 | ||||||
| NEWS RELEASE | 950 Echo Lane, Suite 100 Houston, TX 77024 | |||||
AT GROUP 1: | President and CEO | Earl J. Hesterberg | (713) 647-5700 | |||
| SVP, CFO and Treasurer | Robert T. Ray | (713) 647-5700 | ||||
| Manager, Investor Relations | Kim Paper Canning | (713) 647-5700 | ||||
AT Fleishman-Hillard: | Investors/Media | Russell A. Johnson | (713) 513-9515 | |||
FOR IMMEDIATE RELEASE
TUESDAY, AUG. 2, 2005
TUESDAY, AUG. 2, 2005
GROUP 1 AUTOMOTIVE REPORTS SECOND-QUARTER RESULTS
HOUSTON, Aug. 2, 2005 — Group 1 Automotive, Inc. (NYSE: GPI),a Fortune 500 specialty retailer, today reported that its second-quarter net income increased 15.1 percent to $18.1 million, or $0.75 per diluted share, from $15.7 million, or $0.67 per diluted share, in the second quarter of 2004.
Summary Results of Operations (Unaudited)
(In millions, except per share amounts)
(In millions, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenues | $ | 1,577.3 | $ | 1,314.9 | $ | 2,974.1 | $ | 2,461.9 | ||||||||
Gross Profit | $ | 240.1 | $ | 198.5 | $ | 464.6 | $ | 381.9 | ||||||||
Income from Operations | $ | 43.4 | $ | 35.0 | $ | 80.0 | $ | 68.2 | ||||||||
Income before Cumulative Effect of a Change in Accounting Principle | $ | 18.1 | $ | 15.7 | $ | 32.5 | $ | 26.2 | ||||||||
Diluted Earnings per Share before Cumulative Effect of a Change in Accounting Principle | $ | 0.75 | $ | 0.67 | $ | 1.36 | $ | 1.12 | ||||||||
Second-Quarter Results
Total revenues for the second quarter increased 20.0 percent to a record $1.6 billion. Gross profit increased 20.9 percent from the prior-year period to $240.1 million, reflecting a 10 basis point increase in gross margin to 15.2 percent. Income from operations was $43.4 million in the second quarter, a 24.2 percent increase from 2004. Operating margin was 2.8 percent, compared with 2.7 percent in the prior-year period.
Total revenues for the second quarter increased 20.0 percent to a record $1.6 billion. Gross profit increased 20.9 percent from the prior-year period to $240.1 million, reflecting a 10 basis point increase in gross margin to 15.2 percent. Income from operations was $43.4 million in the second quarter, a 24.2 percent increase from 2004. Operating margin was 2.8 percent, compared with 2.7 percent in the prior-year period.
On a same store basis, revenues grew 3.9 percent, highlighted by increases in each of the company’s businesses. Gross profit increased 4.5 percent, reflecting increases of 11.4 percent in total used vehicles, 4.3 percent in parts and service, and 6.9 percent in finance and insurance, offset by a slight decrease in new vehicles. Same store gross margin increased by 10 basis points to 15.2 percent. Same store selling, general and administrative
Group 1 Automotive, Inc.
expenses as a percentage of gross profit declined by 40 basis points, and operating margin was unchanged at 2.7 percent compared to the prior-year period.
The company’s net income for the second quarter was $18.1 million, or $0.75 per diluted share, compared with $0.67 per diluted share on net income of $15.7 million in the prior-year period. Excluding the compensation and other costs associated with the company’s CEO transition, as described in the attached schedules, net income for the quarter was $0.79 per diluted share versus $0.67 per diluted share in 2004 on a comparable basis.
“We are pleased with our overall performance this quarter,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “Importantly, we delivered solid same store growth in revenues and profitability and reduced our new vehicle inventories to 62 days’ supply, 16 days lower than the same time last year.”
Year-to-Date Results
For the first six months of 2005, revenues grew 20.8 percent to $3.0 billion. New vehicle revenues grew 21.8 percent and total used vehicle revenues grew 17.0 percent, while parts and service and finance and insurance revenues grew 26.3 percent and 15.3 percent, respectively. On a same store basis, total revenues were up 2.1 percent from 2004.
For the first six months of 2005, revenues grew 20.8 percent to $3.0 billion. New vehicle revenues grew 21.8 percent and total used vehicle revenues grew 17.0 percent, while parts and service and finance and insurance revenues grew 26.3 percent and 15.3 percent, respectively. On a same store basis, total revenues were up 2.1 percent from 2004.
Income before the cumulative effect of a change in accounting principle for the six-month period was $32.5 million, or $1.36 per diluted share, compared with $26.2 million, or $1.12 per diluted share, during 2004. Excluding certain items described in the attached schedules, six-month net income was $1.40 per diluted share versus $1.29 per diluted share in 2004 on a comparable basis.
Platform Consolidations
Effective July 1, Group 1’s Beaumont, Texas, platform of dealerships was consolidated into the company’s Houston platform. The Beaumont and Houston platforms contributed 2.4 percent and 12.3 percent, respectively, of the company’s total new vehicle unit sales during the first six months of 2005. The consolidated platform will now be known as the Houston Metro Platform.
Effective July 1, Group 1’s Beaumont, Texas, platform of dealerships was consolidated into the company’s Houston platform. The Beaumont and Houston platforms contributed 2.4 percent and 12.3 percent, respectively, of the company’s total new vehicle unit sales during the first six months of 2005. The consolidated platform will now be known as the Houston Metro Platform.
In addition, effective Aug. 1, the company’s Rocky Mountain platform, with operations in New Mexico and Colorado, was consolidated into its West Texas platform. The Rocky Mountain and West Texas platforms contributed 3.9 percent and 7.0 percent, respectively, of the company’s total new vehicle unit sales during the first six months of 2005. The consolidated platform will now be known as the West Central Platform.
“The consolidation of these relatively small platforms into their larger, neighboring platforms should result in improved economies of scale and operating efficiencies,” said Hesterberg.
Acquisition Update
In May, Group 1 acquired BMW of Stratham in New Hampshire. The franchise, expected to generate $53.0 million in estimated annual revenues, is operating as part of the company’s nearby Ira Motor Group, based in Boston. Also during May, the company acquired Chrysler and Jeep franchises in Rockwall, Texas, to augment its existing Dodge dealership in that Dallas-area market. These two franchises are expected to generate $9.7 million in estimated annual revenues.
In May, Group 1 acquired BMW of Stratham in New Hampshire. The franchise, expected to generate $53.0 million in estimated annual revenues, is operating as part of the company’s nearby Ira Motor Group, based in Boston. Also during May, the company acquired Chrysler and Jeep franchises in Rockwall, Texas, to augment its existing Dodge dealership in that Dallas-area market. These two franchises are expected to generate $9.7 million in estimated annual revenues.
Including these acquisitions, the company has acquired five franchises with total estimated annual revenues of $108.7 million during 2005. The company noted that it still anticipates acquiring a total of $300 million in estimated annual revenues during 2005.
Group 1 Automotive, Inc.
Management’s Outlook
The company tightened its 2005 earnings guidance to $2.95 to $3.02 per diluted share. This guidance is based on average diluted shares outstanding of 24.0 million and excludes the impact of future acquisitions and any cumulative effect of a change in accounting principle.
The company tightened its 2005 earnings guidance to $2.95 to $3.02 per diluted share. This guidance is based on average diluted shares outstanding of 24.0 million and excludes the impact of future acquisitions and any cumulative effect of a change in accounting principle.
“Although some recent manufacturer incentive programs have succeeded in stimulating new vehicle sales, it remains to be seen whether this positive momentum can be sustained,” said Hesterberg. “Our full-year guidance assumes that our markets will remain highly competitive, and that the extraordinary pace of industry sales in recent months will not be maintained.”
Second-Quarter Conference Call
Group 1 will hold a conference call to discuss its second-quarter results at 10 a.m. EDT on Tuesday, Aug. 2. The 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.
Group 1 will hold a conference call to discuss its second-quarter results at 10 a.m. EDT on Tuesday, Aug. 2. The 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.
About Group 1 Automotive, Inc.
Group 1 owns 95 automotive dealerships comprised of 143 franchises, 33 brands and 31 collision service centers located in California, Colorado, Florida, Georgia, Louisiana, Massachusetts, New Hampshire, New Jersey, New Mexico, New York, Oklahoma and Texas. Through its dealerships and Internet sites, 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 owns 95 automotive dealerships comprised of 143 franchises, 33 brands and 31 collision service centers located in California, Colorado, Florida, Georgia, Louisiana, Massachusetts, New Hampshire, New Jersey, New Mexico, New York, Oklahoma and Texas. Through its dealerships and Internet sites, 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 and the attached schedules contain financial measures that have not been calculated in accordance with U.S. generally accepted accounting principles, or GAAP. These non-GAAP financial measures include net income and diluted earnings per share for the three- and six-month periods ended June 30, 2005 and 2004, adjusted to exclude special items disclosed in the attached schedules. As required by SEC rules, the company has provided in the attachments to this press release reconciliations of these measures to the most directly comparable GAAP measures, as well as a discussion as to why the company believes these measures may be important to investors.
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 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 the risks associated with acquisitions, and (h) 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)
(Dollars in thousands, except per share amounts)
Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2005 | 2004 | % Change | 2005 | 2004 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 980,375 | $ | 813,918 | 20.5 | % | $ | 1,814,320 | $ | 1,489,895 | 21.8 | % | |||||||||||||
| Used vehicle retail sales | 278,787 | 241,342 | 15.5 | 540,332 | 471,997 | 14.5 | |||||||||||||||||||
| Used vehicle wholesale sales | 106,786 | 87,106 | 22.6 | 202,980 | 163,297 | 24.3 | |||||||||||||||||||
| Parts and service | 163,057 | 131,283 | 24.2 | 322,517 | 255,303 | 26.3 | |||||||||||||||||||
| Finance and insurance | 48,328 | 41,252 | 17.2 | 93,911 | 81,436 | 15.3 | |||||||||||||||||||
| Total revenues | 1,577,333 | 1,314,901 | 20.0 | % | 2,974,060 | 2,461,928 | 20.8 | % | |||||||||||||||||
COST OF SALES: | |||||||||||||||||||||||||
| New vehicle retail sales | 911,815 | 756,519 | 20.5 | % | 1,686,648 | 1,384,603 | 21.8 | % | |||||||||||||||||
| Used vehicle retail sales | 244,053 | 212,154 | 15.0 | 472,222 | 414,239 | 14.0 | |||||||||||||||||||
| Used vehicle wholesale sales | 107,378 | 88,723 | 21.0 | 203,454 | 165,894 | 22.6 | |||||||||||||||||||
| Parts and service | 73,998 | 58,995 | 25.4 | 147,157 | 115,254 | 27.7 | |||||||||||||||||||
| Total cost of sales | 1,337,244 | 1,116,391 | 19.8 | % | 2,509,481 | 2,079,990 | 20.6 | % | |||||||||||||||||
| GROSS PROFIT | 240,089 | 198,510 | 20.9 | % | 464,579 | 381,938 | 21.6 | % | |||||||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 192,347 | 159,941 | 20.3 | % | 374,637 | 306,628 | 22.2 | % | |||||||||||||||||
| DEPRECIATION AND AMORTIZATION EXPENSE | 4,302 | 3,607 | 19.3 | % | 9,925 | 7,155 | 38.7 | % | |||||||||||||||||
| INCOME FROM OPERATIONS | 43,440 | 34,962 | 24.2 | % | 80,017 | 68,155 | 17.4 | % | |||||||||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||||||||||||
| Floorplan interest expense | (10,074 | ) | (5,965 | ) | 68.9 | % | (18,739 | ) | (10,846 | ) | 72.8 | % | |||||||||||||
| Other interest expense, net | (4,706 | ) | (3,793 | ) | 24.1 | (9,830 | ) | (8,931 | ) | 10.1 | |||||||||||||||
| Loss on redemption of senior subordinated notes | — | — | — | — | (6,381 | ) | (100.0 | ) | |||||||||||||||||
| Other income (expense), net | 11 | (62 | ) | (117.7 | ) | 8 | (63 | ) | (112.7 | ) | |||||||||||||||
| INCOME BEFORE INCOME TAXES | 28,671 | 25,142 | 14.0 | % | 51,456 | 41,934 | 22.7 | % | |||||||||||||||||
| PROVISION FOR INCOME TAXES | 10,582 | 9,428 | 12.2 | % | 18,967 | 15,733 | 20.6 | % | |||||||||||||||||
| INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE | 18,089 | 15,714 | 15.1 | 32,489 | 26,201 | 24.0 | |||||||||||||||||||
| CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX BENEFIT OF $10,231 | — | — | — | (16,038 | ) | — | — | ||||||||||||||||||
NET INCOME | $ | 18,089 | $ | 15,714 | 15.1 | % | $ | 16,451 | $ | 26,201 | (37.2 | )% | |||||||||||||
DILUTED EARNINGS (LOSS) PER SHARE: | |||||||||||||||||||||||||
| Income before cumulative effect of a change in accounting principle | $ | 0.75 | $ | 0.67 | 11.9 | % | $ | 1.36 | $ | 1.12 | 21.4 | % | |||||||||||||
| Cumulative effect of a change in accounting principle | — | — | — | (0.67 | ) | — | — | ||||||||||||||||||
| Net income | $ | 0.75 | $ | 0.67 | 11.9 | % | $ | 0.69 | $ | 1.12 | (38.4 | )% | |||||||||||||
| Weighted average diluted shares outstanding | 23,984,671 | 23,354,519 | 2.7 | % | 23,935,396 | 23,372,162 | 2.4 | % | |||||||||||||||||
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
| June 30, | December 31, | |||||||||||
| 2005 | 2004 | % Change | ||||||||||
ASSETS: | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 28,449 | $ | 37,750 | (24.6 | )% | ||||||
| Contracts in transit and vehicle receivables, net | 179,651 | 172,402 | 4.2 | |||||||||
| Accounts and notes receivable, net | 78,839 | 76,687 | 2.8 | |||||||||
| Inventories | 860,233 | 877,575 | (2.0 | ) | ||||||||
| Deferred income taxes | 17,322 | 14,755 | 17.4 | |||||||||
| Prepaid expenses and other current assets | 20,781 | 26,046 | (20.2 | ) | ||||||||
| Total current assets | 1,185,275 | 1,205,215 | (1.7 | ) | ||||||||
| PROPERTY AND EQUIPMENT, net | 173,914 | 160,297 | 8.5 | |||||||||
| GOODWILL | 373,819 | 366,673 | 1.9 | |||||||||
| INTANGIBLE FRANCHISE RIGHTS | 171,858 | 187,135 | (8.2 | ) | ||||||||
| OTHER ASSETS | 25,011 | 27,900 | (10.4 | ) | ||||||||
| Total assets | $ | 1,929,877 | $ | 1,947,220 | (0.9 | )% | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Floorplan notes payable | $ | 819,929 | $ | 848,260 | (3.3 | )% | ||||||
| Acquisition line of credit | 50,000 | — | N/A | |||||||||
| Current maturities of long-term debt | 1,046 | 1,054 | (0.8 | ) | ||||||||
| Accounts payable | 114,513 | 108,920 | 5.1 | |||||||||
| Accrued expenses | 104,982 | 91,528 | 14.7 | |||||||||
| Total current liabilities | 1,090,470 | 1,049,762 | 3.9 | |||||||||
| LONG-TERM DEBT, net of current maturities | 158,266 | 156,747 | 1.0 | |||||||||
| ACQUISITION LINE | — | 84,000 | (100.0 | ) | ||||||||
| DEFERRED INCOME TAXES | 26,599 | 33,197 | (19.9 | ) | ||||||||
| OTHER LIABILITIES | 27,466 | 24,288 | 13.1 | |||||||||
| Total liabilities before deferred revenues | 1,302,801 | 1,347,994 | (3.4 | ) | ||||||||
| DEFERRED REVENUES | 28,392 | 32,052 | (11.4 | ) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||||||
| Common stock | 242 | 239 | 1.3 | |||||||||
| Additional paid-in capital | 267,342 | 265,645 | 0.6 | |||||||||
| Retained earnings | 335,382 | 318,931 | 5.2 | |||||||||
| Accumulated other comprehensive loss | (189 | ) | (173 | ) | 9.2 | |||||||
| Deferred stock-based compensation | (4,093 | ) | — | N/A | ||||||||
| Treasury stock | — | (17,468 | ) | (100.0 | ) | |||||||
| Total stockholders’ equity | 598,684 | 567,174 | 5.6 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,929,877 | $ | 1,947,220 | (0.9 | )% | ||||||
BALANCE SHEET DATA: | ||||||||||||
| Working capital | $ | 94,805 | $ | 155,453 | (39.0 | )% | ||||||
| Current ratio | 1.09 | 1.15 | (5.2 | ) | ||||||||
| Long-term debt to capitalization | 21 | % | 30 | % | ||||||||
Inventory days supply:(1) | ||||||||||||
| New vehicle | 62 | 70 | (11.4 | )% | ||||||||
| Used vehicle | 29 | 29 | — | |||||||||
| (1) | Inventory days supply equals units in inventory as of the end of the period, divided by unit sales for the month then ended, times 30 days. |
Group 1 Automotive, Inc.
Additional Information — Consolidated
(Unaudited)
Additional Information — Consolidated
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2005 | 2004 | 2005 | 2004 | |||||||||||||||||
| NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: | ||||||||||||||||||||
| Platform | State(s) | |||||||||||||||||||
| Ira Motor Group | Massachusetts | 13.1 | % | 13.5 | % | 13.0 | % | 13.0 | % | |||||||||||
| Sterling McCall Automotive Group | Texas | 12.2 | 11.8 | 12.3 | 12.1 | |||||||||||||||
| Bob Howard Auto Group | Oklahoma | 12.2 | 12.8 | 11.7 | 12.8 | |||||||||||||||
| Miller Automotive Group | California | 11.3 | 10.1 | 11.5 | 11.0 | |||||||||||||||
| Maxwell Automotive Group | Texas | 7.7 | 8.3 | 7.6 | 8.0 | |||||||||||||||
| Gene Messer Auto Group | Texas | 7.0 | 8.4 | 7.0 | 8.9 | |||||||||||||||
| Group 1 Florida | Florida | 5.9 | 6.5 | 5.9 | 6.6 | |||||||||||||||
| Bohn Automotive Group | Louisiana | 5.6 | 6.9 | 5.6 | 7.0 | |||||||||||||||
| Peterson Automotive Group | California | 5.5 | 2.2 | 5.9 | 1.2 | |||||||||||||||
| Group 1 Atlanta | Georgia | 4.8 | 5.7 | 4.7 | 5.7 | |||||||||||||||
| Rocky Mountain Automotive Group | Colorado/New Mexico | 4.0 | 4.1 | 3.9 | 4.1 | |||||||||||||||
| Courtesy Auto Group | Texas | 3.2 | 3.6 | 3.2 | 3.8 | |||||||||||||||
| David Michael Motor Group | New Jersey | 2.8 | 3.3 | 2.8 | 2.9 | |||||||||||||||
| Hassel Auto Group | New York | 2.5 | — | 2.5 | — | |||||||||||||||
| Mike Smith Automotive Group | Texas | 2.2 | 2.8 | 2.4 | 2.9 | |||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||
| NEW VEHICLE UNIT SALES BRAND MIX: | ||||||||||||||||||||
| Toyota/Scion/Lexus | 28.9 | % | 27.9 | % | 28.7 | % | 27.4 | % | ||||||||||||
| Ford | 18.2 | 21.4 | 18.3 | 22.0 | ||||||||||||||||
| DaimlerChrysler | 14.8 | 13.9 | 14.7 | 13.6 | ||||||||||||||||
| Nissan/Infiniti | 10.6 | 9.9 | 11.4 | 10.7 | ||||||||||||||||
| GM | 11.4 | 11.4 | 10.8 | 11.0 | ||||||||||||||||
| Honda/Acura | 9.3 | 10.4 | 9.2 | 10.4 | ||||||||||||||||
| Other | 6.8 | 5.1 | 6.9 | 4.9 | ||||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||
| NEW VEHICLE UNIT OTHER MIX: | ||||||||||||||||||||
| Domestic | 38.9 | % | 43.0 | % | 38.2 | % | 43.1 | % | ||||||||||||
| Import | 45.4 | 45.0 | 46.2 | 44.9 | ||||||||||||||||
| Luxury | 15.7 | 12.0 | 15.6 | 12.0 | ||||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||
| Car | 45.5 | % | 42.4 | % | 45.5 | % | 42.1 | % | ||||||||||||
| Truck | 54.5 | 57.6 | 54.5 | 57.9 | ||||||||||||||||
| 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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2005 | 2004 | % Change | 2005 | 2004 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 980,375 | $ | 813,918 | 20.5 | % | $ | 1,814,320 | $ | 1,489,895 | 21.8 | % | |||||||||||||
| Used vehicle retail sales | 278,787 | 241,342 | 15.5 | 540,332 | 471,997 | 14.5 | |||||||||||||||||||
| Used vehicle wholesale sales | 106,786 | 87,106 | 22.6 | 202,980 | 163,297 | 24.3 | |||||||||||||||||||
| Total used | 385,573 | 328,448 | 17.4 | 743,312 | 635,294 | 17.0 | |||||||||||||||||||
| Parts and service | 163,057 | 131,283 | 24.2 | 322,517 | 255,303 | 26.3 | |||||||||||||||||||
| Finance and insurance | 48,328 | 41,252 | 17.2 | 93,911 | 81,436 | 15.3 | |||||||||||||||||||
| Total | $ | 1,577,333 | $ | 1,314,901 | 20.0 | % | $ | 2,974,060 | $ | 2,461,928 | 20.8 | % | |||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||||
| New vehicle retail sales | 7.0 | % | 7.1 | % | 7.0 | % | 7.1 | % | |||||||||||||||||
| Used vehicle retail sales | 12.5 | 12.1 | 12.6 | 12.2 | |||||||||||||||||||||
| Used vehicle wholesale sales | (0.6 | ) | (1.9 | ) | (0.2 | ) | (1.6 | ) | |||||||||||||||||
| Total used | 8.9 | 8.4 | 9.1 | 8.7 | |||||||||||||||||||||
| Parts and service | 54.6 | 55.1 | 54.4 | 54.9 | |||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
| Total | 15.2 | % | 15.1 | % | 15.6 | % | 15.5 | % | |||||||||||||||||
GROSS PROFIT (LOSS): | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 68,560 | $ | 57,399 | 19.4 | % | $ | 127,672 | $ | 105,292 | 21.3 | % | |||||||||||||
| Used vehicle retail sales | 34,734 | 29,188 | 19.0 | 68,110 | 57,758 | 17.9 | |||||||||||||||||||
| Used vehicle wholesale sales | (592 | ) | (1,617 | ) | 63.4 | (474 | ) | (2,597 | ) | 81.7 | |||||||||||||||
| Total used | 34,142 | 27,571 | 23.8 | 67,636 | 55,161 | 22.6 | |||||||||||||||||||
| Parts and service | 89,059 | 72,288 | 23.2 | 175,360 | 140,049 | 25.2 | |||||||||||||||||||
| Finance and insurance | 48,328 | 41,252 | 17.2 | 93,911 | 81,436 | 15.3 | |||||||||||||||||||
| Total | $ | 240,089 | $ | 198,510 | 20.9 | % | $ | 464,579 | $ | 381,938 | 21.6 | % | |||||||||||||
UNITS SOLD: | |||||||||||||||||||||||||
| Retail new vehicles sold | 33,721 | 29,441 | 14.5 | % | 62,554 | 53,873 | 16.1 | % | |||||||||||||||||
| Retail used vehicles sold | 17,441 | 16,425 | 6.2 | 34,683 | 32,611 | 6.4 | |||||||||||||||||||
| Wholesale used vehicles sold | 13,240 | 11,894 | 11.3 | 25,688 | 22,684 | 13.2 | |||||||||||||||||||
| Total used | 30,681 | 28,319 | 8.3 | % | 60,371 | 55,295 | 9.2 | % | |||||||||||||||||
GROSS PROFIT (LOSS) PER UNIT SOLD: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 2,033 | $ | 1,950 | 4.3 | % | $ | 2,041 | $ | 1,954 | 4.5 | % | |||||||||||||
| Used vehicle retail sales | 1,992 | 1,777 | 12.1 | 1,964 | 1,771 | 10.9 | |||||||||||||||||||
| Used vehicle wholesale sales | (45 | ) | (136 | ) | 66.9 | (18 | ) | (114 | ) | 84.2 | |||||||||||||||
| Total used | 1,113 | 974 | 14.3 | 1,120 | 998 | 12.2 | |||||||||||||||||||
| Finance and insurance (per retail unit) | 945 | 899 | 5.1 | 966 | 942 | 2.5 | |||||||||||||||||||
OTHER: | |||||||||||||||||||||||||
Adjusted used gross margin(1) | 12.2 | % | 11.4 | % | 12.5 | % | 11.7 | % | |||||||||||||||||
Adjusted used gross profit per retail unit(2) | $ | 1,958 | $ | 1,679 | 16.6 | % | $ | 1,950 | $ | 1,691 | 15.3 | % | |||||||||||||
| SG&A expenses | $ | 192,347 | $ | 159,941 | 20.3 | % | $ | 374,637 | $ | 306,628 | 22.2 | % | |||||||||||||
| SG&A as % revenues | 12.2 | % | 12.2 | % | 12.6 | % | 12.5 | % | |||||||||||||||||
| SG&A as % gross profit | 80.1 | % | 80.6 | % | 80.6 | % | 80.3 | % | |||||||||||||||||
| Operating margin | 2.8 | % | 2.7 | % | 2.7 | % | 2.8 | % | |||||||||||||||||
| Pretax income margin | 1.8 | % | 1.9 | % | 1.7 | % | 1.7 | % | |||||||||||||||||
| Floorplan interest | $ | (10,074 | ) | $ | (5,965 | ) | 68.9 | % | $ | (18,739 | ) | $ | (10,846 | ) | 72.8 | % | |||||||||
| Floorplan assistance | 9,656 | 8,260 | 16.9 | 17,835 | 14,959 | 19.2 | |||||||||||||||||||
| Net floorplan benefit (expense) | $ | (418 | ) | $ | 2,295 | (118.2 | )% | $ | (904 | ) | $ | 4,113 | (122.0 | )% | |||||||||||
| (1) Adjusted used gross margin equals total used vehicle gross profit, which includes net wholesale loss, divided by used vehicle retail sales revenues. The profit or loss on wholesale sales is included in this number, as these transactions facilitate retail vehicle sales and are not expected to generate profit. | ||
| (2) Adjusted used gross profit per retail unit equals total used vehicle gross profit, which includes net wholesale loss, divided by retail used vehicle unit sales. The profit or loss on wholesale sales is included in this number, as these transactions facilitate retail vehicle sales and are not expected to generate profit. |
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, | |||||||||||||||||||||||||
| 2005 | 2004 | % Change | 2005 | 2004 | % Change | |||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||
| New vehicle retail sales | $ | 840,431 | $ | 813,918 | 3.3 | % | $ | 1,515,936 | $ | 1,489,895 | 1.7 | % | ||||||||||||||
| Used vehicle retail sales | 247,894 | 241,342 | 2.7 | 471,565 | 471,997 | (0.1 | ) | |||||||||||||||||||
| Used vehicle wholesale sales | 94,507 | 87,106 | 8.5 | 174,509 | 163,297 | 6.9 | ||||||||||||||||||||
| Total used | 342,401 | 328,448 | 4.2 | 646,074 | 635,294 | 1.7 | ||||||||||||||||||||
| Parts and service | 138,635 | 131,283 | 5.6 | 267,211 | 255,303 | 4.7 | ||||||||||||||||||||
| Finance and insurance | 44,089 | 41,252 | 6.9 | 84,228 | 81,436 | 3.4 | ||||||||||||||||||||
| Total | $ | 1,365,556 | $ | 1,314,901 | 3.9 | % | $ | 2,513,449 | $ | 2,461,928 | 2.1 | % | ||||||||||||||
GROSS MARGIN: | ||||||||||||||||||||||||||
| New vehicle retail sales | 6.8 | % | 7.1 | % | 6.9 | % | 7.1 | % | ||||||||||||||||||
| Used vehicle retail sales | 12.7 | 12.1 | 12.7 | 12.2 | ||||||||||||||||||||||
| Used vehicle wholesale sales | (0.7 | ) | (1.9 | ) | (0.3 | ) | (1.6 | ) | ||||||||||||||||||
| Total used | 9.0 | 8.4 | 9.2 | 8.7 | ||||||||||||||||||||||
| Parts and service | 54.4 | 55.1 | 54.3 | 54.9 | ||||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||||||||||||
| Total | 15.2 | % | 15.1 | % | 15.7 | % | 15.5 | % | ||||||||||||||||||
GROSS PROFIT (LOSS): | ||||||||||||||||||||||||||
| New vehicle retail sales | $ | 57,134 | $ | 57,399 | (0.5 | )% | $ | 105,167 | $ | 105,292 | (0.1 | )% | ||||||||||||||
| Used vehicle retail sales | 31,395 | 29,188 | 7.6 | 60,042 | 57,758 | 4.0 | ||||||||||||||||||||
| Used vehicle wholesale sales | (681 | ) | (1,617 | ) | 57.9 | (532 | ) | (2,597 | ) | 79.5 | ||||||||||||||||
| Total used | 30,714 | 27,571 | 11.4 | 59,510 | 55,161 | 7.9 | ||||||||||||||||||||
| Parts and service | 75,412 | 72,288 | 4.3 | 144,970 | 140,049 | 3.5 | ||||||||||||||||||||
| Finance and insurance | 44,089 | 41,252 | 6.9 | 84,228 | 81,436 | 3.4 | ||||||||||||||||||||
| Total | $ | 207,349 | $ | 198,510 | 4.5 | % | $ | 393,875 | $ | 381,938 | 3.1 | % | ||||||||||||||
UNITS SOLD: | ||||||||||||||||||||||||||
| Retail new vehicles sold | 29,942 | 29,441 | 1.7 | % | 54,028 | 53,873 | 0.3 | % | ||||||||||||||||||
| Retail used vehicles sold | 15,976 | 16,425 | (2.7 | ) | 31,198 | 32,611 | (4.3 | ) | ||||||||||||||||||
| Wholesale used vehicles sold | 12,182 | 11,894 | 2.4 | 22,878 | 22,684 | 0.9 | ||||||||||||||||||||
| Total used | 28,158 | 28,319 | (0.6 | )% | 54,076 | 55,295 | (2.2 | )% | ||||||||||||||||||
GROSS PROFIT (LOSS) PER UNIT SOLD: | ||||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,908 | $ | 1,950 | (2.2 | )% | $ | 1,947 | $ | 1,954 | (0.4 | )% | ||||||||||||||
| Used vehicle retail sales | 1,965 | 1,777 | 10.6 | 1,925 | 1,771 | 8.7 | ||||||||||||||||||||
| Used vehicle wholesale sales | (56 | ) | (136 | ) | 58.8 | (23 | ) | (114 | ) | 79.8 | ||||||||||||||||
| Total used | 1,091 | 974 | 12.0 | 1,100 | 998 | 10.2 | ||||||||||||||||||||
| Finance and insurance (per retail unit) | 960 | 899 | 6.8 | 988 | 942 | 4.9 | ||||||||||||||||||||
OTHER: | ||||||||||||||||||||||||||
Adjusted used gross margin(2) | 12.4 | % | 11.4 | % | 12.6 | % | 11.7 | % | ||||||||||||||||||
Adjusted used gross profit per retail unit(3) | $ | 1,923 | $ | 1,679 | 14.5 | % | $ | 1,907 | $ | 1,691 | 12.8 | % | ||||||||||||||
| SG&A expenses | $ | 166,366 | $ | 159,941 | 4.0 | % | $ | 317,362 | $ | 306,628 | 3.5 | % | ||||||||||||||
| SG&A as % revenues | 12.2 | % | 12.2 | % | 12.6 | % | 12.5 | % | ||||||||||||||||||
| SG&A as % gross profit | 80.2 | % | 80.6 | % | 80.6 | % | 80.3 | % | ||||||||||||||||||
| Operating margin | 2.7 | % | 2.7 | % | 2.7 | % | 2.8 | % | ||||||||||||||||||
| Floorplan interest | $ | (8,842 | ) | $ | (5,965 | ) | 48.2 | % | $ | (15,996 | ) | $ | (10,846 | ) | 47.5 | % | ||||||||||
| Floorplan assistance | 9,089 | 8,260 | 10.0 | 16,333 | 14,959 | 9.2 | ||||||||||||||||||||
| Net floorplan benefit | $ | 247 | $ | 2,295 | (89.2 | )% | $ | 337 | $ | 4,113 | (91.8 | )% | ||||||||||||||
| (1) | Same store amounts include the results for the identical months in each period presented in the comparison, commencing with the first month we owned the dealership and, in the case of dispositions, ending with the last month we owned it. Same store results also include the activities of the corporate office. | |
| (2) | Adjusted used gross margin equals total used vehicle gross profit, which includes net wholesale loss, divided by used vehicle retail sales revenues. The profit or loss on wholesale sales is included in this number, as these transactions facilitate retail vehicle sales and are not expected to generate profit. | |
| (3) | Adjusted used gross profit per retail unit equals total used vehicle gross profit, which includes net wholesale loss, divided by retail used vehicle unit sales. The profit or loss on wholesale sales is included in this number, as these transactions facilitate retail vehicle sales and are not expected to generate profit. |
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 | Diluted Earnings per Share | |||||||||||||||||||||||
| Q2 2005 | Q2 2004 | % Change | Q2 2005 | Q2 2004 | % Change | |||||||||||||||||||
Q2 2005 vs. Q2 2004 RECONCILIATION: | ||||||||||||||||||||||||
| As reported | $ | 18,089 | $ | 15,714 | 15.1 | % | $ | 0.75 | $ | 0.67 | 11.9 | % | ||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| CEO transitional expenses | 1,040 | — | 0.04 | — | ||||||||||||||||||||
Adjusted(1) | $ | 19,129 | $ | 15,714 | 21.7 | % | $ | 0.79 | $ | 0.67 | 17.9 | % | ||||||||||||
| Net Income | Diluted Earnings per Share | |||||||||||||||||||||||
| 2005 | 2004 | % Change | 2005 | 2004 | % Change | |||||||||||||||||||
YTD 2005 vs. YTD 2004 RECONCILIATION: | ||||||||||||||||||||||||
| As reported | $ | 16,451 | $ | 26,201 | (37.2 | )% | $ | 0.69 | $ | 1.12 | (38.4 | )% | ||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Change in accounting principle | 16,038 | — | 0.67 | — | ||||||||||||||||||||
| CEO transitional expenses | 1,040 | — | 0.04 | — | ||||||||||||||||||||
| Loss on redemption of senior subordinated notes | — | 4,011 | — | 0.17 | ||||||||||||||||||||
Adjusted(1) | $ | 33,529 | $ | 30,212 | 11.0 | % | $ | 1.40 | $ | 1.29 | 8.5 | % | ||||||||||||
| (1) | Adjusted net income and adjusted diluted earnings per share means net income or diluted earnings per share, as the case may be, plus the adjustments noted above. We use adjusted net income and adjusted diluted earnings per share 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 and are more reflective of our operating performance. Neither of these measures is a measure of financial performance under GAAP. Accordingly, they should not be considered as substitutes for net income or diluted earnings per share 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 and diluted earnings per share calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations. |