Exhibit 99.1
| NEWS RELEASE | 950 Echo Lane, Suite 100 Houston, TX 77024 |
AT GROUP 1: | President and CEO | Earl J. Hesterberg | (713) 647-5700 | |||
| Senior Vice President and CFO | John C. Rickel | (713) 647-5700 | ||||
| Manager, Investor Relations | Kim Paper Canning | (713) 647-5700 | ||||
AT Fleishman-Hillard: | Investors | John O. Ambler | (713) 513-9513 | |||
AT Pierpont Communications: | Media | Clint L. Woods | (713) 627-2223 |
FOR IMMEDIATE RELEASE
TUESDAY, OCT. 30, 2007
TUESDAY, OCT. 30, 2007
GROUP 1 AUTOMOTIVE REPORTS 2007 THIRD-QUARTER EARNINGS RESULTS
$30 Million Share Repurchase Authorization Completed; Guidance Revised
HOUSTON, Oct. 30, 2007 — Group 1 Automotive, Inc. (NYSE: GPI),a Fortune 500 automotive retailer, today reported net income for the third quarter ended Sept. 30, 2007, of $20.8 million, or $0.90 per diluted share. This compares with net income of $26.4 million, or $1.10 per diluted share, in the third quarter of 2006. The results for the 2007 third quarter include a $1.6 million pretax charge related to the redemption of $36.4 million of Group 1’s 8.25% senior subordinated notes and a $0.3 million pretax charge for the impairment of assets associated with the disposition of a domestic franchise. Excluding these charges, net income for the 2007 third quarter was $0.95 per diluted share.
2007 Third-Quarter Highlights
| • | Revenues grew 3.7 percent with increases in all segments | |
| • | Same-store parts and service gross margin improved 60 basis points to 55.4 percent | |
| • | Same-store finance and insurance gross profit per retail unit increased $117 to $1,078 |
Same-Store Results
Total revenues declined 3.8 percent reflecting declines in new vehicles of 4.1 percent, retail used vehicles of 6.4 percent and wholesale used vehicles of 7.2 percent, partially offset by a 2.5 percent increase in parts and service and a 2.9 percent increase in finance and insurance (F&I) revenues. Overall gross margin remained constant at 15.6 percent, as a 60 basis-point improvement in parts and service gross margin and the continued strong performance in the finance and insurance business were offset by declines in new and used vehicles. Gross profit declined 3.3 percent, to $234.2 million, from $242.1 million in the same period a year ago.
Total revenues declined 3.8 percent reflecting declines in new vehicles of 4.1 percent, retail used vehicles of 6.4 percent and wholesale used vehicles of 7.2 percent, partially offset by a 2.5 percent increase in parts and service and a 2.9 percent increase in finance and insurance (F&I) revenues. Overall gross margin remained constant at 15.6 percent, as a 60 basis-point improvement in parts and service gross margin and the continued strong performance in the finance and insurance business were offset by declines in new and used vehicles. Gross profit declined 3.3 percent, to $234.2 million, from $242.1 million in the same period a year ago.
New vehicle revenues and margin declines reflect increasingly soft market conditions for volume brands. Ford sales declined 20 percent for the quarter versus the prior year and downward margin pressure was experienced across most volume brands, both import and domestic. Improvements in luxury brands were a partial offset. Used vehicle retail revenues and margins were adversely affected by lower trade-in volume and weaker truck sales as increased manufacturer incentives on new vehicles, especially in those Group 1 markets where trucks are traditionally strong, affected used vehicle demand. The 2.5 percent increase in parts and service revenues reflects continued growth in the customer-pay and wholesale parts businesses, partially offset by reductions in warranty-related and collision revenues. Finance and insurance gross profit per retail unit improved $117, to $1,078, from the third quarter of 2006 as a result of initiatives the company began implementing in April of this year. Included in these actions is an enhanced cost structure for many of the company’s vehicle service contract and insurance offerings.
Group 1 Automotive, Inc.
Third-quarter selling, general and administrative expenses (SG&A) grew $1.5 million or 0.8 percent, to $181.6 million, from the third quarter of 2006.
Consolidated Results
Third-quarter total revenues increased 3.7 percent, to $1.7 billion, from the previous-year quarter. Gross profit improved 3.0 percent, to $257.3 million, however, gross margin declined 10 basis points, to 15.5 percent, as margin improvements in parts and service only partially offset the margin declines in new and used retail vehicles.
Third-quarter total revenues increased 3.7 percent, to $1.7 billion, from the previous-year quarter. Gross profit improved 3.0 percent, to $257.3 million, however, gross margin declined 10 basis points, to 15.5 percent, as margin improvements in parts and service only partially offset the margin declines in new and used retail vehicles.
Selling, general and administrative expenses increased 5.5 percent, to $198.4 million, from the prior-year quarter.
“Increasingly challenging market conditions exerted significant downward pressure on vehicle sales and margins at most of our volume brand dealerships during the third quarter,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “A 20 percent decrease in Ford sales, a major reduction in the gross margin of our major domestic and import volume brands and pressure on the full-size truck used vehicle market could not be offset by improvements in our parts and service and finance and insurance businesses.”
Share Repurchase Authorization Completed
During the third quarter, Group 1 completed its August 2007 authorization to repurchase $30 million of its common stock. The company repurchased 1.3 million shares of its common stock at an average price per share of $35.28 during the third quarter of 2007.
During the third quarter, Group 1 completed its August 2007 authorization to repurchase $30 million of its common stock. The company repurchased 1.3 million shares of its common stock at an average price per share of $35.28 during the third quarter of 2007.
Disposition Update
Group 1 recently disposed of five additional franchises with trailing-twelve-month revenues of $54.5 million. Including these dispositions, the company has divested of 15 franchises in 2007 with twelve-month revenues of $154.8 million.
Group 1 recently disposed of five additional franchises with trailing-twelve-month revenues of $54.5 million. Including these dispositions, the company has divested of 15 franchises in 2007 with twelve-month revenues of $154.8 million.
Group 1 will continue to evaluate its dealership portfolio and dispose of underperforming stores and focus its acquisitions on import and luxury brands outside of Texas and Oklahoma.
Group 1 anticipates incurring approximately $5 million to $10 million in associated disposition charges in 2007, which includes costs associated with disposition actions previously announced in 2007. Year to date, the company has booked $5.0 million toward this estimate.
2007 Full-Year Guidance
Group 1 revised its 2007 full-year guidance to $3.45 to $3.60 per diluted share, from $3.75 to $4.05, based on its outlook and the following revised assumptions:
Group 1 revised its 2007 full-year guidance to $3.45 to $3.60 per diluted share, from $3.75 to $4.05, based on its outlook and the following revised assumptions:
| • | Industry seasonally adjusted annual sales rate (SAAR) of 16.0 million vehicles | ||
| • | Negative same-store revenue growth of two percent to three percent | ||
| • | A 100-125 basis-point increase in SG&A as a percent of gross margin from 2006 levels excluding one-time items, as lower gross profits offset cost improvements | ||
| • | Flat interest rates throughout 2007 | ||
| • | Tax rate of 36.5 percent | ||
| • | Estimated average diluted shares outstanding of 23.4 million | ||
| • | Guidance excludes the impact of future acquisitions, dispositions with related exit charges estimated at $5 million to $10 million and any potential asset impairment charges, including those that may result as the company undertakes its required annual review of goodwill and intangible franchise rights during the fourth quarter |
Group 1 Automotive, Inc.
Third-Quarter Earnings Release and Conference Call
A conference call to discuss third-quarter financial results and Group 1’s 2007 outlook and strategy will be held at 10 a.m. EST on Tuesday, Oct. 30.
A conference call to discuss third-quarter financial results and Group 1’s 2007 outlook and strategy will be held at 10 a.m. EST on Tuesday, Oct. 30.
The conference call will be simulcast live on the Internet at www.group1auto.com through the Investor Relations section. A replay will be available for 30 days.
The conference call will also be available live by dialing in 10 minutes prior to the call at: 800-240-5318 (domestic) or 303-205-0033 (international).
A telephonic replay will be available following the call through Nov. 6, by dialing: 800-405-2236 (domestic) or 303-590-3000 (international), with passcode: 11098952#.
About Group 1 Automotive, Inc.
Group 1 owns and operates 96 automotive dealerships, 131 franchises, and 24 collision service centers in the United States and three dealerships, six franchises and two collision centers in the United Kingdom that offer 31 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts.
Group 1 owns and operates 96 automotive dealerships, 131 franchises, and 24 collision service centers in the United States and three dealerships, six franchises and two collision centers in the United Kingdom that offer 31 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts.
Group 1 Automotive can be reached on the Internet at www.group1auto.com.
This press release contains “forward-looking statements,” which are statements related to future, not past, events. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks” or “will.” Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. These factors, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K under the headings “Business—Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We urge you to carefully consider this information. We undertake no duty to update our forward-looking statements, including our earnings outlook.
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, | ||||||||||||||||||||||||
| 2007 | 2006 | % Change | 2007 | 2006 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,042,442 | $ | 1,009,300 | 3.3 | % | $ | 3,031,117 | $ | 2,837,827 | 6.8 | % | |||||||||||||
| Used vehicle retail sales | 298,257 | 292,931 | 1.8 | 894,745 | 848,611 | 5.4 | |||||||||||||||||||
| Used vehicle wholesale sales | 86,833 | 83,264 | 4.3 | 244,889 | 251,010 | (2.4 | ) | ||||||||||||||||||
| Parts and service | 179,416 | 165,296 | 8.5 | 534,590 | 492,803 | 8.5 | |||||||||||||||||||
| Finance and insurance | 54,357 | 51,021 | 6.5 | 158,291 | 146,172 | 8.3 | |||||||||||||||||||
| Total revenues | 1,661,305 | 1,601,812 | 3.7 | % | 4,863,632 | 4,576,423 | 6.3 | % | |||||||||||||||||
COST OF SALES: | |||||||||||||||||||||||||
| New vehicle retail sales | 972,547 | 937,629 | 3.7 | % | 2,826,331 | 2,631,330 | 7.4 | % | |||||||||||||||||
| Used vehicle retail sales | 263,717 | 254,648 | 3.6 | 787,074 | 738,160 | 6.6 | |||||||||||||||||||
| Used vehicle wholesale sales | 88,304 | 84,757 | 4.2 | 245,836 | 252,254 | (2.5 | ) | ||||||||||||||||||
| Parts and service | 79,482 | 74,930 | 6.1 | 242,005 | 224,345 | 7.9 | |||||||||||||||||||
| Total cost of sales | 1,404,050 | 1,351,964 | 3.9 | % | 4,101,246 | 3,846,089 | 6.6 | % | |||||||||||||||||
| GROSS PROFIT | 257,255 | 249,848 | 3.0 | % | 762,386 | 730,334 | 4.4 | % | |||||||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 198,368 | 188,043 | 5.5 | % | 593,304 | 551,463 | 7.6 | % | |||||||||||||||||
| DEPRECIATION AND AMORTIZATION EXPENSE | 5,506 | 4,449 | 23.8 | % | 15,571 | 13,384 | 16.3 | % | |||||||||||||||||
| ASSET IMPAIRMENTS | 345 | — | — | % | 701 | — | — | % | |||||||||||||||||
| INCOME FROM OPERATIONS | 53,036 | 57,356 | (7.5 | )% | 152,810 | 165,487 | (7.7 | )% | |||||||||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||||||||||||
| Floorplan interest expense | (11,842 | ) | (10,065 | ) | 17.7 | % | (35,882 | ) | (34,943 | ) | 2.7 | % | |||||||||||||
| Other interest expense, net | (6,380 | ) | (5,366 | ) | 18.9 | (18,417 | ) | (13,353 | ) | 37.9 | |||||||||||||||
| Other income (expense), net | (1,410 | ) | (122 | ) | 1,055.7 | (1,218 | ) | (367 | ) | 231.9 | |||||||||||||||
| INCOME BEFORE INCOME TAXES | 33,404 | 41,803 | (20.1 | )% | 97,293 | 116,824 | (16.7 | )% | |||||||||||||||||
| PROVISION FOR INCOME TAXES | 12,588 | 15,383 | (18.2 | )% | 34,814 | 43,221 | (19.5 | )% | |||||||||||||||||
NET INCOME | $ | 20,816 | $ | 26,420 | (21.2 | )% | $ | 62,479 | $ | 73,603 | (15.1 | )% | |||||||||||||
DILUTED EARNINGS PER SHARE: | $ | 0.90 | $ | 1.10 | (18.2 | )% | $ | 2.63 | $ | 3.01 | (12.6 | )% | |||||||||||||
| Weighted average diluted shares outstanding | 23,229 | 24,009 | (3.2 | )% | 23,730 | 24,432 | (2.9 | )% | |||||||||||||||||
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
Consolidated Balance Sheets
(Dollars in thousands)
| September 30, | December 31, | |||||||||||
| 2007 | 2006 | % Change | ||||||||||
ASSETS: | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 78,579 | $ | 39,313 | 99.9 | % | ||||||
| Contracts in transit and vehicle receivables, net | 158,965 | 189,004 | (15.9 | ) | ||||||||
| Accounts and notes receivable, net | 81,192 | 76,793 | 5.7 | |||||||||
| Inventories | 793,563 | 830,628 | (4.5 | ) | ||||||||
| Deferred income taxes | 20,132 | 17,176 | 17.2 | |||||||||
| Prepaid expenses and other current assets | 12,558 | 25,098 | (50.0 | ) | ||||||||
| Total current assets | 1,144,989 | 1,178,012 | (2.8 | ) | ||||||||
| PROPERTY AND EQUIPMENT, net | 380,162 | 230,385 | 65.0 | |||||||||
| GOODWILL AND OTHER INTANGIBLES | 706,517 | 676,325 | 4.5 | |||||||||
| OTHER ASSETS | 25,728 | 29,233 | (12.0 | ) | ||||||||
| Total assets | $ | 2,257,396 | $ | 2,113,955 | 6.8 | % | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Floorplan notes payable — credit facility | $ | 598,167 | $ | 437,288 | 36.8 | % | ||||||
| Floorplan notes payable — manufacturer affiliates | 143,044 | 287,978 | (50.3 | ) | ||||||||
| Current maturities of long-term debt | 11,350 | 854 | 1,229.0 | |||||||||
| Accounts payable | 134,719 | 117,536 | 14.6 | |||||||||
| Accrued expenses | 108,622 | 97,302 | 11.6 | |||||||||
| Total current liabilities | 995,902 | 940,958 | 5.8 | |||||||||
| 2.25% CONVERTIBLE SENIOR NOTES | 281,767 | 281,328 | 0.2 | |||||||||
| 8.25% SENIOR SUBORDINATED NOTES | 100,180 | 135,248 | (25.9 | ) | ||||||||
| MORTGAGE FACILITY, net of current maturities | 107,633 | — | — | |||||||||
| OTHER LONG-TERM DEBT, net of current maturities | 19,771 | 12,063 | 63.9 | |||||||||
| DEFERRED INCOME TAXES | 17,662 | 2,787 | 533.7 | |||||||||
| OTHER LIABILITIES | 29,111 | 27,826 | 4.6 | |||||||||
| Total liabilities before deferred revenues | 1,552,026 | 1,400,210 | 10.8 | |||||||||
| DEFERRED REVENUES | 17,224 | 20,905 | (17.6 | ) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||||||
| Common stock | 253 | 252 | 0.4 | |||||||||
| Additional paid-in capital | 294,478 | 292,278 | 0.8 | |||||||||
| Retained earnings | 500,417 | 448,115 | 11.7 | |||||||||
| Accumulated other comprehensive income (loss) | (1,434 | ) | 591 | (342.6 | ) | |||||||
| Treasury stock | (105,568 | ) | (48,396 | ) | 118.1 | |||||||
| Total stockholders’ equity | 688,146 | 692,840 | (0.7 | ) | ||||||||
| Total liabilities and stockholders’ equity | $ | 2,257,396 | $ | 2,113,955 | 6.8 | % | ||||||
BALANCE SHEET DATA: | ||||||||||||
| Working capital | $ | 149,087 | $ | 237,054 | (37.1 | )% | ||||||
| Current ratio | 1.15 | 1.25 | (8.0 | ) | ||||||||
| Long-term debt to capitalization | 43 | % | 38 | % | ||||||||
| Excluding Mortgage Facility | 37 | % | 38 | % | ||||||||
Inventory days supply:(1) New vehicle | 55 | 63 | (12.7 | )% | ||||||||
| Used vehicle | 31 | 31 | — | |||||||||
| (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 | Nine Months Ended, | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||||
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: | ||||||||||||||||||
Region | Geographic Market | |||||||||||||||||
| Eastern | Massachusetts | 12.8 | % | 12.7 | % | 12.1 | % | 12.9 | % | |||||||||
| New Jersey | 5.5 | 2.5 | 5.4 | 2.7 | ||||||||||||||
| Louisiana | 3.9 | 4.5 | 3.8 | 5.4 | ||||||||||||||
| New Hampshire | 3.8 | 4.0 | 3.7 | 3.9 | ||||||||||||||
| Georgia | 3.7 | 3.9 | 3.6 | 3.9 | ||||||||||||||
| Florida | 3.3 | 4.6 | 3.5 | 4.8 | ||||||||||||||
| New York | 2.6 | 2.2 | 2.5 | 2.3 | ||||||||||||||
| Mississippi | 1.5 | 0.6 | 1.5 | 0.2 | ||||||||||||||
| Alabama | 0.7 | 0.4 | 0.9 | 0.1 | ||||||||||||||
| 37.8 | 35.4 | 37.0 | 36.2 | |||||||||||||||
| Central | Texas | 31.7 | 32.9 | 31.2 | 33.8 | |||||||||||||
| Oklahoma | 9.8 | 11.2 | 9.8 | 10.8 | ||||||||||||||
| New Mexico | 1.9 | 2.3 | 1.9 | 2.1 | ||||||||||||||
| Kansas | 1.0 | — | 1.0 | — | ||||||||||||||
| Colorado | — | 0.1 | — | 0.3 | ||||||||||||||
| 44.4 | 46.5 | 43.9 | 47.0 | |||||||||||||||
| Western | California | 16.1 | 18.1 | 17.6 | 16.8 | |||||||||||||
| International | United Kingdom | 1.7 | — | 1.5 | — | |||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
NEW VEHICLE UNIT SALES BRAND MIX: | ||||||||||||||||||
| Toyota/Scion/Lexus | 37.1 | % | 37.8 | % | 36.1 | % | 35.7 | % | ||||||||||
| Ford | 12.3 | 15.4 | 12.7 | 16.1 | ||||||||||||||
| Nissan/Infiniti | 12.0 | 11.5 | 12.3 | 10.7 | ||||||||||||||
| Honda/Acura | 12.4 | 9.7 | 12.1 | 9.7 | ||||||||||||||
| Chrysler | 8.2 | 8.9 | 8.2 | 9.8 | ||||||||||||||
| GM | 6.4 | 7.7 | 6.5 | 8.1 | ||||||||||||||
| BMW/Mini | 6.6 | 3.1 | 6.3 | 3.5 | ||||||||||||||
| Daimler | 2.7 | 2.9 | 2.8 | 3.0 | ||||||||||||||
| Other | 2.3 | 3.0 | 3.0 | 3.4 | ||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
NEW VEHICLE UNIT OTHER MIX: | ||||||||||||||||||
| Import | 55.8 | % | 54.7 | % | 55.3 | % | 52.0 | % | ||||||||||
| Domestic | 24.8 | 29.6 | 25.3 | 31.6 | ||||||||||||||
| Luxury | 19.4 | 15.7 | 19.4 | 16.4 | ||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| Car | 54.1 | % | 49.9 | % | 53.6 | % | 49.4 | % | ||||||||||
| Truck | 45.9 | 50.1 | 46.4 | 50.6 | ||||||||||||||
| 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, | ||||||||||||||||||||||||
| 2007 | 2006 | % Change | 2007 | 2006 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,042,442 | $ | 1,009,300 | 3.3 | % | $ | 3,031,117 | $ | 2,837,827 | 6.8 | % | |||||||||||||
| Used vehicle retail sales | 298,257 | 292,931 | 1.8 | 894,745 | 848,611 | 5.4 | |||||||||||||||||||
| Used vehicle wholesale sales | 86,833 | 83,264 | 4.3 | 244,889 | 251,010 | (2.4 | ) | ||||||||||||||||||
| Total used | 385,090 | 376,195 | 2.4 | 1,139,634 | 1,099,621 | 3.6 | |||||||||||||||||||
| Parts and service | 179,416 | 165,296 | 8.5 | 534,590 | 492,803 | 8.5 | |||||||||||||||||||
| Finance and insurance | 54,357 | 51,021 | 6.5 | 158,291 | 146,172 | 8.3 | |||||||||||||||||||
| Total | $ | 1,661,305 | $ | 1,601,812 | 3.7 | % | $ | 4,863,632 | $ | 4,576,423 | 6.3 | % | |||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||||
| New vehicle retail sales | 6.7 | % | 7.1 | % | 6.8 | % | 7.3 | % | |||||||||||||||||
| Used vehicle retail sales | 11.6 | 13.1 | 12.0 | 13.0 | |||||||||||||||||||||
| Used vehicle wholesale sales | (1.7 | ) | (1.8 | ) | (0.4 | ) | (0.5 | ) | |||||||||||||||||
| Total used | 8.6 | 9.8 | 9.4 | 9.9 | |||||||||||||||||||||
| Parts and service | 55.7 | 54.7 | 54.7 | 54.5 | |||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
| Total | 15.5 | % | 15.6 | % | 15.7 | % | 16.0 | % | |||||||||||||||||
GROSS PROFIT: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 69,895 | $ | 71,671 | (2.5 | )% | $ | 204,786 | $ | 206,497 | (0.8 | )% | |||||||||||||
| Used vehicle retail sales | 34,540 | 38,283 | (9.8 | ) | 107,671 | 110,451 | (2.5 | ) | |||||||||||||||||
| Used vehicle wholesale sales | (1,471 | ) | (1,493 | ) | 1.5 | (947 | ) | (1,244 | ) | 23.9 | |||||||||||||||
| Total used | 33,069 | 36,790 | (10.1 | ) | 106,724 | 109,207 | (2.3 | ) | |||||||||||||||||
| Parts and service | 99,934 | 90,366 | 10.6 | 292,585 | 268,458 | 9.0 | |||||||||||||||||||
| Finance and insurance | 54,357 | 51,021 | 6.5 | 158,291 | 146,172 | 8.3 | |||||||||||||||||||
| Total | $ | 257,255 | $ | 249,848 | 3.0 | % | $ | 762,386 | $ | 730,334 | 4.4 | % | |||||||||||||
UNITS SOLD: | |||||||||||||||||||||||||
| Retail new vehicles sold | 34,863 | 35,182 | (0.9 | )% | 101,412 | 97,593 | 3.9 | % | |||||||||||||||||
| Retail used vehicles sold | 17,011 | 18,064 | (5.8 | ) | 52,027 | 51,876 | 0.3 | ||||||||||||||||||
| Wholesale used vehicles sold | 12,361 | 12,211 | 1.2 | 35,293 | 34,623 | 1.9 | |||||||||||||||||||
| Total used | 29,372 | 30,275 | (3.0 | )% | 87,320 | 86,499 | 0.9 | % | |||||||||||||||||
GROSS PROFIT PER UNIT SOLD: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 2,005 | $ | 2,037 | (1.6 | )% | $ | 2,019 | $ | 2,116 | (4.6 | )% | |||||||||||||
| Used vehicle retail sales | 2,030 | 2,119 | (4.2 | ) | 2,070 | 2,129 | (2.8 | ) | |||||||||||||||||
| Used vehicle wholesale sales | (119 | ) | (122 | ) | 2.5 | (27 | ) | (36 | ) | 25.0 | |||||||||||||||
| Total used | 1,126 | 1,215 | (7.3 | ) | 1,222 | 1,263 | (3.2 | ) | |||||||||||||||||
| Finance and insurance (per retail unit) | 1,048 | 958 | 9.4 | 1,032 | 978 | 5.5 | |||||||||||||||||||
OTHER: | |||||||||||||||||||||||||
| SG&A expenses | $ | 198,368 | $ | 188,043 | 5.5 | % | $ | 593,304 | $ | 551,463 | 7.6 | % | |||||||||||||
| SG&A as % revenues | 11.9 | % | 11.7 | % | 12.2 | % | 12.1 | % | |||||||||||||||||
| SG&A as % gross profit | 77.1 | % | 75.3 | % | 77.8 | % | 75.5 | % | |||||||||||||||||
| Operating margin | 3.2 | % | 3.6 | % | 3.1 | % | 3.6 | % | |||||||||||||||||
| Pretax income margin | 2.0 | % | 2.6 | % | 2.0 | % | 2.6 | % | |||||||||||||||||
| Floorplan interest | $ | (11,842 | ) | $ | (10,065 | ) | 17.7 | % | $ | (35,882 | ) | $ | (34,943 | ) | 2.7 | % | |||||||||
| Floorplan assistance | 10,263 | 10,365 | (1.0 | ) | 29,297 | 28,527 | 2.7 | ||||||||||||||||||
| Net floorplan (expense) income | $ | (1,579 | ) | $ | 300 | (626.3 | )% | $ | (6,585 | ) | $ | (6,416 | ) | 2.6 | % | ||||||||||
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, | ||||||||||||||||||||||||
| 2007 | 2006 | % Change | 2007 | 2006 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 944,950 | $ | 985,571 | (4.1 | )% | $ | 2,697,261 | $ | 2,774,048 | (2.8 | )% | |||||||||||||
| Used vehicle retail sales | 262,935 | 280,974 | (6.4 | ) | 784,594 | 812,069 | (3.4 | ) | |||||||||||||||||
| Used vehicle wholesale sales | 74,262 | 80,062 | (7.2 | ) | 208,417 | 240,776 | (13.4 | ) | |||||||||||||||||
| Total used | 337,197 | 361,036 | (6.6 | ) | 993,011 | 1,052,845 | (5.7 | ) | |||||||||||||||||
| Parts and service | 163,270 | 159,306 | 2.5 | 483,310 | 472,170 | 2.4 | |||||||||||||||||||
| Finance and insurance | 51,080 | 49,623 | 2.9 | 147,109 | 142,064 | 3.6 | |||||||||||||||||||
| Total | $ | 1,496,497 | $ | 1,555,536 | (3.8 | )% | $ | 4,320,691 | $ | 4,441,127 | (2.7 | )% | |||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||||
| New vehicle retail sales | 6.6 | % | 7.1 | % | 6.7 | % | 7.3 | % | |||||||||||||||||
| Used vehicle retail sales | 11.9 | 13.0 | 12.4 | 13.0 | |||||||||||||||||||||
| Used vehicle wholesale sales | (1.6 | ) | (1.5 | ) | (0.5 | ) | (0.3 | ) | |||||||||||||||||
| Total used | 8.9 | 9.8 | 9.7 | 9.9 | |||||||||||||||||||||
| Parts and service | 55.4 | 54.8 | 54.4 | 54.7 | |||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
| Total | 15.6 | % | 15.6 | % | 15.9 | % | 15.9 | % | |||||||||||||||||
GROSS PROFIT: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 62,627 | $ | 69,695 | (10.1 | )% | $ | 180,551 | $ | 201,621 | (10.5 | )% | |||||||||||||
| Used vehicle retail sales | 31,207 | 36,609 | (14.8 | ) | 97,016 | 105,325 | (7.9 | ) | |||||||||||||||||
| Used vehicle wholesale sales | (1,212 | ) | (1,163 | ) | (4.2 | ) | (1,099 | ) | (647 | ) | (69.9 | ) | |||||||||||||
| Total used | 29,995 | 35,446 | (15.4 | ) | 95,917 | 104,678 | (8.4 | ) | |||||||||||||||||
| Parts and service | 90,478 | 87,291 | 3.7 | 263,161 | 258,415 | 1.8 | |||||||||||||||||||
| Finance and insurance | 51,080 | 49,623 | 2.9 | 147,109 | 142,064 | 3.6 | |||||||||||||||||||
| Total | $ | 234,180 | $ | 242,055 | (3.3 | )% | $ | 686,738 | $ | 706,778 | (2.8 | )% | |||||||||||||
UNITS SOLD: | |||||||||||||||||||||||||
| Retail new vehicles sold | 31,929 | 34,365 | (7.1 | )% | 90,475 | 95,326 | (5.1 | )% | |||||||||||||||||
| Retail used vehicles sold | 15,456 | 17,278 | (10.5 | ) | 46,600 | 49,501 | (5.9 | ) | |||||||||||||||||
| Wholesale used vehicles sold | 11,024 | 11,728 | (6.0 | ) | 31,097 | 33,203 | (6.3 | ) | |||||||||||||||||
| Total used | 26,480 | 29,006 | (8.7 | )% | 77,697 | 82,704 | (6.1 | )% | |||||||||||||||||
GROSS PROFIT PER UNIT SOLD: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,961 | $ | 2,028 | (3.3 | )% | $ | 1,996 | $ | 2,115 | (5.6 | )% | |||||||||||||
| Used vehicle retail sales | 2,019 | 2,119 | (4.7 | ) | 2,082 | 2,128 | (2.2 | ) | |||||||||||||||||
| Used vehicle wholesale sales | (110 | ) | (99 | ) | (11.1 | ) | (35 | ) | (19 | ) | (84.2 | ) | |||||||||||||
| Total used | 1,133 | 1,222 | (7.3 | ) | 1,235 | 1,266 | (2.4 | ) | |||||||||||||||||
| Finance and insurance (per retail unit) | 1,078 | 961 | 12.2 | 1,073 | 981 | 9.4 | |||||||||||||||||||
OTHER: | |||||||||||||||||||||||||
| SG&A expenses | $ | 181,649 | $ | 180,128 | 0.8 | % | $ | 534,190 | $ | 529,946 | 0.8 | % | |||||||||||||
| SG&A as % revenues | 12.1 | % | 11.6 | % | 12.4 | % | 11.9 | % | |||||||||||||||||
| SG&A as % gross profit | 77.6 | % | 74.4 | % | 77.8 | % | 75.0 | % | |||||||||||||||||
| Operating margin | 3.2 | % | 3.7 | % | 3.2 | % | 3.7 | % | |||||||||||||||||
| Floorplan interest | $ | (10,581 | ) | $ | (9,469 | ) | 11.7 | % | $ | (31,797 | ) | $ | (33,253 | ) | (4.4 | )% | |||||||||
| Floorplan assistance | 9,680 | 10,009 | (3.3 | ) | 27,036 | 27,620 | (2.1 | ) | |||||||||||||||||
| Net floorplan (expense) income | $ | (901 | ) | $ | 540 | (266.9 | )% | $ | (4,761 | ) | $ | (5,633 | ) | (15.5 | )% | ||||||||||
| (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 our corporate office. |
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
NET INCOME RECONCILIATION:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2007 | 2006 | % Change | 2007 | 2006 | % Change | ||||||||||||||||||||
| As reported | $ | 20,816 | $ | 26,420 | (21.2 | )% | $ | 62,479 | $ | 73,603 | (15.1 | )% | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Lease Terminations | 57 | — | 2,823 | — | |||||||||||||||||||||
| Asset impairments | 215 | — | 450 | — | |||||||||||||||||||||
| Loss on bond redemption | 995 | 127 | 995 | 307 | |||||||||||||||||||||
Adjusted (1) | $ | 22,083 | $ | 26,420 | (16.4 | )% | $ | 66,747 | $ | 73,603 | (9.3 | )% | |||||||||||||
DILUTED EARNINGS PER SHARE RECONCILIATION:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2007 | 2006 | % Change | 2007 | 2006 | % Change | ||||||||||||||||||||
| As reported | $ | 0.90 | $ | 1.10 | (18.2 | )% | $ | 2.63 | $ | 3.01 | (12.6 | )% | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Lease Terminations | — | — | 0.12 | — | |||||||||||||||||||||
| Asset impairments | 0.01 | — | 0.02 | — | |||||||||||||||||||||
| Loss on bond redemption | 0.04 | — | 0.04 | — | |||||||||||||||||||||
Adjusted (1) | $ | 0.95 | $ | 1.10 | (13.6 | )% | $ | 2.81 | $ | 3.01 | (6.6 | )% | |||||||||||||
| (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. |