| N E W S R E L E A S E |  |
| 800 Gessner• Suite 500• Houston, TX 77024 |
AT GROUP 1: | President and CEO | Earl J. Hesterberg | (713) 647-5700 | |||
| Senior Vice President and CFO | John C. Rickel | (713) 647-5700 | ||||
| Manager, Investor Relations | Kim Paper Canning | (713) 647-5700 | ||||
AT Fleishman-Hillard: | Investors | John Roper | (713) 513-9505 | |||
AT Pierpont Communications: | Media | Clint L. Woods | (713) 627-2223 | |||
FOR IMMEDIATE RELEASE
TUESDAY, JULY 29, 2008
TUESDAY, JULY 29, 2008
GROUP 1 AUTOMOTIVE REPORTS SECOND-QUARTER 2008 FINANCIAL RESULTS
Earnings Guidance / Acquisition and CapEx Targets Revised
HOUSTON, July 29, 2008 — Group 1 Automotive, Inc. (NYSE: GPI),a Fortune 500 automotive retailer, today reported 2008 second-quarter net income from continuing operations of $18.5 million, or $0.82 per diluted share. This compares to net income of $24.3 million, or $1.02 per diluted share, in the second quarter of 2007. The results in both periods include lease termination and asset impairment charges related to franchise disposals. Excluding the lease termination charge, second-quarter net income from continuing operations was $19.0 million, or $0.84 per diluted share.
Second-quarter 2008 same-store revenues fell 7.1 percent, to $1.5 billion. This decline is primarily due to an 8.2 percent reduction in new vehicle unit sales that resulted in 9.9 percent lower new vehicle revenues, as well as a 5.8 percent decrease in total used vehicle revenues. Retail used vehicle unit sales fell 2.4 percent resulting in a 2.0 percent revenue decline. Consistent with Group 1’s strategy of reducing its low-margin used vehicle wholesale business, wholesale used vehicle revenues were 19.7 percent lower as the company wholesaled 13.4 percent fewer vehicles. These declines more than offset a 4.8 percent increase in parts and service revenues, as well as a 0.6 percent increase in finance and insurance (F&I) revenues. The growth in parts and service reflected improvements in all areas of this business. The revenue increase in F&I was realized despite a 6.3 percent retail unit sales decline as lower product costs and improved penetration more than offset the volume decline.
Same-store gross margin improved 60 basis points, to 15.9 percent, from the second quarter of 2007. The gross margin increase reflected an increase in the mix of the higher-margin parts and service and F&I business, partially offset by lower margins in new and used vehicles.
On a consolidated basis, selling, general and administrative (SG&A) expenses as a percent of gross profit increased 160 basis points, to 77.7 percent, as gross profit was down slightly and SG&A expenses grew 1.7 percent, or $3.3 million, from the prior-year period. The increase in absolute expenses is more than explained by acquisitions.
“The challenges of the new vehicle retail market became even more severe in the second quarter, but our performance in the other areas of our business — used vehicles, parts and service, and finance and insurance — substantially tempered the financial impact of reduced new vehicle sales,” said Earl J. Hesterberg, Group 1’s president and chief executive officer. “The strategic initiatives we launched two years ago, that were focused on
Group 1 Automotive, Inc.
the higher-margin used vehicle, parts and service, and finance and insurance businesses, are delivering the desired results and providing meaningful benefits during this period of weaker new vehicle sales.”
For the six-month period, Group 1 reported net income from continuing operations of $35.6 million, or $1.57 per diluted share. On a comparable basis, excluding lease termination and asset impairment charges related to franchise disposals for both periods, six-month net income from continuing operations in 2008 was $36.1 million, or $1.59 per diluted share, compared to $45.0 million, or $1.88, in the 2007 period. Six-month same-store revenues were down 5.3 percent to $2.9 billion, reflecting decreases in new vehicle and wholesale used vehicle sales, partially offset by increases in all other aspects of the business. Total same-store gross margin also improved to 16.2 percent from 15.7 percent in the prior-year period.
2008 Acquisition Target Revised / Corporate Development Update
In light of the more challenging economic conditions, Group 1 has lowered its 2008 acquisition revenue target to $200 million from $300 million.
In light of the more challenging economic conditions, Group 1 has lowered its 2008 acquisition revenue target to $200 million from $300 million.
In June, Group 1 acquired Chrysler and Jeep franchises that will operate out of its existing Dodge dealership in the Austin, Texas, market. The two franchises are estimated to generate $7.7 million in annual revenues and will complete the “Alpha” configuration which includes all three Chrysler brands under one roof, as desired by Chrysler LLC. Year to date, Group 1 has acquired a total of five franchises expected to generate $90.2 million in estimated annual revenues toward its revised $200 million acquisition target.
In addition, Group 1 disposed of nine franchises in the second quarter with 12-month revenues of $128.8 million. These dispositions include the sale on June 30 of all seven of Group 1’s franchises in New Mexico. The financial results associated with the New Mexico operations have been categorized in the second-quarter financial reporting as “discontinued operations,” as the disposition of these six domestic franchises (Chevrolet, Pontiac, Buick, GMC, Chrysler and Jeep) and one import franchise (Mitsubishi) represents Group 1’s withdrawal from the New Mexico market. Additionally, Group 1 closed a Ford dealership in Florida and a Volkswagen dealership in South Carolina in the second quarter.
The company also announced that it disposed of four franchises (Pontiac, Buick, GMC and Cadillac) in Beaumont, Texas, in late July.
2008 Full-Year Guidance and Outlook Revised
Group 1 revised its 2008 full-year guidance from continuing operations to a range of $2.65 to $2.95 based on its outlook and the following assumptions:
Group 1 revised its 2008 full-year guidance from continuing operations to a range of $2.65 to $2.95 based on its outlook and the following assumptions:
| • | Industry seasonally adjusted annual sales rate (SAAR) of 14.0 to 14.5 million vehicles | ||
| • | Same-store revenues six to seven percent lower | ||
| • | SG&A expenses as a percent of gross profit at 78 percent to 79 percent, excluding any one-time items, as lower sales revenues are expected to offset cost improvements | ||
| • | Libor interest rates at current levels throughout 2008 | ||
| • | Tax rate of 38 to 38.5 percent | ||
| • | Estimated average diluted shares outstanding of 22.8 million | ||
| • | Guidance excludes the impact of future acquisitions and dispositions, as well as the potential related one-time costs estimated at $10 million to $15 million. |
In addition, Group 1 announced that it has lowered its 2008 full-year capital expenditure projection to approximately $55 million from $60 million.
Group 1 Automotive, Inc.
Second-Quarter Earnings Conference Call
Group 1’s senior management will host a conference call today at 10 a.m. EDT to discuss the second-quarter financial results and the company’s outlook and strategy.
Group 1’s senior management will host a conference call today at 10 a.m. EDT to discuss the second-quarter financial results and the company’s outlook and strategy.
The conference call will be simulcast live on the Internet at www.group1auto.com through the Investor Relations section. A replay will be available for 30 days.
The conference call will also be available live by dialing in 10 minutes prior to the start of the call at: 800-257-3401 (domestic) or 303-275-2170 (international).
A telephonic replay will be available following the call through Aug. 5 by dialing: 800-405-2236 (domestic) or 303-590-3000 (international) with passcode 11117356#.
About Group 1 Automotive Inc.
Group 1 owns and operates 100 automotive dealerships, 134 franchises, and 26 collision service centers in the United States and the United Kingdom that offer 31 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts.
Group 1 owns and operates 100 automotive dealerships, 134 franchises, and 26 collision service centers in the United States and the United Kingdom that offer 31 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts.
Group 1 Automotive can be reached on the Internet at www.group1auto.com.
This press release contains “forward-looking statements,” which are statements related to future, not past, events. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks” or “will.” Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. These factors, as well as additional factors that could affect our forward-looking statements, are described in ourForm 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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 971,281 | $ | 1,039,549 | (6.6 | )% | $ | 1,860,062 | $ | 1,952,993 | (4.8 | )% | |||||||||||||
| Used vehicle retail sales | 298,593 | 296,650 | 0.7 | 602,588 | 576,651 | 4.5 | |||||||||||||||||||
| Used vehicle wholesale sales | 67,496 | 81,590 | (17.3 | ) | 134,723 | 154,746 | (12.9 | ) | |||||||||||||||||
| Parts and service | 192,753 | 176,437 | 9.2 | 383,589 | 349,200 | 9.8 | |||||||||||||||||||
| Finance and insurance | 52,992 | 52,051 | 1.8 | 105,416 | 101,088 | 4.3 | |||||||||||||||||||
| Total revenues | 1,583,115 | 1,646,277 | (3.8 | )% | 3,086,378 | 3,134,678 | (1.5 | )% | |||||||||||||||||
COST OF SALES: | |||||||||||||||||||||||||
| New vehicle retail sales | 908,262 | 970,248 | (6.4 | )% | 1,739,899 | 1,820,301 | (4.4 | )% | |||||||||||||||||
| Used vehicle retail sales | 266,192 | 261,684 | 1.7 | 536,605 | 506,507 | 5.9 | |||||||||||||||||||
| Used vehicle wholesale sales | 68,290 | 82,139 | (16.9 | ) | 135,458 | 154,097 | (12.1 | ) | |||||||||||||||||
| Parts and service | 88,960 | 80,029 | 11.2 | 175,426 | 160,451 | 9.3 | |||||||||||||||||||
| Total cost of sales | 1,331,704 | 1,394,100 | (4.5 | )% | 2,587,388 | 2,641,356 | (2.0 | )% | |||||||||||||||||
GROSS PROFIT | 251,411 | 252,177 | (0.3 | )% | 498,990 | 493,322 | 1.1 | % | |||||||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 195,337 | 191,998 | 1.7 | 390,399 | 385,000 | 1.4 | |||||||||||||||||||
| DEPRECIATION AND AMORTIZATION EXPENSE | 6,497 | 5,103 | 27.3 | 12,315 | 9,838 | 25.2 | |||||||||||||||||||
| ASSET IMPAIRMENTS | — | 356 | (100.0 | ) | — | 356 | (100.0 | ) | |||||||||||||||||
OPERATING INCOME | 49,577 | 54,720 | (9.4 | )% | 96,276 | 98,128 | (1.9 | )% | |||||||||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||||||||||||
| Floorplan interest expense | (12,392 | ) | (11,477 | ) | 8.0 | (24,400 | ) | (23,388 | ) | 4.3 | |||||||||||||||
| Other interest expense, net | (7,066 | ) | (6,141 | ) | 15.1 | (14,904 | ) | (10,661 | ) | 39.8 | |||||||||||||||
| Gain on redemption of senior subordinated notes | — | — | — | 409 | — | 100.0 | |||||||||||||||||||
| Other income (expense), net | (36 | ) | 95 | (137.9 | ) | 314 | 191 | 64.4 | |||||||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 30,083 | 37,197 | (19.1 | )% | 57,695 | 64,270 | (10.2 | )% | |||||||||||||||||
| PROVISION FOR INCOME TAXES | 11,591 | 12,908 | (10.2 | ) | 22,100 | 22,349 | (1.1 | ) | |||||||||||||||||
INCOME FROM CONTINUING OPERATIONS | 18,492 | 24,289 | (23.9 | )% | 35,595 | 41,921 | (15.1 | )% | |||||||||||||||||
DISCONTINUED OPERATIONS: | |||||||||||||||||||||||||
| Loss related to discontinued operations | (2,367 | ) | (106 | ) | 2,133.0 | (3,481 | ) | (381 | ) | 813.6 | |||||||||||||||
| Income tax benefit related to loss on discontinued operations | 1,091 | 31 | 3,419.4 | 1,478 | 123 | 1,101.6 | |||||||||||||||||||
| LOSS RELATED TO DISCONTINUED OPERATIONS | (1,276 | ) | (75 | ) | 1,601.3 | % | (2,003 | ) | (258 | ) | 676.4 | % | |||||||||||||
NET INCOME | $ | 17,216 | $ | 24,214 | (28.9 | )% | $ | 33,592 | $ | 41,663 | (19.4 | )% | |||||||||||||
DILUTED EARNINGS (LOSS) PER SHARE: | |||||||||||||||||||||||||
| Earnings per share from continuing operations | $ | 0.82 | $ | 1.02 | (19.6 | )% | $ | 1.57 | $ | 1.75 | (10.3 | )% | |||||||||||||
| Loss per share related to discontinued operations | (0.06 | ) | $ | (0.01 | ) | (500.0 | ) | (0.09 | ) | (0.01 | ) | (800.0 | ) | ||||||||||||
| Earnings per share | $ | 0.76 | $ | 1.01 | (24.8 | )% | $ | 1.48 | $ | 1.74 | (14.9 | )% | |||||||||||||
| Weighted average diluted shares outstanding | 22,661 | 23,888 | (5.1 | )% | 22,728 | 23,984 | (5.2 | )% | |||||||||||||||||
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
Consolidated Balance Sheets
(Dollars in thousands)
| June 30, | December 31, | |||||||||||
| 2008 | 2007 | % Change | ||||||||||
ASSETS: | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 39,968 | $ | 34,248 | 16.7 | % | ||||||
| Contracts in transit and vehicle receivables, net | 145,231 | 189,400 | (23.3 | ) | ||||||||
| Accounts and notes receivable, net | 83,328 | 82,698 | 0.8 | |||||||||
| Inventories | 933,469 | 878,168 | 6.3 | |||||||||
| Assets related to discontinued operations | 10,812 | 30,531 | (64.6 | ) | ||||||||
| Deferred income taxes | 18,933 | 18,287 | 3.5 | |||||||||
| Prepaid expenses and other current assets | 15,362 | 29,651 | (48.2 | ) | ||||||||
| Total current assets | 1,247,103 | 1,262,983 | (1.3 | ) | ||||||||
| PROPERTY AND EQUIPMENT, net | 542,453 | 427,223 | 27.0 | |||||||||
| GOODWILL AND OTHER INTANGIBLES | 807,692 | 787,245 | 2.6 | |||||||||
| OTHER ASSETS | 25,538 | 28,730 | (11.1 | ) | ||||||||
| Total assets | $ | 2,622,786 | $ | 2,506,181 | 4.7 | % | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Floorplan notes payable — credit facility | $ | 753,760 | $ | 648,469 | 16.2 | % | ||||||
| Floorplan notes payable — manufacturer affiliates | 168,901 | 170,911 | (1.2 | ) | ||||||||
| Current maturities of long-term debt | 13,667 | 12,260 | 11.5 | |||||||||
| Accounts payable | 107,258 | 111,458 | (3.8 | ) | ||||||||
| Liabilities related to discontinued operations | 5,170 | 35,180 | (85.3 | ) | ||||||||
| Accrued expenses | 100,902 | 100,000 | 0.9 | |||||||||
| Total current liabilities | 1,149,658 | 1,078,278 | 6.6 | |||||||||
| 2.25% CONVERTIBLE SENIOR NOTES | 282,214 | 281,915 | 0.1 | |||||||||
| 8.25% SENIOR SUBORDINATED NOTES | 82,205 | 100,273 | (18.0 | ) | ||||||||
| MORTGAGE FACILITY, net of current maturities | 173,291 | 124,633 | 39.0 | |||||||||
| OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, net of current maturities | 37,296 | 6,104 | 511.0 | |||||||||
| CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities | 40,225 | 26,913 | 49.5 | |||||||||
| ACQUISITION LINE | 50,000 | 135,000 | (63.0 | ) | ||||||||
| DEFERRED INCOME TAXES | 29,562 | 6,849 | 331.6 | |||||||||
| LIABILITIES FROM INTEREST RISK MANAGEMENT ACTIVITIES | 15,395 | 16,188 | (4.9 | ) | ||||||||
| OTHER LIABILITIES | 32,089 | 29,016 | 10.6 | |||||||||
| Total liabilities before deferred revenues | 1,891,935 | 1,805,169 | 4.8 | |||||||||
| DEFERRED REVENUES | 13,693 | 16,531 | (17.2 | ) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||||||
| Common stock | 256 | 255 | 0.4 | |||||||||
| Additional paid-in capital | 292,807 | 293,675 | (0.3 | ) | ||||||||
| Retained earnings | 529,892 | 502,783 | 5.4 | |||||||||
| Accumulated other comprehensive loss | (9,097 | ) | (9,560 | ) | (4.8 | ) | ||||||
| Treasury stock | (96,700 | ) | (102,672 | ) | (5.8 | ) | ||||||
| Total stockholders’ equity | 717,158 | 684,481 | 4.8 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,622,786 | $ | 2,506,181 | 4.7 | % | ||||||
BALANCE SHEET DATA: | ||||||||||||
| Working capital | $ | 97,445 | $ | 184,705 | ||||||||
| Current ratio | 1.08 | 1.17 | ||||||||||
| Long-term debt to capitalization | 49 | % | 50 | % | ||||||||
| Excluding real estate related debt | 39 | % | 45 | % | ||||||||
Inventory days supply:(1) | ||||||||||||
| New vehicle | 66 | 62 | ||||||||||
| Used vehicle | 28 | 35 | ||||||||||
| (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, | |||||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||||
| NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: | ||||||||||||||||||
Region | Geographic Market | |||||||||||||||||
| Eastern | Massachusetts | 11.8 | % | 12.4 | % | 11.7 | % | 12.0 | % | |||||||||
| New Jersey | 7.1 | 5.5 | 6.8 | 5.5 | ||||||||||||||
| New York | 4.3 | 2.5 | 4.2 | 2.4 | ||||||||||||||
| New Hampshire | 3.7 | 4.0 | 3.5 | 3.7 | ||||||||||||||
| Louisiana | 3.1 | 4.0 | 3.4 | 3.9 | ||||||||||||||
| Georgia | 3.3 | 3.6 | 3.4 | 3.6 | ||||||||||||||
| Florida | 2.3 | 3.6 | 2.6 | 3.7 | ||||||||||||||
| Mississippi | 1.7 | 1.5 | 1.6 | 1.6 | ||||||||||||||
| Alabama | 0.9 | 0.9 | 0.9 | 1.0 | ||||||||||||||
| Maryland | 0.6 | — | 0.3 | — | ||||||||||||||
| South Carolina | 0.3 | — | 0.3 | — | ||||||||||||||
| 39.1 | 38.0 | 38.7 | 37.4 | |||||||||||||||
| Central | Texas | 32.2 | 31.4 | 32.6 | 31.6 | |||||||||||||
| Oklahoma | 9.6 | 10.3 | 9.4 | 9.9 | ||||||||||||||
| Kansas | 1.4 | 1.1 | 1.3 | 1.0 | ||||||||||||||
| 43.2 | 42.8 | 43.3 | 42.5 | |||||||||||||||
| Western | California | 16.0 | 17.6 | 16.3 | 18.7 | |||||||||||||
| International | United Kingdom | 1.7 | 1.6 | 1.7 | 1.4 | |||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| NEW VEHICLE UNIT SALES BRAND MIX: | ||||||||||||||||||
| Toyota/ Scion/Lexus | 35.5 | % | 36.8 | % | 35.2 | % | 36.3 | % | ||||||||||
| Honda/Acura | 14.9 | 12.4 | 14.0 | 12.2 | ||||||||||||||
| Nissan/Infiniti | 12.7 | 12.0 | 12.9 | 12.8 | ||||||||||||||
| Ford | 9.5 | 12.9 | 10.6 | 13.2 | ||||||||||||||
| BMW/Mini | 9.0 | 6.9 | 8.2 | 6.3 | ||||||||||||||
| Chrysler | 5.7 | 7.9 | 6.3 | 7.7 | ||||||||||||||
| Mercedes-Benz | 5.7 | 2.8 | 5.6 | 3.0 | ||||||||||||||
| GM | 4.5 | 5.5 | 4.7 | 5.7 | ||||||||||||||
| Other | 2.5 | 2.8 | 2.5 | 2.8 | ||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| NEW VEHICLE UNIT OTHER MIX: | ||||||||||||||||||
| Import | 58.0 | % | 55.9 | % | 56.8 | % | 55.9 | % | ||||||||||
| Luxury | 24.3 | 19.9 | 23.8 | 19.8 | ||||||||||||||
| Domestic | 17.7 | 24.2 | 19.4 | 24.3 | ||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| Car | 61.8 | % | 55.0 | % | 58.7 | % | 53.6 | % | ||||||||||
| Truck | 38.2 | 45.0 | 41.3 | 46.4 | ||||||||||||||
| 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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 971,281 | $ | 1,039,549 | (6.6 | )% | $ | 1,860,062 | $ | 1,952,993 | (4.8 | )% | |||||||||||||
| Used vehicle retail sales | 298,593 | 296,650 | 0.7 | 602,588 | 576,651 | 4.5 | |||||||||||||||||||
| Used vehicle wholesale sales | 67,496 | 81,590 | (17.3 | ) | 134,723 | 154,746 | (12.9 | ) | |||||||||||||||||
| Total used | 366,089 | 378,240 | (3.2 | ) | 737,311 | 731,397 | 0.8 | ||||||||||||||||||
| Parts and service | 192,753 | 176,437 | 9.2 | 383,589 | 349,200 | 9.8 | |||||||||||||||||||
| Finance and insurance | 52,992 | 52,051 | 1.8 | 105,416 | 101,088 | 4.3 | |||||||||||||||||||
| Total | $ | 1,583,115 | $ | 1,646,277 | (3.8 | )% | $ | 3,086,378 | $ | 3,134,678 | (1.5 | )% | |||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||||
| New vehicle retail sales | 6.5 | % | 6.7 | % | 6.5 | % | 6.8 | % | |||||||||||||||||
| Used vehicle retail sales | 10.9 | 11.8 | 10.9 | 12.2 | |||||||||||||||||||||
| Used vehicle wholesale sales | (1.2 | ) | (0.7 | ) | (0.5 | ) | 0.4 | ||||||||||||||||||
| Total used | 8.6 | 9.1 | 8.8 | 9.7 | |||||||||||||||||||||
| Parts and service | 53.8 | 54.6 | 54.3 | 54.1 | |||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
| Total | 15.9 | % | 15.3 | % | 16.2 | % | 15.7 | % | |||||||||||||||||
GROSS PROFIT: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 63,019 | $ | 69,301 | (9.1 | )% | $ | 120,163 | $ | 132,692 | (9.4 | )% | |||||||||||||
| Used vehicle retail sales | 32,401 | 34,966 | (7.3 | ) | 65,983 | 70,144 | (5.9 | ) | |||||||||||||||||
| Used vehicle wholesale sales | (794 | ) | (549 | ) | (44.6 | ) | (735 | ) | 649 | (213.3 | ) | ||||||||||||||
| Total used | 31,607 | 34,417 | (8.2 | ) | 65,248 | 70,793 | (7.8 | ) | |||||||||||||||||
| Parts and service | 103,793 | 96,408 | 7.7 | 208,163 | 188,749 | 10.3 | |||||||||||||||||||
| Finance and insurance | 52,992 | 52,051 | 1.8 | 105,416 | 101,088 | 4.3 | |||||||||||||||||||
| Total | $ | 251,411 | $ | 252,177 | (0.3 | )% | $ | 498,990 | $ | 493,322 | 1.1 | % | |||||||||||||
UNITS SOLD: | |||||||||||||||||||||||||
| Retail new vehicles sold | 32,368 | 34,706 | (6.7 | )% | 60,887 | 65,270 | (6.7 | )% | |||||||||||||||||
| Retail used vehicles sold | 16,783 | 17,115 | (1.9 | ) | 33,888 | 33,860 | 0.1 | ||||||||||||||||||
| Wholesale used vehicles sold | 10,304 | 11,842 | (13.0 | ) | 20,252 | 22,303 | (9.2 | ) | |||||||||||||||||
| Total used | 27,087 | 28,957 | (6.5 | )% | 54,140 | 56,163 | (3.6 | )% | |||||||||||||||||
GROSS PROFIT PER UNIT SOLD: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,947 | $ | 1,997 | (2.5 | )% | $ | 1,974 | $ | 2,033 | (2.9 | )% | |||||||||||||
| Used vehicle retail sales | 1,931 | 2,043 | (5.5 | ) | 1,947 | 2,072 | (6.0 | ) | |||||||||||||||||
| Used vehicle wholesale sales | (77 | ) | (46 | ) | (67.4 | ) | (36 | ) | 29 | (224.1 | ) | ||||||||||||||
| Total used | 1,167 | 1,189 | (1.9 | ) | 1,205 | 1,260 | (4.4 | ) | |||||||||||||||||
| Finance and insurance (per retail unit) | $ | 1,078 | $ | 1,004 | 7.4 | % | $ | 1,112 | $ | 1,020 | 9.0 | % | |||||||||||||
OTHER: | |||||||||||||||||||||||||
| SG&A expenses | $ | 195,337 | $ | 191,998 | 1.7 | % | $ | 390,399 | $ | 385,000 | 1.4 | % | |||||||||||||
| SG&A as % revenues | 12.3 | % | 11.7 | % | 12.6 | % | 12.3 | % | |||||||||||||||||
| SG&A as % gross profit | 77.7 | % | 76.1 | % | 78.2 | % | 78.0 | % | |||||||||||||||||
| Operating margin | 3.1 | % | 3.3 | % | 3.1 | % | 3.1 | % | |||||||||||||||||
| Pretax income margin | 1.9 | % | 2.3 | % | 1.9 | % | 2.1 | % | |||||||||||||||||
| Floorplan interest | (12,392 | ) | (11,477 | ) | 8.0 | (24,400 | ) | (23,388 | ) | 4.3 | |||||||||||||||
| Floorplan assistance | 7,839 | 9,713 | (19.3 | ) | 15,565 | 18,491 | (15.8 | ) | |||||||||||||||||
| Net floorplan (expense) income | $ | (4,553 | ) | $ | (1,764 | ) | 158.1 | % | $ | (8,835 | ) | $ | (4,897 | ) | 80.4 | % | |||||||||
Group 1 Automotive, Inc.
Additional Information — Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
Additional Information — Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||||||||||||
REVENUES: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 925,082 | $ | 1,027,177 | (9.9 | )% | $ | 1,764,524 | $ | 1,925,178 | (8.3 | )% | |||||||||||||
| Used vehicle retail sales | 284,975 | 290,730 | (2.0 | ) | 566,337 | 563,376 | 0.5 | ||||||||||||||||||
| Used vehicle wholesale sales | 64,403 | 80,162 | (19.7 | ) | 125,534 | 150,945 | (16.8 | ) | |||||||||||||||||
| Total used | 349,378 | 370,892 | (5.8 | ) | 691,871 | 714,321 | (3.1 | ) | |||||||||||||||||
| Parts and service | 181,550 | 173,294 | 4.8 | 357,557 | 341,153 | 4.8 | |||||||||||||||||||
| Finance and insurance | 51,802 | 51,518 | 0.6 | 102,902 | 100,004 | 2.9 | |||||||||||||||||||
| Total | $ | 1,507,812 | $ | 1,622,881 | (7.1 | )% | $ | 2,916,854 | $ | 3,080,656 | (5.3 | )% | |||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||||
| New vehicle retail sales | 6.4 | % | 6.6 | % | 6.4 | % | 6.8 | % | |||||||||||||||||
| Used vehicle retail sales | 10.9 | 11.7 | 11.1 | 12.1 | |||||||||||||||||||||
| Used vehicle wholesale sales | (1.2 | ) | (0.5 | ) | (0.6 | ) | 0.6 | ||||||||||||||||||
| Total used | 8.7 | 9.1 | 9.0 | 9.7 | |||||||||||||||||||||
| Parts and service | 53.9 | 54.6 | 54.3 | 54.0 | |||||||||||||||||||||
| Finance and insurance | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
| Total | 15.9 | % | 15.3 | % | 16.2 | % | 15.7 | % | |||||||||||||||||
GROSS PROFIT: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 59,068 | $ | 68,217 | (13.4 | )% | $ | 112,894 | $ | 130,416 | (13.4 | )% | |||||||||||||
| Used vehicle retail sales | 31,193 | 34,147 | (8.7 | ) | 63,089 | 68,187 | (7.5 | ) | |||||||||||||||||
| Used vehicle wholesale sales | (757 | ) | (420 | ) | (80.2 | ) | (756 | ) | 899 | (184.1 | ) | ||||||||||||||
| Total used | 30,436 | 33,727 | (9.8 | ) | 62,333 | 69,086 | (9.8 | ) | |||||||||||||||||
| Parts and service | 97,794 | 94,698 | 3.3 | 194,009 | 184,384 | 5.2 | |||||||||||||||||||
| Finance and insurance | 51,802 | 51,518 | 0.6 | 102,902 | 100,004 | 2.9 | |||||||||||||||||||
| Total | $ | 239,100 | $ | 248,160 | (3.7 | )% | $ | 472,138 | $ | 483,890 | (2.4 | )% | |||||||||||||
UNITS SOLD: | |||||||||||||||||||||||||
| Retail new vehicles sold | 31,466 | 34,292 | (8.2 | )% | 59,048 | 64,372 | (8.3 | )% | |||||||||||||||||
| Retail used vehicles sold | 16,356 | 16,759 | (2.4 | ) | 32,756 | 33,013 | (0.8 | ) | |||||||||||||||||
| Wholesale used vehicles sold | 10,068 | 11,632 | (13.4 | ) | 19,608 | 21,773 | (9.9 | ) | |||||||||||||||||
| Total used | 26,424 | 28,391 | (6.9 | )% | 52,364 | 54,786 | (4.4 | )% | |||||||||||||||||
GROSS PROFIT PER UNIT SOLD: | |||||||||||||||||||||||||
| New vehicle retail sales | $ | 1,877 | $ | 1,989 | (5.6 | )% | $ | 1,912 | $ | 2,026 | (5.6 | )% | |||||||||||||
| Used vehicle retail sales | 1,907 | 2,038 | (6.4 | ) | 1,926 | 2,065 | (6.7 | ) | |||||||||||||||||
| Used vehicle wholesale sales | (75 | ) | (36 | ) | (108.3 | ) | (39 | ) | 41 | (195.1 | ) | ||||||||||||||
| Total used | 1,152 | 1,188 | (3.0 | ) | 1,190 | 1,261 | (5.6 | ) | |||||||||||||||||
| Finance and insurance (per retail unit) | $ | 1,083 | $ | 1,009 | 7.3 | % | $ | 1,121 | $ | 1,027 | 9.2 | % | |||||||||||||
OTHER: | |||||||||||||||||||||||||
| SG&A expenses | $ | 186,513 | $ | 187,309 | (0.4 | )% | $ | 369,546 | $ | 370,842 | (0.3 | )% | |||||||||||||
| SG&A as % revenues | 12.4 | % | 11.5 | % | 12.7 | % | 12.0 | % | |||||||||||||||||
| SG&A as % gross profit | 78.0 | % | 75.5 | % | 78.3 | % | 76.6 | % | |||||||||||||||||
| Operating margin | 3.1 | % | 3.5 | % | 3.1 | % | 3.4 | % | |||||||||||||||||
| Floorplan interest | (11,872 | ) | (11,134 | ) | (6.6 | ) | (23,079 | ) | (22,630 | ) | (2.0 | ) | |||||||||||||
| Floorplan assistance | 7,839 | 9,454 | (17.1 | ) | 15,564 | 17,965 | (13.4 | ) | |||||||||||||||||
| Net floorplan (expense) income | $ | (4,033 | ) | $ | (1,680 | ) | (140.1 | )% | $ | (7,515 | ) | $ | (4,665 | ) | (61.1 | )% | |||||||||
| (1) | Same store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same store results also include the activities of our corporate office. |
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
NET INCOME FROM CONTINUING OPERATIONS RECONCILIATION: |
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||||||||||||
| As reported | $ | 18,492 | $ | 24,289 | (23.9 | )% | $ | 35,595 | $ | 41,921 | (15.1 | )% | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Lease Terminations | 535 | 326 | 535 | 2,809 | |||||||||||||||||||||
| Asset impairments | — | 232 | — | 232 | |||||||||||||||||||||
Adjusted (1) | $ | 19,027 | $ | 24,847 | (23.4 | )% | $ | 36,130 | $ | 44,962 | (19.6 | )% | |||||||||||||
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS RECONCILIATION: |
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
| 2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||||||||||||
| Earnings per share from continuing operations | $ | 0.82 | $ | 1.02 | (19.6 | )% | $ | 1.57 | $ | 1.75 | (10.3 | )% | |||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Lease Terminations | 0.02 | 0.01 | 0.02 | 0.12 | |||||||||||||||||||||
| Asset impairments | — | 0.01 | — | 0.01 | |||||||||||||||||||||
Adjusted (1) | $ | 0.84 | $ | 1.04 | (19.2 | )% | $ | 1.59 | $ | 1.88 | (15.4 | )% | |||||||||||||
| (1) | Adjusted net income from continuing operations and adjusted diluted earnings per share from continuing operations means net income from continuing operations or diluted earnings per share from continuing operations, as the case may be, plus the adjustments noted above. We use adjusted net income from continuing operations and adjusted diluted earnings per share from continuing operations in our evaluation of the performance of the company, as we believe that they provide additional information regarding the performance of our operations. We believe the presentation of these measures is relevant and useful to investors because they improve period-to-period comparability 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 from continuing operations or diluted earnings per share from continuing operations prepared in accordance with GAAP. Although we find these non-GAAP results useful in evaluating the performance of our business, our reliance on these measures is limited because the adjustments often have a material impact on our net income from continuing operations and diluted earnings per share from continuing operations calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations. |