12.7 | % | 13.9 | % | ||||||||||||||||
| SG&A as % gross profit | 76.6 | % | 76.6 | % | 78.6 | % | 79.8 | % | ||||||||||||||||
| Operating margin | 3.2 | % | 3.4 | % | 3.0 | % | 2.9 | % | ||||||||||||||||
| Pretax margin | 2.1 | % | 2.2 | % | 1.9 | % | 1.6 | % | ||||||||||||||||
FLOORPLAN EXPENSE: | ||||||||||||||||||||||||
| Floorplan interest | $ | (9,021 | ) | $ | (7,523 | ) | 19.9 | % | $ | (25,220 | ) | $ | (24,342 | ) | 3.6 | % | ||||||||
| Floorplan assistance | 6,512 | 5,771 | 12.8 | 17,836 | 15,030 | 18.7 | ||||||||||||||||||
| Net floorplan expense | $ | (2,509 | ) | $ | (1,752 | ) | 43.2 | % | $ | (7,384 | ) | $ | (9,312 | ) | (20.7 | )% | ||||||||
| (1) | These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments. |
Group 1 Automotive, Inc.
Additional Information — Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
Additional Information — Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||
| New vehicle retail sales | $ | 783,782 | $ | 716,630 | 9.4 | % | $ | 2,170,481 | $ | 1,846,689 | 17.5 | % | ||||||||||||
| Used vehicle retail sales | 321,260 | 248,718 | 29.2 | 914,386 | 710,784 | 28.6 | ||||||||||||||||||
| Used vehicle wholesale sales | 54,092 | 42,213 | 28.1 | 147,124 | 109,691 | 34.1 | ||||||||||||||||||
| Total used | 375,352 | 290,931 | 29.0 | 1,061,510 | 820,475 | 29.4 | ||||||||||||||||||
| Parts and service | 190,157 | 177,285 | 7.3 | 560,192 | 531,810 | 5.3 | ||||||||||||||||||
| Finance and insurance | 43,337 | 36,661 | 18.2 | 122,408 | 99,983 | 22.4 | ||||||||||||||||||
| Total | $ | 1,392,628 | $ | 1,221,507 | 14.0 | % | $ | 3,914,591 | $ | 3,298,957 | 18.7 | % | ||||||||||||
GROSS MARGIN: | ||||||||||||||||||||||||
| New vehicle retail sales | 5.7 | % | 6.7 | % | 5.8 | % | 6.0 | % | ||||||||||||||||
| Used vehicle retail sales | 9.1 | 10.3 | 9.4 | 10.5 | ||||||||||||||||||||
| Used vehicle wholesale sales | 0.7 | 3.1 | 2.2 | 3.1 | ||||||||||||||||||||
| Total used | 7.9 | 9.3 | 8.4 | 9.5 | ||||||||||||||||||||
| Parts and service | 54.3 | 53.9 | 54.1 | 53.2 | ||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||||||||||
| Total | 15.9 | % | 17.0 | % | 16.4 | % | 17.4 | % | ||||||||||||||||
GROSS PROFIT: | ||||||||||||||||||||||||
| New vehicle retail sales | $ | 44,514 | $ | 47,959 | (7.2) | % | $ | 125,967 | $ | 111,517 | 13.0 | % | ||||||||||||
| Used vehicle retail sales | 29,217 | 25,657 | 13.9 | 86,344 | 74,679 | 15.6 | ||||||||||||||||||
| Used vehicle wholesale sales | 401 | 1,307 | (69.3 | ) | 3,298 | 3,364 | (2.0 | ) | ||||||||||||||||
| Total used | 29,618 | 26,964 | 9.8 | 89,642 | 78,043 | 14.9 | ||||||||||||||||||
| Parts and service | 103,278 | 95,515 | 8.1 | 302,920 | 282,887 | 7.1 | ||||||||||||||||||
| Finance and insurance | 43,337 | 36,661 | 18.2 | 122,408 | 99,983 | 22.4 | ||||||||||||||||||
| Total | $ | 220,747 | $ | 207,099 | 6.6 | % | $ | 640,937 | $ | 572,430 | 12.0 | % | ||||||||||||
UNITS SOLD: | ||||||||||||||||||||||||
| Retail new vehicles sold | 25,155 | 24,665 | 2.0 | % | 69,411 | 61,680 | 12.5 | % | ||||||||||||||||
| Retail used vehicles sold | 16,641 | 13,774 | 20.8 | 48,096 | 39,955 | 20.4 | ||||||||||||||||||
| Wholesale used vehicles sold | 8,790 | 8,123 | 8.2 | 23,626 | 20,661 | 14.4 | ||||||||||||||||||
| Total used | 25,431 | 21,897 | 16.1 | % | 71,722 | 60,616 | 18.3 | % | ||||||||||||||||
GROSS PROFIT PER UNIT SOLD: | ||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,770 | $ | 1,944 | (9.0) | % | $ | 1,815 | $ | 1,808 | 0.4 | % | ||||||||||||
| Used vehicle retail sales | 1,756 | 1,863 | (5.7 | ) | 1,795 | 1,869 | (4.0 | ) | ||||||||||||||||
| Used vehicle wholesale sales | 46 | 161 | (71.4 | ) | 140 | 163 | (14.1 | ) | ||||||||||||||||
| Total used | 1,165 | 1,231 | (5.4 | ) | 1,250 | 1,287 | (2.9 | ) | ||||||||||||||||
| Finance and insurance (per retail unit) | $ | 1,037 | $ | 954 | 8.7 | % | $ | 1,042 | $ | 984 | 5.9 | % | ||||||||||||
OTHER: | ||||||||||||||||||||||||
| SG&A expenses | $ | 167,571 | $ | 157,662 | 6.3 | % | $ | 500,160 | $ | 453,650 | 10.3 | % | ||||||||||||
| SG&A as % revenues | 12.0 | % | 12.9 | % | 12.8 | % | 13.8 | % | ||||||||||||||||
| SG&A as % gross profit | 75.9 | % | 76.1 | % | 78.0 | % | 79.2 | % | ||||||||||||||||
| Operating margin | 3.2 | % | 3.5 | % | 3.1 | % | 3.0 | % | ||||||||||||||||
FLOORPLAN EXPENSE: | ||||||||||||||||||||||||
| Floorplan interest | $ | (8,851 | ) | $ | (7,458 | ) | 18.7 | % | $ | (24,785 | ) | $ | (24,093 | ) | 2.9 | % | ||||||||
| Floorplan assistance | 6,394 | 5,654 | 13.1 | 17,636 | 14,622 | 20.6 | ||||||||||||||||||
| Net floorplan expense | $ | (2,457 | ) | $ | (1,804 | ) | 36.2 | % | $ | (7,149 | ) | $ | (9,471 | ) | (24.5) | % | ||||||||
| (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)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
NET INCOME RECONCILIATION: | ||||||||||||||||||||||||
| As reported | $ | 18,985 | $ | 18,340 | 3.5 | % | $ | 39,735 | $ | 36,797 | 8.0 | % | ||||||||||||
| After-tax Adjustments: | ||||||||||||||||||||||||
Non-Cash asset impairment charges(2) | 1,033 | 461 | 1,983 | 1,726 | ||||||||||||||||||||
Mortgage debt refinance charges(3) | — | — | — | 331 | ||||||||||||||||||||
Loss (gain) on dealership dispositions(4) | — | — | 3,698 | (451 | ) | |||||||||||||||||||
Loss (gain) on debt redemption(5) | — | (393 | ) | 2,458 | (5,299 | ) | ||||||||||||||||||
Severance costs related to UK-dealership acquisitions(6) | — | — | 405 | — | ||||||||||||||||||||
| Income tax benefit related to tax elections for prior periods | — | (1,604 | ) | — | (1,604 | ) | ||||||||||||||||||
Gain on sale of real estate(7) | (761 | ) | — | (761 | ) | — | ||||||||||||||||||
Adjusted net income(1) | $ | 19,257 | $ | 16,804 | 14.6 | % | $ | 47,518 | $ | 31,500 | 50.9 | % | ||||||||||||
DILUTED INCOME PER SHARE RECONCILIATION(10): | ||||||||||||||||||||||||
| As reported | $ | 0.83 | $ | 0.78 | 6.4 | % | $ | 1.70 | $ | 1.58 | 7.6 | % | ||||||||||||
| After-tax Adjustments: | ||||||||||||||||||||||||
| Non-Cash asset impairment charges | 0.04 | 0.02 | 0.09 | 0.08 | ||||||||||||||||||||
| Mortgage debt refinance charges | — | — | — | 0.01 | ||||||||||||||||||||
| Loss (gain) on dealership disposition | — | — | 0.15 | (0.02 | ) | |||||||||||||||||||
| Loss (gain) on debt redemption | — | (0.02 | ) | 0.10 | (0.22 | ) | ||||||||||||||||||
| Severance costs related to UK-dealership acquisitions | — | — | 0.02 | — | ||||||||||||||||||||
| Income tax benefit related to tax elections for prior periods | — | (0.07 | ) | — | (0.07 | ) | ||||||||||||||||||
| Gain on sale of real estate | (0.03 | ) | — | (0.03 | ) | — | ||||||||||||||||||
Adjusted diluted income per share(1) | $ | 0.84 | $ | 0.71 | 18.3 | % | $ | 2.03 | $ | 1.36 | 49.3 | % | ||||||||||||
SG&A RECONCILIATION: | ||||||||||||||||||||||||
| As reported | $ | 173,925 | $ | 162,466 | 7.1 | % | $ | 522,796 | $ | 466,813 | 12.0 | % | ||||||||||||
| Pre-tax Adjustments: | ||||||||||||||||||||||||
| Gain (loss) on dealership dispositions | — | — | (5,053 | ) | 703 | |||||||||||||||||||
| Severance costs related to UK-dealership acquisitions | — | — | (562 | ) | — | |||||||||||||||||||
| Gain on sale of real estate | 1,300 | — | 1,300 | — | ||||||||||||||||||||
Adjusted SG&A(1) | $ | 175,225 | $ | 162,466 | 7.9 | % | $ | 518,481 | $ | 467,516 | 10.9 | % | ||||||||||||
SG&A AS % REVENUES: | ||||||||||||||||||||||||
| Unadjusted | 11.9 | % | 13.0 | % | 12.8 | % | 13.8 | % | ||||||||||||||||
Adjusted(1) | 12.0 | % | 13.0 | % | 12.7 | % | 13.9 | % | ||||||||||||||||
SG&A AS % OF GROSS PROFIT: | ||||||||||||||||||||||||
| Unadjusted | 76.0 | % | 76.6 | % | 79.2 | % | 79.7 | % | ||||||||||||||||
Adjusted(1) | 76.6 | % | 76.6 | % | 78.6 | % | 79.8 | % | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
OPERATING MARGIN: | ||||||||||||||||||||||||
| Unadjusted | 3.2 | % | 3.4 | % | 2.8 | % | 2.9 | % | ||||||||||||||||
Adjusted(1), (8) | 3.2 | % | 3.4 | % | 3.0 | % | 2.9 | % | ||||||||||||||||
PRETAX MARGIN: | ||||||||||||||||||||||||
| Unadjusted | 2.1 | % | 2.2 | % | 1.6 | % | 1.7 | % | ||||||||||||||||
Adjusted(1), (9) | 2.1 | % | 2.2 | % | 1.9 | % | 1.6 | % | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATION: | ||||||||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 1,691 | $ | 138,560 | (98.8) | % | $ | (54,360 | ) | $ | 464,772 | (111.7) | % | |||||||||||
| Change in floorplan notes payable-credit facility, excluding floorplan offset account | 52,865 | (83,806 | ) | 164,809 | (364,109 | ) | ||||||||||||||||||
Adjusted net cash provided by operating activities(1) | $ | 54,556 | $ | 54,754 | (0.4) | % | $ | 110,449 | $ | 100,663 | 9.7 | % | ||||||||||||
| (1) | We believe that these adjusted financial measures are relevant and useful to investors because they provide additional information regarding the performance of our operations and improve period-to-period comparability. These measures are not measures of financial performance under GAAP. Accordingly, they should not be considered as substitutes for their unadjusted counterparts, which are 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 financial statements calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations. | |
| (2) | Adjustments are net of tax benefit of $606 and $1,138 for the three and nine months ended September 30, 2010, and $241 and $1,111 for the three and nine months ended September 30, 2009, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment. | |
| (3) | Adjustment is net of a tax benefit of $203 for the nine months ended September 30, 2009, calculated utilizing the applicable federal and state tax rates for the adjustment. | |
| (4) | Adjustments are net of tax benefit of $1,355 for the nine months ended September 30, 2010 and tax provision of $252 for the nine months ended September 30, 2009, calculated utilizing the applicable federal and state tax rates for the adjustment. | |
| (5) | Adjustments are net of tax benefit of $1,414 for the nine months ended September 30, 2010 and tax provision of $205 and $3,446 for the three and nine months ended September 30, 2009, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment. | |
| (6) | Adjustment is net of a tax benefit of $157 for the nine months ended September 30, 2010, calculated utilizing the applicable UK corporate tax rate for the adjustment. | |
| (7) | Adjustment is net of a tax provision of $539 for the three and nine months ended September 30, 2010, calculated utilizing the applicable federal and state tax rate for the adjustment. | |
| (8) | Excludes the impact of non-cash asset impairment charges, gain/loss on dealership dispositions, severance costs related to UK-dealership acquisitions, and gain/loss on sale of real estate. | |
| (9) | Excludes the impact of non-cash asset impairment charges, mortgage debt refinance charges, gain/loss on dealership dispositions, gain/loss on debt redemption, severance costs related to UK-dealership acquisitions, and gain/loss on sale of real estate. | |
| (10) | The sum of the quarterly income per share amounts may not equal the year-to-date amount reported, as per share amounts are computed independently for each quarter and for the year-to-date, based on the respective weighted average common shares outstanding. |