Exhibit 99.1
FOR IMMEDIATE RELEASE
GROUP 1 AUTOMOTIVE’S STRONG NEW VEHICLE SALES DRIVE 25 PERCENT FOURTH-QUARTER REVENUE GROWTH
FULL-YEAR NEW VEHICLE SALES GROW 17 PERCENT — NEARLY TRIPLE THE INDUSTRY GROWTH RATE
HOUSTON, Feb. 10, 2011 — Group 1 Automotive, Inc. (NYSE: GPI),a Fortune 500 automotive retailer, today reported a 2010 fourth-quarter adjusted net income increase of 43.4 percent to $14.7 million, or $0.64 per diluted share, for the quarter ended Dec. 31. Full-year 2010 adjusted net income increased 49.0 percent to $62.2 million, or $2.67 per diluted share.
On a GAAP basis (see attached reconciliation for reported adjustments), including $4.1 million of net after-tax adjustments, fourth-quarter net income was $10.6 million, or $0.46 per diluted share, and, including $11.9 million of net after-tax adjustments, full-year net income was $50.3 million, or $2.16 per diluted share.
Total company revenues for the quarter increased 25.0 percent to $1.4 billion. The revenue growth was primarily driven by a 24.2 percent increase in retail unit sales. Finance and insurance revenues grew 29.3 percent on the higher retail units sold and increased penetration rates. In addition, the parts and service business continued to show exceptional growth, as revenues expanded 9.1 percent from the prior-year period.
Fourth-Quarter Operating Highlights
| • | New vehicle revenues increased 26.3 percent on a 25.4 percent increase in unit sales, outpacing industry retail unit sales growth of 16.4 percent. |
| • | Used vehicle revenues were 31.1 percent higher, reflecting 22.4 percent and 34.0 percent increases in used retail and wholesale units sold, respectively. |
| • | Gross profit increased 14.2 percent, to $217.0 million, on 12.3 percent and 19.3 percent growth in retail new and used vehicle profits, respectively. |
| • | Parts and service gross profit expanded 7.5 percent on the 9.1 percent higher revenues. |
| • | Finance and insurance gross profit per retail unit grew 4.1 percent to $1,075. |
| • | Selling, general and administrative (SG&A) expenses as a percent of gross profit improved 190 basis points, to 78.7 percent from the prior-year period. |
“We were very pleased with our strong sales performance to close 2010,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “Our sales increases in new and used vehicles were far above industry average, and our parts and service growth of more than 9 percent is the culmination of several years of focus and investment in this part of our business.”
Full-Year Highlights
| • | Total revenues grew 21.7 percent, to $5.5 billion. |
| • | New vehicle revenues increased 21.4 percent on 17.2 percent higher unit sales, nearly tripling the industry’s 6.3 percent retail sales increase. |
| • | Total used vehicle revenues grew 32.3 percent, as the company retailed 22.1 percent and wholesaled 20.6 percent more vehicles. |
| • | Parts and service revenues increased 6.2 percent, demonstrating Group 1’s focus on improving processes in this segment of the business. |
Group 1 Automotive, Inc.
| • | Total gross profit expanded 13.0 percent, to $877.0 million, reflecting profit growth in all segments. |
| • | Adjusted selling, general and administrative expenses grew at a slower pace than gross profit, resulting in a 140 basis-point improvement, to 78.6 percent. |
“In 2009, Group 1’s corporate priorities were cash preservation and cost reduction,” said Hesterberg. “We executed a cost reduction plan that reduced our SG&A expense structure by nearly $120 million. Group 1’s goal in 2010 was to leverage that lean cost structure with a concentrated sales effort. The total revenue increase of almost 22 percent for the year indicates that we were highly successful. Most gratifying is that we demonstrated significant growth in all sales segments, highlighted by the 32 percent increase in used vehicle revenues. Relative to new vehicle sales, we far outpaced the national average performance for most brands we sell with Chevrolet up 31 percent, Nissan up 29 percent, Ford up 27 percent, as well as Toyota, where we were up 12 percent versus Toyota’s near-flat national sales results.”
Balance Sheet
New vehicle inventory increased $34.4 million from Sept. 30, to $572.0 million as of Dec. 31. The company ended the quarter with immediately available funds of $149.0 million and available liquidity of $382.7 million.
As previously announced in January, Group 1 successfully restructured its mortgage facility and entered into new five- to seven-year term loan agreements of approximately $188.6 million. The agreements may be expanded, allowing the company to manage its real estate portfolio with favorable rates as it grows the company.
In addition, Group 1 previously announced that several of its interest-rate swap contracts expired in December, and that the net effect of these expired contracts and the restructured mortgage agreements are estimated to reduce pretax interest expense by approximately $3.8 million in 2011.
Corporate Development Update
During the fourth quarter, Group 1 terminated eight domestic franchises that included Mercury and Pontiac franchises related to the brand discontinuations by the respective manufacturers.
For the full year, Group 1 acquired 10 franchises with total estimated annual revenues of $256.2 million and disposed of 11 franchises with trailing-12-month revenues of $83.1 million in 2010.
Fourth-Quarter Earnings Conference Call
Group 1’s senior management will host a conference call today at 10 a.m. ET to discuss the fourth-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:888.401.4669
International:719.325.2218
Participant Passcode:6818164
International:719.325.2218
Participant Passcode:6818164
A telephonic replay will be available following the call through Feb. 17 by dialing:
Domestic:888.203.1112
Group 1 Automotive, Inc.
International:719.457.0820
Replay Passcode:6818164
Replay Passcode:6818164
About Group 1 Automotive, Inc.
Group 1 owns and operates 100 automotive dealerships, 129 franchises, and 25 collision service centers in the United States and the United Kingdom that offer 30 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.
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
|pdelongchamps@group1auto.com
or
Clint Woods, Pierpont Communications, Inc. | 713-627-2223 |cwoods@piercom.com
Group 1 Automotive, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 832,714 | $ | 659,058 | 26.3 | % | $ | 3,086,807 | $ | 2,543,031 | 21.4 | % | |||||||||||||
| Used vehicle retail sales | 310,663 | 241,269 | 28.8 | 1,271,039 | 970,614 | 31.0 | |||||||||||||||||||
| Used vehicle wholesale sales | 58,877 | 40,532 | 45.3 | 215,530 | 153,068 | 40.8 | |||||||||||||||||||
| Parts and service | 191,242 | 175,341 | 9.1 | 767,004 | 722,565 | 6.2 | |||||||||||||||||||
| Finance and insurance | 44,256 | 34,216 | 29.3 | 168,789 | 136,429 | 23.7 | |||||||||||||||||||
| Total revenues | 1,437,752 | 1,150,416 | 25.0 | 5,509,169 | 4,525,707 | 21.7 | |||||||||||||||||||
COST OF SALES: | |||||||||||||||||||||||||
| New vehicle retail sales | 786,479 | 617,897 | 27.3 | 2,909,012 | 2,388,797 | 21.8 | |||||||||||||||||||
| Used vehicle retail sales | 285,212 | 219,940 | 29.7 | 1,156,035 | 872,580 | 32.5 | |||||||||||||||||||
| Used vehicle wholesale sales | 59,268 | 41,559 | 42.6 | 212,833 | 150,764 | 41.2 | |||||||||||||||||||
| Parts and service | 89,772 | 80,973 | 10.9 | 354,256 | 337,729 | 4.9 | |||||||||||||||||||
| Total cost of sales | 1,220,731 | 960,369 | 27.1 | 4,632,136 | 3,749,870 | 23.5 | |||||||||||||||||||
GROSS PROFIT | 217,021 | 190,047 | 14.2 | 877,033 | 775,837 | 13.0 | |||||||||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 170,839 | 154,235 | 10.8 | 693,635 | 621,048 | 11.7 | |||||||||||||||||||
| DEPRECIATION AND AMORTIZATION EXPENSE | 6,519 | 6,287 | 3.7 | 26,455 | 25,828 | 2.4 | |||||||||||||||||||
| ASSET IMPAIRMENTS | 7,719 | 18,050 | (57.2 | ) | 10,840 | 20,887 | (48.1 | ) | |||||||||||||||||
OPERATING INCOME | 31,944 | 11,475 | 178.4 | 146,103 | 108,074 | 35.2 | |||||||||||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||||||||||||
| Floorplan interest expense | (8,890 | ) | (8,003 | ) | 11.1 | (34,110 | ) | (32,345 | ) | 5.5 | |||||||||||||||
| Other interest expense, net | (6,952 | ) | (7,218 | ) | (3.7 | ) | (27,217 | ) | (29,075 | ) | (6.4 | ) | |||||||||||||
| Gain (loss) on redemption of long-term debt | — | — | — | (3,872 | ) | 8,211 | (147.2 | ) | |||||||||||||||||
| Other expense, net | — | (8 | ) | (100.0 | ) | — | (14 | ) | (100.0 | ) | |||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 16,102 | (3,754 | ) | 528.9 | 80,904 | 54,851 | 47.5 | ||||||||||||||||||
| INCOME TAX (PROVISION) BENEFIT | (5,533 | ) | 1,802 | (407.0 | ) | (30,600 | ) | (20,006 | ) | 53.0 | |||||||||||||||
NET INCOME (LOSS) | $ | 10,569 | $ | (1,952 | ) | 641.4 | % | $ | 50,304 | $ | 34,845 | 44.4 | % | ||||||||||||
DILUTED INCOME (LOSS) PER SHARE | $ | 0.46 | $ | (0.08 | ) | 675.0 | % | $ | 2.16 | $ | 1.49 | 45.0 | % | ||||||||||||
| Weighted average diluted shares outstanding | 23,027 | 23,577 | (2.3) | % | 23,317 | 23,325 | (0.0) | % | |||||||||||||||||
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
| December 31, | December 31, | |||||||||||
| 2010 | 2009 | % Change | ||||||||||
| (Unaudited) | ||||||||||||
ASSETS: | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 19,843 | $ | 13,221 | 50.1 | % | ||||||
| Contracts in transit and vehicle receivables, net | 113,846 | 86,500 | 31.6 | |||||||||
| Accounts and notes receivable, net | 75,623 | 62,496 | 21.0 | |||||||||
| Inventories | 777,771 | 596,743 | 30.3 | |||||||||
| Deferred income taxes | 14,819 | 14,653 | 1.1 | |||||||||
| Prepaid expenses and other current assets | 17,332 | 48,425 | (64.2 | ) | ||||||||
| Total current assets | 1,019,234 | 822,038 | 24.0 | |||||||||
| PROPERTY AND EQUIPMENT, net | 506,288 | 475,828 | 6.4 | |||||||||
| GOODWILL AND INTANGIBLE FRANCHISE RIGHTS | 666,656 | 658,281 | 1.3 | |||||||||
| OTHER ASSETS | 9,786 | 13,267 | (26.2 | ) | ||||||||
| Total assets | $ | 2,201,964 | $ | 1,969,414 | 11.8 | % | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Floorplan notes payable — credit facility | $ | 690,051 | $ | 491,892 | 40.3 | % | ||||||
| Offset account related to floorplan notes payable — credit facility | (129,211 | ) | (71,573 | ) | 80.5 | |||||||
| Floorplan notes payable — manufacturer affiliates | 103,345 | 115,180 | (10.3 | ) | ||||||||
| Current maturities of mortgage facility | 42,600 | 10,511 | 305.3 | |||||||||
| Current maturities of long-term debt | 10,589 | 3,844 | 175.5 | |||||||||
| Current liabilities from interest rate risk management activities | 1,098 | 10,412 | (89.5 | ) | ||||||||
| Accounts payable | 92,799 | 72,276 | 28.4 | |||||||||
| Accrued expenses | 83,663 | 86,271 | (3.0 | ) | ||||||||
| Total current liabilities | 894,934 | 718,813 | 24.5 | |||||||||
| 2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $182,753 at December 31, 2010 and December 31, 2009) | 138,155 | 131,932 | 4.7 | |||||||||
| 3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of $115,000 at December 31, 2010) | 74,365 | — | 100.0 | |||||||||
| 8.25% SENIOR SUBORDINATED NOTES | — | 73,267 | (100.0 | ) | ||||||||
| MORTGAGE FACILITY, net of current maturities | — | 182,216 | (100.0 | ) | ||||||||
| OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, net of current maturities | 161,611 | 19,040 | 748.8 | |||||||||
| CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities | 38,819 | 37,686 | 3.0 | |||||||||
| DEFERRED INCOME TAXES | 58,970 | 33,932 | 73.8 | |||||||||
| LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES | 16,426 | 20,151 | (18.5 | ) | ||||||||
| OTHER LIABILITIES | 31,036 | 26,633 | 16.5 | |||||||||
| DEFERRED REVENUES | 3,280 | 5,588 | (41.3 | ) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||||||
| Common stock | 261 | 262 | (0.4 | ) | ||||||||
| Additional paid-in capital | 363,966 | 346,055 | 5.2 | |||||||||
| Retained earnings | 519,843 | 471,932 | 10.2 | |||||||||
| Accumulated other comprehensive loss | (18,755 | ) | (26,256 | ) | (28.6 | ) | ||||||
| Treasury stock | (80,947 | ) | (71,837 | ) | 12.7 | |||||||
| Total stockholders’ equity | 784,368 | 720,156 | 8.9 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,201,964 | $ | 1,969,414 | 11.8 | % | ||||||
Group 1 Automotive, Inc.
Consolidated Statements of Adjusted Cash Flows from Operating Activities
(Unaudited)
(In thousands)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | ||||||||||||||||||||
| Net income (loss) | $ | 10,569 | $ | (1,952 | ) | 641.4 | % | $ | 50,304 | $ | 34,845 | 44.4 | % | ||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||||||||||
| Asset impairments | 7,719 | 18,050 | (57.2 | ) | 10,840 | 20,887 | (48.1 | ) | |||||||||||||||||
| Depreciation and amortization | 6,519 | 6,287 | 3.7 | 26,455 | 25,828 | 2.4 | |||||||||||||||||||
| Deferred income taxes | 1,050 | 6,568 | (84.0 | ) | 23,274 | 29,646 | (21.5 | ) | |||||||||||||||||
| (Gain) loss on redemption of long-term debt | — | — | — | 3,872 | (8,211 | ) | 147.2 | ||||||||||||||||||
| (Gain) loss on disposition of assets and franchise | (2,322 | ) | 254 | (1,014.2 | ) | 848 | 248 | 241.9 | |||||||||||||||||
| Stock-based compensation | 2,437 | 1,502 | 62.3 | 9,942 | 8,869 | 12.1 | |||||||||||||||||||
| Amortization of debt discount and issue costs | 3,986 | 1,617 | 146.5 | 10,322 | 7,030 | 46.8 | |||||||||||||||||||
| Other | (30 | ) | 457 | (106.6 | ) | 824 | (402 | ) | 305.0 | ||||||||||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: | |||||||||||||||||||||||||
| Inventories | (21,302 | ) | (130,150 | ) | (83.6 | ) | (174,249 | ) | 242,996 | (171.7 | ) | ||||||||||||||
| Floorplan notes payable — credit facility | 33,350 | 117,450 | (71.6 | ) | 198,159 | (246,659 | ) | 180.3 | |||||||||||||||||
| Floorplan notes payable — manufacturer affiliates | (299 | ) | 25,309 | (101.2 | ) | (10,580 | ) | (14,145 | ) | (25.2 | ) | ||||||||||||||
| Contracts-in-transit and vehicle receivables | (21,330 | ) | (19,409 | ) | 9.9 | (27,218 | ) | 16,500 | (265.0 | ) | |||||||||||||||
| Accounts and notes receivable | (9,097 | ) | (10,014 | ) | (9.2 | ) | (13,844 | ) | 10,851 | (227.6 | ) | ||||||||||||||
| Prepaid expenses and other assets | (138 | ) | (6,459 | ) | (97.9 | ) | 6,922 | 845 | 719.2 | ||||||||||||||||
| Deferred revenues | (549 | ) | (1,155 | ) | (52.5 | ) | (2,308 | ) | (4,632 | ) | (50.2 | ) | |||||||||||||
| Accounts payable and accrued expenses | 6,506 | (1,003 | ) | 748.7 | 16,130 | (16,481 | ) | 197.9 | |||||||||||||||||
| Adjusted net cash provided by operating activities | $ | 17,069 | $ | 7,352 | 132.2 | % | $ | 129,693 | $ | 108,015 | 20.1 | % | |||||||||||||
Group 1 Automotive, Inc.
Additional Information — Consolidated
(Unaudited)
Additional Information — Consolidated
(Unaudited)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: | |||||||||||||||||||
Region | Geographic Market | ||||||||||||||||||
| Eastern | Massachusetts | 12.2 | % | 14.9 | % | 14.3 | % | 15.1 | % | ||||||||||
| New Jersey | 5.9 | 6.3 | 6.3 | 6.5 | |||||||||||||||
| New York | 3.9 | 4.4 | 3.8 | 4.1 | |||||||||||||||
| Georgia | 3.8 | 3.9 | 3.9 | 3.7 | |||||||||||||||
| New Hampshire | 3.7 | 4.3 | 4.0 | 4.2 | |||||||||||||||
| Louisiana | 3.6 | 2.8 | 3.2 | 3.1 | |||||||||||||||
| South Carolina | 1.9 | 0.3 | 1.3 | 0.3 | |||||||||||||||
| Mississippi | 1.7 | 1.7 | 1.7 | 1.8 | |||||||||||||||
| Alabama | 1.1 | 0.8 | 1.2 | 0.7 | |||||||||||||||
| Maryland | 0.8 | 0.9 | 0.8 | 0.9 | |||||||||||||||
| Florida | 0.7 | 2.0 | 1.2 | 1.7 | |||||||||||||||
| 39.3 | 42.3 | 41.7 | 42.1 | ||||||||||||||||
| Central | Texas | 32.6 | 31.8 | 31.2 | 32.1 | ||||||||||||||
| Oklahoma | 7.4 | 8.0 | 7.8 | 8.3 | |||||||||||||||
| Kansas | 0.9 | 1.2 | 0.9 | 1.2 | |||||||||||||||
| 40.9 | 41.0 | 39.9 | 41.6 | ||||||||||||||||
| Western | California | 14.5 | 13.9 | 13.7 | 14.0 | ||||||||||||||
| International | United Kingdom | 5.3 | 2.8 | 4.7 | 2.3 | ||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
NEW VEHICLE UNIT SALES BRAND MIX: | |||||||||||||||||||
| Toyota/Scion/Lexus | 35.5 | % | 38.0 | % | 35.5 | % | 36.6 | % | |||||||||||
| BMW/Mini | 13.3 | 10.8 | 11.9 | 9.8 | |||||||||||||||
| Nissan/Infiniti | 12.6 | 12.6 | 14.1 | 12.8 | |||||||||||||||
| Honda/Acura | 11.6 | 11.4 | 12.0 | 12.6 | |||||||||||||||
| Ford | 7.4 | 8.1 | 7.8 | 7.9 | |||||||||||||||
| Mercedes-Benz | 6.3 | 7.4 | 5.8 | 5.9 | |||||||||||||||
| GM | 4.3 | 4.3 | 4.0 | 3.8 | |||||||||||||||
| Chrysler | 3.3 | 2.7 | 3.0 | 5.0 | |||||||||||||||
| Other | 5.7 | 4.7 | 5.9 | 5.6 | |||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
NEW VEHICLE UNIT SALES OTHER MIX: | |||||||||||||||||||
| Import | 55.1 | % | 55.7 | % | 57.5 | % | 57.8 | % | |||||||||||
| Luxury | 30.1 | 29.5 | 27.8 | 25.7 | |||||||||||||||
| Domestic | 14.8 | 14.8 | 14.7 | 16.5 | |||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
| Car | 56.4 | % | 57.3 | % | 58.2 | % | 58.6 | % | |||||||||||
| Truck | 43.6 | 42.7 | 41.8 | 41.4 | |||||||||||||||
| 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 December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||
| 2010 | 2009 | %Change | 2010 | 2009 | %Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 832,714 | $ | 659,058 | 26.3 | % | $ | 3,086,807 | $ | 2,543,031 | 21.4 | % | |||||||||||||
| Used vehicle retail sales | 310,663 | 241,269 | 28.8 | 1,271,039 | 970,614 | 31.0 | |||||||||||||||||||
| Used vehicle wholesale sales | 58,877 | 40,532 | 45.3 | 215,530 | 153,068 | 40.8 | |||||||||||||||||||
| Total used | 369,540 | 281,801 | 31.1 | 1,486,569 | 1,123,682 | 32.3 | |||||||||||||||||||
| Parts and service | 191,242 | 175,341 | 9.1 | 767,004 | 722,565 | 6.2 | |||||||||||||||||||
| Finance and insurance | 44,256 | 34,216 | 29.3 | 168,789 | 136,429 | 23.7 | |||||||||||||||||||
| Total | $ | 1,437,752 | $ | 1,150,416 | 25.0 | % | $ | 5,509,169 | $ | 4,525,707 | 21.7 | % | |||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||||
| New vehicle retail sales | 5.6 | % | 6.2 | % | 5.8 | % | 6.1 | % | |||||||||||||||||
| Used vehicle retail sales | 8.2 | 8.8 | 9.0 | 10.1 | |||||||||||||||||||||
| Used vehicle wholesale sales | (0.7 | ) | (2.5 | ) | 1.3 | 1.5 | |||||||||||||||||||
| Total used | 6.8 | 7.2 | 7.9 | 8.9 | |||||||||||||||||||||
| Parts and service | 53.1 | 53.8 | 53.8 | 53.3 | |||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
| Total | 15.1 | % | 16.5 | % | 15.9 | % | 17.1 | % | |||||||||||||||||
GROSS PROFIT: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 46,235 | $ | 41,161 | 12.3 | % | $ | 177,795 | $ | 154,234 | 15.3 | % | |||||||||||||
| Used vehicle retail sales | 25,451 | 21,329 | 19.3 | 115,004 | 98,034 | 17.3 | |||||||||||||||||||
| Used vehicle wholesale sales | (391 | ) | (1,027 | ) | (61.9 | ) | 2,697 | 2,304 | 17.1 | ||||||||||||||||
| Total used | 25,060 | 20,302 | 23.4 | 117,701 | 100,338 | 17.3 | |||||||||||||||||||
| Parts and service | 101,470 | 94,368 | 7.5 | 412,748 | 384,836 | 7.3 | |||||||||||||||||||
| Finance and insurance | 44,256 | 34,216 | 29.3 | 168,789 | 136,429 | 23.7 | |||||||||||||||||||
| Total | $ | 217,021 | $ | 190,047 | 14.2 | % | $ | 877,033 | $ | 775,837 | 13.0 | % | |||||||||||||
UNITS SOLD: | |||||||||||||||||||||||||
| Retail new vehicles sold | 25,383 | 20,240 | 25.4 | % | 97,511 | 83,182 | 17.2 | % | |||||||||||||||||
| Retail used vehicles sold | 15,771 | 12,886 | 22.4 | 66,001 | 54,067 | 22.1 | |||||||||||||||||||
| Wholesale used vehicles sold | 8,808 | 6,571 | 34.0 | 33,524 | 27,793 | 20.6 | |||||||||||||||||||
| Total used | 24,579 | 19,457 | 26.3 | % | 99,525 | 81,860 | 21.6 | % | |||||||||||||||||
GROSS PROFIT PER UNIT SOLD: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,821 | $ | 2,034 | (10.5) | % | $ | 1,823 | $ | 1,854 | (1.7 | )% | |||||||||||||
| Used vehicle retail sales | 1,614 | 1,655 | (2.5 | ) | 1,742 | 1,813 | (3.9 | ) | |||||||||||||||||
| Used vehicle wholesale sales | (44 | ) | (156 | ) | (71.8 | ) | 80 | 83 | (3.6 | ) | |||||||||||||||
| Total used | 1,020 | 1,043 | (2.2 | ) | 1,183 | 1,226 | (3.5 | ) | |||||||||||||||||
| Finance and insurance (per retail unit) | $ | 1,075 | $ | 1,033 | 4.1 | % | $ | 1,032 | $ | 994 | 3.8 | % | |||||||||||||
OTHER(1): | |||||||||||||||||||||||||
| SG&A expenses | $ | 170,839 | $ | 153,233 | 11.5 | % | $ | 689,320 | $ | 620,749 | 11.0 | % | |||||||||||||
| SG&A as % revenues | 11.9 | % | 13.3 | % | 12.5 | % | 13.7 | % | |||||||||||||||||
| SG&A as % gross profit | 78.7 | % | 80.6 | % | 78.6 | % | 80.0 | % | |||||||||||||||||
| Operating margin | 2.8 | % | 2.7 | % | 2.9 | % | 2.9 | % | |||||||||||||||||
| Pretax margin | 1.7 | % | 1.3 | % | 1.8 | % | 1.5 | % | |||||||||||||||||
FLOORPLAN EXPENSE: | |||||||||||||||||||||||||
| Floorplan interest | $ | (8,890 | ) | $ | (8,003 | ) | 11.1 | % | $ | (34,110 | ) | $ | (32,345 | ) | 5.5 | % | |||||||||
| Floorplan assistance | 6,162 | 5,009 | 23.0 | 23,998 | 20,039 | 19.8 | |||||||||||||||||||
| Net floorplan expense | $ | (2,728 | ) | $ | (2,994 | ) | (8.9) | % | $ | (10,112 | ) | $ | (12,306 | ) | (17.8 | )% | |||||||||
| (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 December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 791,481 | $ | 648,137 | 22.1 | % | $ | 2,961,961 | $ | 2,494,827 | 18.7 | % | |||||||||||||
| Used vehicle retail sales | 294,301 | 238,001 | 23.7 | 1,208,687 | 948,785 | 27.4 | |||||||||||||||||||
| Used vehicle wholesale sales | 55,119 | 39,839 | 38.4 | 202,243 | 149,530 | 35.3 | |||||||||||||||||||
| Total used | 349,420 | 277,840 | 25.8 | 1,410,930 | 1,098,315 | 28.5 | |||||||||||||||||||
| Parts and service | 185,648 | 171,001 | 8.6 | 745,840 | 702,811 | 6.1 | |||||||||||||||||||
| Finance and insurance | 43,190 | 33,783 | 27.8 | 165,598 | 133,765 | 23.8 | |||||||||||||||||||
| Total | $ | 1,369,739 | $ | 1,130,761 | 21.1 | % | $ | 5,284,329 | $ | 4,429,718 | 19.3 | % | |||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||||
| New vehicle retail sales | 5.5 | % | 6.3 | % | 5.7 | % | 6.1 | % | |||||||||||||||||
| Used vehicle retail sales | 8.3 | 8.9 | 9.2 | 10.1 | |||||||||||||||||||||
| Used vehicle wholesale sales | (0.3 | ) | (2.4 | ) | 1.5 | 1.6 | |||||||||||||||||||
| Total used | 6.9 | 7.3 | 8.1 | 8.9 | |||||||||||||||||||||
| Parts and service | 53.0 | 54.0 | 53.8 | 53.4 | |||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
| Total | 15.3 | % | 16.5 | % | 16.1 | % | 17.1 | % | |||||||||||||||||
GROSS PROFIT: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 43,751 | $ | 40,735 | 7.4 | % | $ | 169,717 | $ | 152,252 | 11.5 | % | |||||||||||||
| Used vehicle retail sales | 24,362 | 21,101 | 15.5 | 110,707 | 95,780 | 15.6 | |||||||||||||||||||
| Used vehicle wholesale sales | (182 | ) | (947 | ) | (80.8 | ) | 3,115 | 2,417 | 28.9 | ||||||||||||||||
| Total used | 24,180 | 20,154 | 20.0 | 113,822 | 98,197 | 15.9 | |||||||||||||||||||
| Parts and service | 98,457 | 92,281 | 6.7 | 401,377 | 375,169 | 7.0 | |||||||||||||||||||
| Finance and insurance | 43,190 | 33,783 | 27.8 | 165,598 | 133,765 | 23.8 | |||||||||||||||||||
| Total | $ | 209,578 | $ | 186,953 | 12.1 | % | $ | 850,514 | $ | 759,383 | 12.0 | % | |||||||||||||
UNITS SOLD: | |||||||||||||||||||||||||
| Retail new vehicles sold | 24,080 | 19,919 | 20.9 | % | 93,491 | 81,599 | 14.6 | % | |||||||||||||||||
| Retail used vehicles sold | 15,027 | 12,699 | 18.3 | 63,123 | 52,654 | 19.9 | |||||||||||||||||||
| Wholesale used vehicles sold | 8,330 | 6,454 | 29.1 | 31,956 | 27,115 | 17.9 | |||||||||||||||||||
| Total used | 23,357 | 19,153 | 21.9 | % | 95,079 | 79,769 | 19.2 | % | |||||||||||||||||
GROSS PROFIT PER UNIT SOLD: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,817 | $ | 2,045 | (11.1 | )% | $ | 1,815 | $ | 1,866 | (2.7 | )% | |||||||||||||
| Used vehicle retail sales | 1,621 | 1,662 | (2.5 | ) | 1,754 | 1,819 | (3.6 | ) | |||||||||||||||||
| Used vehicle wholesale sales | (22 | ) | (147 | ) | (85.0 | ) | 97 | 89 | 9.0 | ||||||||||||||||
| Total used | 1,035 | 1,052 | (1.6 | ) | 1,197 | 1,231 | (2.8 | ) | |||||||||||||||||
| Finance and insurance (per retail unit) | $ | 1,104 | $ | 1,036 | 6.6 | % | $ | 1,057 | $ | 996 | 6.1 | % | |||||||||||||
OTHER: | |||||||||||||||||||||||||
| SG&A expenses | $ | 163,801 | $ | 149,716 | 9.4 | % | $ | 663,960 | $ | 603,366 | 10.0 | % | |||||||||||||
| SG&A as % revenues | 12.0 | % | 13.2 | % | 12.6 | % | 13.6 | % | |||||||||||||||||
| SG&A as % gross profit | 78.2 | % | 80.1 | % | 78.1 | % | 79.5 | % | |||||||||||||||||
| Operating margin | 2.5 | % | 2.4 | % | 2.9 | % | 2.9 | % | |||||||||||||||||
FLOORPLAN EXPENSE: | |||||||||||||||||||||||||
| Floorplan interest | $ | (8,736 | ) | $ | (7,873 | ) | 11.0 | % | $ | (33,520 | ) | $ | (31,966 | ) | 4.9 | % | |||||||||
| Floorplan assistance | 6,039 | 4,888 | 23.5 | 23,675 | 19,510 | 21.3 | |||||||||||||||||||
| Net floorplan expense | $ | (2,697 | ) | $ | (2,985 | ) | (9.6 | )% | $ | (9,845 | ) | $ | (12,456 | ) | (21.0 | )% | |||||||||
| (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)
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | ||||||||||||||||||||
NET INCOME RECONCILIATION: | |||||||||||||||||||||||||
| As reported | $ | 10,569 | $ | (1,952 | ) | 641.4 | % | $ | 50,304 | $ | 34,845 | 44.4 | % | ||||||||||||
| After-tax Adjustments: | |||||||||||||||||||||||||
Non-Cash asset impairment charges(2) | 4,947 | 11,557 | 6,930 | 13,283 | |||||||||||||||||||||
Mortgage debt refinance charges(3) | — | — | — | 331 | |||||||||||||||||||||
Loss on dealership dispositions(4) | — | 651 | 3,698 | 200 | |||||||||||||||||||||
Loss (gain) on debt redemption(5) | — | — | 2,458 | (5,299 | ) | ||||||||||||||||||||
Severance costs related to UK-dealership acquisitions(6) | — | — | 405 | — | |||||||||||||||||||||
Income tax benefit related to discrete items(7) | (810 | ) | — | (810 | ) | (1,604 | ) | ||||||||||||||||||
Gain on sale of real estate(8) | — | — | (761 | ) | — | ||||||||||||||||||||
Adjusted net income(1) | $ | 14,706 | $ | 10,256 | 43.4 | % | $ | 62,224 | $ | 41,756 | 49.0 | % | |||||||||||||
DILUTED INCOME PER SHARE RECONCILIATION(11): | |||||||||||||||||||||||||
| As reported | $ | 0.46 | $ | (0.08 | ) | 675.0 | % | $ | 2.16 | $ | 1.49 | 45.0 | % | ||||||||||||
| After-tax Adjustments: | |||||||||||||||||||||||||
| Non-Cash asset impairment charges | 0.22 | 0.49 | 0.30 | 0.57 | |||||||||||||||||||||
| Mortgage debt refinance charges | — | — | — | 0.01 | |||||||||||||||||||||
| Loss on dealership dispositions | — | 0.02 | 0.15 | 0.01 | |||||||||||||||||||||
| Loss (gain) on debt redemption | — | — | 0.10 | (0.22 | ) | ||||||||||||||||||||
| Severance costs related to UK-dealership acquisitions | — | — | 0.02 | — | |||||||||||||||||||||
| Income tax benefit related to discrete items | (0.04 | ) | — | (0.03 | ) | (0.07 | ) | ||||||||||||||||||
| Gain on sale of real estate | — | — | (0.03 | ) | — | ||||||||||||||||||||
Adjusted diluted income per share(1) | $ | 0.64 | $ | 0.43 | 48.8 | % | $ | 2.67 | $ | 1.79 | 49.2 | % | |||||||||||||
SG&A RECONCILIATION: | |||||||||||||||||||||||||
| As reported | $ | 170,839 | $ | 154,235 | 10.8 | % | $ | 693,635 | $ | 621,048 | 11.7 | % | |||||||||||||
| Pre-tax Adjustments: | |||||||||||||||||||||||||
| Loss on dealership dispositions | — | (1,002 | ) | (5,053 | ) | (299 | ) | ||||||||||||||||||
| Severance costs related to UK-dealership acquisitions | — | — | (562 | ) | — | ||||||||||||||||||||
| Gain on sale of real estate | — | — | 1,300 | — | |||||||||||||||||||||
Adjusted SG&A(1) | $ | 170,839 | $ | 153,233 | 11.5 | % | $ | 689,320 | $ | 620,749 | 11.0 | % | |||||||||||||
SG&A AS % REVENUES: | |||||||||||||||||||||||||
| Unadjusted | 11.9 | % | 13.4 | % | 12.6 | % | 13.7 | % | |||||||||||||||||
Adjusted(1) | 11.9 | % | 13.3 | % | 12.5 | % | 13.7 | % | |||||||||||||||||
SG&A AS % OF GROSS PROFIT: | |||||||||||||||||||||||||
| Unadjusted | 78.7 | % | 81.2 | % | 79.1 | % | 80.0 | % | |||||||||||||||||
Adjusted(1) | 78.7 | % | 80.6 | % | 78.6 | % | 80.0 | % | |||||||||||||||||
OPERATING MARGIN: | |||||||||||||||||||||||||
| Unadjusted | 2.2 | % | 1.0 | % | 2.7 | % | 2.4 | % | |||||||||||||||||
Adjusted(1), (9) | 2.8 | % | 2.7 | % | 2.9 | % | 2.9 | % | |||||||||||||||||
PRETAX MARGIN: | |||||||||||||||||||||||||
| Unadjusted | 1.1 | % | (0.3 | )% | 1.5 | % | 1.2 | % | |||||||||||||||||
Adjusted(1), (10) | 1.7 | % | 1.3 | % | �� | 1.8 | % | 1.5 | % | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | ||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATION: | |||||||||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | (16,281 | ) | $ | (110,098 | ) | (85.2 | )% | $ | (68,466 | ) | $ | 354,674 | (119.3 | )% | ||||||||||
| Change in floorplan notes payable-credit facility, excluding floorplan offset account | 33,350 | 117,450 | 198,159 | (246,659 | ) | ||||||||||||||||||||
Adjusted net cash provided by operating activities(1) | $ | 17,069 | $ | 7,352 | 132.2 | % | $ | 129,693 | $ | 108,015 | 20.1 | % | |||||||||||||
| (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 $2,772 and $3,910 for the three and twelve months ended December 31, 2010, and $6,493 and $7,509 for the three and twelve months ended December 31, 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 twelve months ended December 31, 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 twelve months ended December 31, 2010 and $351 and $99 for the three and twelve months ended December 31, 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 twelve months ended December 31, 2010 and tax provision of $3,446 for the twelve months ended December 31, 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 twelve months ended December 31, 2010, calculated utilizing the applicable UK corporate tax rate for the adjustment. | |
| (7) | The $0.8 million income tax benefit for the three months ended December 31, 2010 relates to the tax deductibility of goodwill written off in conjunction with the termination of a franchise, and the $1.6 million income tax benefit for the twelve months ended December 31, 2009 relates to a tax election made for prior periods. | |
| (8) | Adjustment is net of a tax provision of $539 for the twelve months ended December 31, 2010, calculated utilizing the applicable federal and state tax rate for the adjustment. | |
| (9) | Excludes the impact of non-cash asset impairment charges, loss on dealership dispositions, severance costs related to UK-dealership acquisitions, and gain on sale of real estate. | |
| (10) | Excludes the impact of non-cash asset impairment charges, mortgage debt refinance charges, loss on dealership dispositions, gain/loss on debt redemption, severance costs related to UK-dealership acquisitions, and gain on sale of real estate. | |
| (11) | 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. |