Sales Improvement of 25 Percent Drives Substantial Profit Increase at Group 1 Automotive in Second Quarter
JUL 27, 2010 - 07:00 ET
FOR: GROUP 1 AUTOMOTIVE, INC.
Share Repurchase Authorization Announced
HOUSTON, TX--(Marketwire - July 27, 2010) - Group 1 Automotive, Inc. (
Second-Quarter Operating Highlights
- Same-store total revenues increased 25.0 percent compared to the prior-year period, primarily reflecting a 26.5 percent increase in new vehicle sales and a 31.7 percent increase in used retail sales.
- Same-store new and used vehicle gross profits grew 25.5 percent and 24.0 percent, respectively.
- Same-store parts and service gross profit improved 7.6 percent on 4.8 percent higher revenues.
- On a same-store per-retail-unit basis, finance and insurance gross profit expanded to $1,028.
- Same-store selling, general and administrative expenses as a percent of gross profit improved 390 basis points sequentially, to 77.3 percent.
"Group 1's sales results in the second quarter far exceeded the overall market's improvement and demonstrates that our focus on growing our business is gaining traction," said Earl J. Hesterberg, Group 1's president and chief executive officer. "The hard work by our operating team to retain and attract new customers in this improving selling environment showed good results this quarter. In addition, the benefits of Group 1's leaner expense structure are becoming evident as sales begin to grow again."
Balance Sheet
New vehicle inventory was $484.9 million as of June 30, 2010, an increase
of $30.5 million compared to March 31. The company ended the quarter with
immediately available funds of $104.2 million and available liquidity of
$275.0 million.
Share Repurchase Update / New Authorization
During the second quarter, Group 1 completed its 2008 authorization to
repurchase $20.0 million of its common stock by repurchasing 748,464 shares
at an average price per share of $25.69.
Group 1 also announced that its board of directors authorized a new share repurchase program of up to $25.0 million of the company's common stock. Purchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or in privately negotiated transactions.
The company expects that any repurchase of shares will be funded by cash from operations. As of June 30, the company had 23.8 million shares of common stock outstanding. Repurchased shares will be held in treasury.
Second-Quarter Earnings Conference Call
Group 1's senior management will host a conference call today at 11 a.m. ET
to discuss the second-quarter financial results and the company's outlook
and strategy.
The conference call will be simulcast live, and a slide presentation will be accessible, 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:
-
Domestic: 877-874-1571
International: 719-325-4762
Participant Passcode: 6144821
A telephonic replay will be available following the call through August 3 by dialing:
-
Domestic: 888-203-1112
International: 719-457-0820
Replay Passcode: 6144821
About Group 1 Automotive, Inc.
Group 1 owns and operates 101 automotive dealerships, 136 franchises, and
25 collision service centers in the United States and the United Kingdom
that offer 32 brands of automobiles. Through its dealerships, the company
sells new and used cars and light trucks; arranges related financing,
vehicle service and insurance contracts; provides maintenance and repair
services; and sells replacement parts.
Group 1 Automotive can be reached on the Internet at www.group1auto.com.
This press release contains "forward-looking statements," which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "may" or "will" and similar expressions. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. These factors, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K under the headings "Business--Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." We urge you to carefully consider this information. We undertake no duty to update our forward-looking statements, including our earnings outlook, whether as a result of new information, future developments or otherwise, except as may be required by law.
Group 1 Automotive, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended June 30,
----------------------------------
2010 2009 % Change
---------- ---------- ----------
REVENUES:
New vehicle retail sales $ 785,851 $ 608,592 29.1%
Used vehicle retail sales 340,142 249,770 36.2
Used vehicle wholesale sales 55,678 34,649 60.7
Parts and service 194,063 183,105 6.0
Finance and insurance 42,775 32,639 31.1
---------- ---------- ----------
Total revenues 1,418,509 1,108,755 27.9
COST OF SALES:
New vehicle retail sales 740,740 573,612 29.1
Used vehicle retail sales 307,596 223,942 37.4
Used vehicle wholesale sales 54,558 33,541 62.7
Parts and service 88,963 86,545 2.8
---------- ---------- ----------
Total cost of sales 1,191,857 917,640 29.9
---------- ---------- ----------
GROSS PROFIT 226,652 191,115 18.6
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 182,465 151,113 20.7
DEPRECIATION AND
AMORTIZATION EXPENSE 6,679 6,462 3.4
ASSET IMPAIRMENTS 1,482 2,040 (27.4)
OPERATING INCOME 36,026 31,500 14.4
OTHER INCOME (EXPENSE):
Floorplan interest expense (8,633) (7,857) 9.9
Other interest expense, net (6,267) (7,576) (17.3)
Gain (loss) on redemption of long-term
debt - 232 (100.0)
Other expense, net - (5) (100.0)
---------- ---------- ----------
INCOME BEFORE INCOME TAXES 21,126 16,294 29.7
PROVISION FOR INCOME TAXES (8,357) (6,212) 34.5
---------- ---------- ----------
NET INCOME $ 12,769 $ 10,082 26.7%
========== ========== ==========
DILUTED INCOME PER SHARE $ 0.54 $ 0.43 25.6%
Weighted average diluted shares
outstanding 23,638 23,288 1.5%
Six Months Ended June 30,
----------------------------------
2010 2009 % Change
---------- ---------- ----------
REVENUES:
New vehicle retail sales $1,431,972 $1,155,884 23.9%
Used vehicle retail sales 619,751 474,629 30.6
Used vehicle wholesale sales 98,190 69,385 41.5
Parts and service 379,498 363,970 4.3
Finance and insurance 80,251 64,704 24.0
---------- ---------- ----------
Total revenues 2,609,662 2,128,572 22.6
COST OF SALES:
New vehicle retail sales 1,347,487 1,091,430 23.5
Used vehicle retail sales 560,768 424,195 32.2
Used vehicle wholesale sales 95,407 67,333 41.7
Parts and service 174,827 171,845 1.7
---------- ---------- ----------
Total cost of sales 2,178,489 1,754,803 24.1
---------- ---------- ----------
GROSS PROFIT 431,173 373,769 15.4
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 348,871 304,347 14.6
DEPRECIATION AND
AMORTIZATION EXPENSE 13,164 12,875 2.2
ASSET IMPAIRMENTS 1,482 2,135 (30.6)
OPERATING INCOME 67,656 54,412 24.3
OTHER INCOME (EXPENSE):
Floorplan interest expense (16,199) (16,819) (3.7)
Other interest expense, net (13,371) (14,539) (8.0)
Gain (loss) on redemption of long-term
debt (3,872) 7,613 (150.9)
Other expense, net - (2) (100.0)
---------- ---------- ----------
INCOME BEFORE INCOME TAXES 34,214 30,665 11.6
PROVISION FOR INCOME TAXES (13,464) (12,208) 10.3
---------- ---------- ----------
NET INCOME $ 20,750 $ 18,457 12.4%
========== ========== ==========
DILUTED INCOME PER SHARE $ 0.88 $ 0.80 10.0%
Weighted average diluted shares
outstanding 23,663 23,107 2.4%
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
June 30, December 31,
2010 2009 % Change
---------- ---------- ----------
(Unaudited)
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 32,186 $ 13,221 143.4%
Contracts in transit and vehicle
receivables, net 111,175 86,500 28.5
Accounts and notes receivable, net 68,198 62,496 9.1
Inventories 696,994 596,743 16.8
Deferred income taxes 14,248 14,653 (2.8)
Prepaid expenses and other current
assets 43,977 48,425 (9.2)
---------- ---------- ----------
Total current assets 966,778 822,038 17.6
PROPERTY AND EQUIPMENT, net 454,420 475,828 (4.5)
GOODWILL AND INTANGIBLE FRANCHISE
RIGHTS 667,160 658,281 1.3
OTHER ASSETS 10,899 13,267 (17.8)
---------- ---------- ----------
Total assets $2,099,257 $1,969,414 6.6%
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Floorplan notes payable - credit
facility $ 603,836 $ 491,892 22.8%
Offset account related to
floorplan notes payable -
credit facility (72,048) (71,573) 0.7
Floorplan notes payable -
manufacturer affiliates 100,802 115,180 (12.5)
Current maturities of long-term debt 14,395 14,355 0.3
Current liabilities from interest
rate risk management activities 5,500 10,412 (47.2)
Accounts payable 91,904 72,276 27.2
Accrued expenses 82,075 86,271 (4.9)
---------- ---------- ----------
Total current liabilities 826,464 718,813 15.0
2.25% CONVERTIBLE SENIOR NOTES
(aggregate principal of
$182,753 at June 30, 2010 and
December 31, 2009) 134,984 131,932 2.3
3.00% CONVERTIBLE SENIOR NOTES
(aggregate principal of
$115,000 at June 30, 2010) 72,940 - 100.0
8.25% SENIOR SUBORDINATED NOTES - 73,267 (100.0)
MORTGAGE FACILITY, net of current
maturities 154,347 182,216 (15.3)
OTHER REAL ESTATE RELATED AND LONG-TERM
DEBT, net of current maturities 22,223 19,040 16.7
CAPITAL LEASE OBLIGATIONS RELATED TO
REAL ESTATE, net of current maturities 36,783 37,686 (2.4)
DEFERRED INCOME TAXES 44,337 33,932 30.7
LIABILITIES FROM INTEREST RATE RISK
MANAGEMENT ACTIVITIES 21,253 20,151 5.5
OTHER LIABILITIES 28,711 26,633 7.8
DEFERRED REVENUES 4,645 5,588 (16.9)
STOCKHOLDERS' EQUITY:
Common stock 262 262 -
Additional paid-in capital 370,104 346,055 6.9
Retained earnings 492,682 471,932 4.4
Accumulated other comprehensive loss (25,409) (26,256) (3.2)
Treasury stock (85,069) (71,837) 18.4
---------- ---------- ----------
Total stockholders' equity 752,570 720,156 4.5
---------- ---------- ----------
Total liabilities and
stockholders' equity $2,099,257 $1,969,414 6.6%
========== ========== ==========
KEY DEBT COVENANT METRICS:
Senior secured leverage ratio (must
be less than 2.75) 1.18 1.31
Total leverage ratio (must be less
than 4.50) 3.59 3.29
Fixed charge coverage ratio (must be
greater than 1.25) 1.70 1.76
Current ratio (must be greater than
1.15) 1.38 1.34
Group 1 Automotive, Inc.
Consolidated Statements of Adjusted Cash Flows from Operating Activities
(Unaudited)
(In thousands)
Three Months Ended June 30,
----------------------------
%
2010 2009 Change
-------- -------- -------
Net income $ 12,769 $ 10,082 26.7 %
Adjustments to reconcile net income to net
cash provided by operating activities:
Asset Impairments 1,482 2,040 (27.4)
Depreciation and amortization 6,679 6,462 3.4
Deferred income taxes 7,832 8,763 (10.6)
(Gain) loss on redemption of long-term debt - (232) (100.0)
(Gain) loss on sale of assets 4,297 (1,270) 438.3
Stock-based compensation 2,479 3,190 (22.3)
Amortization of debt discount and issue costs 2,322 2,172 6.9
Other 244 138 76.8
Changes in operating assets and liabilities,
net of effects of acquisitions and
dispositions:
Inventories (46,143) 101,620 (145.4)
Floorplan notes payable - credit facility 44,397 (82,643) 153.7
Floorplan notes payable - manufacturer
affiliates (11,884) (18,434) (35.5)
Contracts-in-transit and vehicle receivables (5,684) 7,237 (178.5)
Accounts and notes receivable (3,228) 1,213 (366.1)
Prepaid expenses and other assets 172 (5,933) 102.9
Deferred revenues (45) (1,323) (96.6)
Accounts payable and accrued expenses (7,261) (7,014) 3.5
-------- -------- -------
Adjusted net cash provided by operating
activities $ 8,428 $ 26,068 (67.7)%
-------- -------- -------
Six Months Ended June 30,
----------------------------
2010 2009 % Change
-------- -------- --------
Net income $ 20,750 $ 18,457 12.4%
Adjustments to reconcile net income to net
cash provided by operating activities:
Asset Impairments 1,482 2,135 (30.6)
Depreciation and amortization 13,164 12,875 2.2
Deferred income taxes 12,162 14,901 (18.4)
(Gain) loss on redemption of long-term debt 3,872 (7,613) 150.9
(Gain) loss on sale of assets 4,452 (848) 625.0
Stock-based compensation 5,176 5,427 (4.6)
Amortization of debt discount and issue costs 3,957 4,143 (4.5)
Other 438 (549) 179.8
Changes in operating assets and liabilities,
net of effects of acquisitions and
dispositions:
Inventories (94,377) 303,646 (131.1)
Floorplan notes payable - credit facility 111,944 (280,303) 139.9
Floorplan notes payable - manufacturer
affiliates (12,577) (43,719) (71.2)
Contracts-in-transit and vehicle receivables (24,781) 24,147 (202.6)
Accounts and notes receivable (6,319) 13,868 (145.6)
Prepaid expenses and other assets 1,794 (364) 592.9
Deferred revenues (943) (2,564) (63.2)
Accounts payable and accrued expenses 15,699 (17,729) 188.5
-------- -------- --------
Adjusted net cash provided by operating
activities $ 55,893 $ 45,910 21.7%
-------- -------- --------
Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
Three Months Ended
June 30,
------------------------------
2010 2009
-------------- --------------
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
Region Geographic Market
------- -----------------
Eastern Massachusetts 14.9% 14.6%
New Jersey 6.8 6.7
New Hampshire 4.0 3.9
New York 3.9 4.6
Georgia 3.8 3.7
Louisiana 3.2 3.0
Florida 1.6 1.6
Mississippi 1.5 1.8
South Carolina 1.3 0.3
Alabama 1.2 0.6
Maryland 0.8 1.0
-------------- --------------
43.0 41.8
Central Texas 30.5 33.1
Oklahoma 8.4 8.8
Kansas 0.9 1.3
39.8 43.2
Western California 12.5 12.7
International United Kingdom 4.7 2.3
-------------- --------------
100.0% 100.0%
NEW VEHICLE UNIT SALES BRAND MIX:
Toyota/Scion/Lexus 35.1% 34.3%
Nissan/Infiniti 14.1 12.6
Honda/Acura 12.3 13.5
BMW/Mini 11.5 10.3
Ford 8.9 8.9
Mercedes-Benz 5.5 5.4
GM 4.2 3.8
Chrysler 3.0 6.2
Other 5.4 5.0
-------------- --------------
100.0% 100.0%
NEW VEHICLE UNIT SALES OTHER MIX:
Import 57.8% 56.3%
Luxury 26.9 26.0
Domestic 15.3 17.7
-------------- --------------
100.0% 100.0%
Car 59.0% 58.0%
Truck 41.0 42.0
-------------- --------------
100.0% 100.0%
Six Months Ended
June 30,
------------------------------
2010 2009
-------------- --------------
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
Region Geographic Market
------ -----------------
Eastern Massachusetts 15.1% 14.2%
New Jersey 6.6 6.9
New Hampshire 4.2 3.8
New York 3.8 4.4
Georgia 3.8 3.7
Louisiana 3.1 3.2
Florida 1.7 1.8
Mississippi 1.7 1.7
South Carolina 0.8 0.3
Alabama 1.3 0.6
Maryland 0.8 1.0
-------------- --------------
42.9 41.6
Central Texas 30.7 32.5
Oklahoma 8.1 8.5
Kansas 0.9 1.2
39.7 42.2
Western California 13.1 14.1
International United Kingdom 4.3 2.1
-------------- --------------
100.0% 100.0%
NEW VEHICLE UNIT SALES BRAND MIX:
Toyota/Scion/Lexus 34.9% 34.7%
Nissan/Infiniti 14.9 12.1
Honda/Acura 12.4 13.6
BMW/Mini 11.0 9.7
Ford 9.0 9.1
Mercedes-Benz 5.6 5.8
GM 4.0 3.9
Chrysler 2.9 6.5
Other 5.3 4.6
-------------- --------------
100.0% 100.0%
NEW VEHICLE UNIT SALES OTHER MIX:
Import 58.1% 55.9%
Luxury 26.9 25.7
Domestic 15.0 18.4
-------------- --------------
100.0% 100.0%
Car 58.4% 57.0%
Truck 41.6 43.0
-------------- --------------
100.0% 100.0%
Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
(Dollars in thousands, except per unit amounts)
Three Months Ended June 30,
----------------------------------
2010 2009 % Change
---------- ---------- ---------
REVENUES:
New vehicle retail
sales $ 785,851 $ 608,592 29.1%
Used vehicle retail
sales 340,142 249,770 36.2
Used vehicle
wholesale sales 55,678 34,649 60.7
---------- ----------
Total used 395,820 284,419 39.2
Parts and service 194,063 183,105 6.0
Finance and
insurance 42,775 32,639 31.1
---------- ----------
Total $1,418,509 $1,108,755 27.9%
GROSS MARGIN:
New vehicle retail
sales 5.7% 5.7%
Used vehicle retail
sales 9.6 10.3
Used vehicle
wholesale sales 2.0 3.2
Total used 8.5 9.5
Parts and service 54.2 52.7
Finance and
insurance 100.0 100.0
Total 16.0% 17.2%
GROSS PROFIT:
New vehicle retail
sales $ 45,111 $ 34,980 29.0%
Used vehicle retail
sales 32,546 25,828 26.0
Used vehicle
wholesale sales 1,120 1,108 1.1
---------- ----------
Total used 33,666 26,936 25.0
Parts and service 105,100 96,560 8.8
Finance and
insurance 42,775 32,639 31.1
---------- ----------
Total $ 226,652 $ 191,115 18.6%
UNITS SOLD:
Retail new vehicles
sold 25,101 19,954 25.8%
Retail used vehicles
sold 17,636 13,914 26.8
Wholesale used
vehicles sold 8,692 6,426 35.3
---------- ----------
Total used 26,328 20,340 29.4%
GROSS PROFIT PER UNIT
SOLD:
New vehicle retail
sales $ 1,797 $ 1,753 2.5%
Used vehicle retail
sales 1,845 1,856 (0.6)
Used vehicle
wholesale sales 129 172 (25.0)
Total used 1,279 1,324 (3.4)
Finance and
insurance (per
retail unit) $ 1,001 $ 964 3.8%
OTHER (1):
SG&A expenses $ 176,850 $ 152,568 15.9%
SG&A as % revenues 12.5% 13.8%
SG&A as % gross
profit 78.0% 79.8%
Operating margin 3.0% 2.9%
Pretax margin 2.0% 1.5%
FLOORPLAN EXPENSE:
Floorplan interest $ (8,633) $ (7,857) 9.9%
Floorplan assistance 6,089 4,725 28.9
---------- ----------
Net floorplan
expense $ (2,544) $ (3,132) (18.8)%
Six Months Ended June 30,
----------------------------------
2010 2009 % Change
---------- ---------- ---------
REVENUES:
New vehicle retail
sales $1,431,972 $1,155,884 23.9%
Used vehicle retail
sales 619,751 474,629 30.6
Used vehicle
wholesale sales 98,190 69,385 41.5
---------- ----------
Total used 717,941 544,014 32.0
Parts and service 379,498 363,970 4.3
Finance and
insurance 80,251 64,704 24.0
---------- ----------
Total $2,609,662 $2,128,572 22.6%
GROSS MARGIN:
New vehicle retail
sales 5.9% 5.6%
Used vehicle retail
sales 9.5 10.6
Used vehicle
wholesale sales 2.8 3.0
Total used 8.6 9.6
Parts and service 53.9 52.8
Finance and
insurance 100.0 100.0
Total 16.5% 17.6%
GROSS PROFIT:
New vehicle retail
sales $ 84,485 $ 64,454 31.1%
Used vehicle retail
sales 58,983 50,434 17.0
Used vehicle
wholesale sales 2,783 2,052 35.6
---------- ----------
Total used 61,766 52,486 17.7
Parts and service 204,671 192,125 6.5
Finance and
insurance 80,251 64,704 24.0
---------- ----------
Total $ 431,173 $ 373,769 15.4%
UNITS SOLD:
Retail new vehicles
sold 45,732 37,885 20.7%
Retail used vehicles
sold 32,629 27,006 20.8
Wholesale used
vehicles sold 15,408 12,855 19.9
---------- ----------
Total used 48,037 39,861 20.5%
GROSS PROFIT PER UNIT
SOLD:
New vehicle retail
sales $ 1,847 $ 1,701 8.6%
Used vehicle retail
sales 1,808 1,868 (3.2)
Used vehicle
wholesale sales 181 160 13.1
Total used 1,286 1,317 (2.4)
Finance and
insurance (per
retail unit) $ 1,024 $ 997 2.7%
OTHER (1):
SG&A expenses $ 343,256 $ 305,050 12.5%
SG&A as % revenues 13.2% 14.3%
SG&A as % gross
profit 79.6% 81.6%
Operating margin 2.9% 2.6%
Pretax margin 1.7% 1.2%
FLOORPLAN EXPENSE:
Floorplan interest $ (16,199) $ (16,819) (3.7)%
Floorplan assistance 11,323 9,259 22.3
---------- ----------
Net floorplan
expense $ (4,876) $ (7,560) (35.5)%
(1) These amounts have been adjusted to exclude the impact of certain
items to provide additional information regarding the performance of
our operations and improve period-to-period comparability. Refer to
our Reconciliation of Certain Non-GAAP Financial Measures for a
description of the aforementioned adjustments.
Group 1 Automotive, Inc.
Additional Information - Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
Three Months Ended June 30,
----------------------------------
2010 2009 % Change
---------- ---------- ---------
REVENUES:
New vehicle retail sales $ 753,660 $ 595,966 26.5%
Used vehicle retail sales 320,627 243,479 31.7
Used vehicle wholesale sales 51,444 33,700 52.7
---------- ----------
Total used 372,071 277,179 34.2
Parts and service 187,271 178,665 4.8
Finance and insurance 41,955 31,928 31.4
---------- ----------
Total $1,354,957 $1,083,738 25.0%
GROSS MARGIN:
New vehicle retail sales 5.7% 5.8%
Used vehicle retail sales 9.7 10.3
Used vehicle wholesale sales 2.4 3.2
Total used 8.7 9.4
Parts and service 54.2 52.8
Finance and insurance 100.0 100.0
Total 16.2% 17.2%
GROSS PROFIT:
New vehicle retail sales $ 43,208 $ 34,429 25.5%
Used vehicle retail sales 31,213 25,099 24.4
Used vehicle wholesale sales 1,227 1,067 15.0
---------- ----------
Total used 32,440 26,166 24.0
Parts and service 101,475 94,295 7.6
Finance and insurance 41,955 31,928 31.4
---------- ----------
Total $ 219,078 $ 186,818 17.3%
UNITS SOLD:
Retail new vehicles sold 24,034 19,524 23.1%
Retail used vehicles sold 16,764 13,502 24.2
Wholesale used vehicles sold 8,199 6,281 30.5
---------- ----------
Total used 24,963 19,783 26.2%
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales $ 1,798 $ 1,763 2.0%
Used vehicle retail sales 1,862 1,859 0.2
Used vehicle wholesale sales 150 170 (11.8)
Total used 1,300 1,323 (1.7)
Finance and insurance (per retail
unit) $ 1,028 $ 967 6.3%
OTHER:
SG&A expenses $ 169,332 $ 148,358 14.1%
SG&A as % revenues 12.5% 13.7%
SG&A as % gross profit 77.3% 79.4%
Operating margin 3.2% 3.0%
FLOORPLAN EXPENSE:
Floorplan interest $ (8,428) $ (7,786) 8.2%
Floorplan assistance 6,023 4,586 31.3
---------- ----------
Net floorplan expense $ (2,405) $ (3,200) (24.8)%
Six Months Ended June 30,
----------------------------------
2010 2009 % Change
---------- ---------- ---------
REVENUES:
New vehicle retail sales $1,386,699 $1,130,060 22.7%
Used vehicle retail sales 593,126 462,066 28.4
Used vehicle wholesale sales 93,032 67,477 37.9
---------- ----------
Total used 686,158 529,543 29.6
Parts and service 370,035 354,525 4.4
Finance and insurance 79,071 63,322 24.9
---------- ----------
Total $2,521,963 $2,077,450 21.4%
GROSS MARGIN:
New vehicle retail sales 5.9% 5.6%
Used vehicle retail sales 9.6 10.6
Used vehicle wholesale sales 3.1 3.0
Total used 8.7 9.6
Parts and service 54.0 52.9
Finance and insurance 100.0 100.0
Total 16.7% 17.6%
GROSS PROFIT:
New vehicle retail sales $ 81,453 $ 63,559 28.2%
Used vehicle retail sales 57,127 49,022 16.5
Used vehicle wholesale sales 2,897 2,057 40.8
---------- ----------
Total used 60,024 51,079 17.5
Parts and service 199,641 187,372 6.5
Finance and insurance 79,071 63,322 24.9
---------- ----------
Total $ 420,189 $ 365,332 15.0%
UNITS SOLD:
Retail new vehicles sold 44,256 37,015 19.6%
Retail used vehicles sold 31,455 26,181 20.1
Wholesale used vehicles sold 14,836 12,538 18.3
---------- ----------
Total used 46,291 38,719 19.6%
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales $ 1,840 $ 1,717 7.2%
Used vehicle retail sales 1,816 1,872 (3.0)
Used vehicle wholesale sales 195 164 18.9
Total used 1,297 1,319 (1.7)
Finance and insurance (per retail
unit) $ 1,044 $ 1,002 4.2%
OTHER:
SG&A expenses $ 332,589 $ 295,988 12.4%
SG&A as % revenues 13.2% 14.2%
SG&A as % gross profit 79.2% 81.0%
Operating margin 3.0% 2.7%
FLOORPLAN EXPENSE:
Floorplan interest $ (15,933) $ (16,636) (4.2)%
Floorplan assistance 11,243 8,967 25.4
---------- ----------
Net floorplan expense $ (4,690) $ (7,669) (38.8)%
(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)
Three Months Ended June 30,
-------------------------------
NET INCOME RECONCILIATION: 2010 2009 % Change
---------- --------- ---------
As reported $ 12,769 $ 10,082 26.7%
Adjustments:
Non-Cash asset impairment charges
(2) 950 1,265
Mortgage debt refinance charges (3) - 331
Loss (gain) on dealership
dispositions (4) 3,698 (902)
Loss (gain) on debt redemption (5) - (475)
Severance costs related to
UK-dealership acquisitions (6) 405 -
---------- ---------
Adjusted net income (1) $ 17,822 $ 10,301 73.0%
Six Months Ended June 30,
-------------------------------
NET INCOME RECONCILIATION: 2010 2009 % Change
---------- --------- ---------
As reported $ 20,750 $ 18,457 12.4%
Adjustments:
Non-Cash asset impairment charges
(2) 950 1,265
Mortgage debt refinance charges (3) - 331
Loss (gain) on dealership
dispositions (4) 3,698 (451)
Loss (gain) on debt redemption (5) 2,458 (4,906)
Severance costs related to
UK-dealership acquisitions (6) 405 -
---------- ---------
Adjusted net income (1) $ 28,261 $ 14,696 92.3%
Three Months Ended June 30,
-------------------------------
DILUTED INCOME PER SHARE RECONCILIATION(9): 2010 2009 % Change
---------- --------- ---------
As reported $ 0.54 $ 0.43 25.6%
Adjustments:
Non-Cash asset impairment charges 0.04 0.06
Mortgage debt refinance charges - 0.01
Loss (gain) on dealership
disposition 0.15 (0.04)
Loss (gain) on debt redemption - (0.02)
Severance costs related to
UK-dealership acquisitions 0.02 -
---------- ---------
Adjusted diluted income per share
(1) $ 0.75 $ 0.44 70.5%
Six Months Ended June 30,
-------------------------------
DILUTED INCOME PER SHARE RECONCILIATION(9): 2010 2009 % Change
---------- --------- ---------
As reported $ 0.88 $ 0.80 10.0%
Adjustments:
Non-Cash asset impairment charges 0.04 0.06
Mortgage debt refinance charges - 0.01
Loss (gain) on dealership
disposition 0.15 (0.02)
Loss (gain) on debt redemption 0.10 (0.21)
Severance costs related to
UK-dealership acquisitions 0.02 -
---------- ---------
Adjusted diluted income per share
(1) $ 1.19 $ 0.64 85.9%
Three Months Ended June 30,
-------------------------------
SG&A RECONCILIATION: 2010 2009 % Change
---------- --------- ---------
As reported $ 182,465 $ 151,113 20.7%
Adjustments:
Gain (loss) on dealership
dispositions (5,053) 1,455
Severance costs related to
UK-dealership acquisitions (562) -
--------- ----------
Adjusted SG&A (1) $ 176,850 $ 152,568 15.9%
Six Months Ended June 30,
-------------------------------
SG&A RECONCILIATION: 2010 2009 % Change
---------- --------- ---------
As reported $348,871 $ 304,347 14.6%
Adjustments:
Gain (loss) on dealership
dispositions (5,053) 703
Severance costs related to
UK-dealership acquisitions (562) -
-------- ---------
Adjusted SG&A (1) $343,256 $ 305,050 12.5%
Three Months Ended
June 30,
--------------------
SG&A AS % REVENUES: 2010 2009
---------- ---------
Unadjusted 12.9% 13.6%
Adjusted (1) 12.5% 13.8%
Six Months Ended
June 30,
--------------------
SG&A AS % REVENUES: 2010 2009
---------- ---------
Unadjusted 13.4% 14.3%
Adjusted (1) 13.2% 14.3%
Three Months Ended
June 30,
--------------------
SG&A AS % OF GROSS PROFIT: 2010 2009
---------- ---------
Unadjusted 80.5% 79.1%
Adjusted (1) 78.0% 79.8%
Six Months Ended
June 30,
--------------------
SG&A AS % OF GROSS PROFIT: 2010 2009
---------- ---------
Unadjusted 80.9% 81.4%
Adjusted (1) 79.6% 81.6%
Three Months Ended
June 30,
--------------------
OPERATING MARGIN: 2010 2009
---------- ---------
Unadjusted 2.5% 2.8%
Adjusted (1), (7) 3.0% 2.9%
Six Months Ended
June 30,
--------------------
OPERATING MARGIN: 2010 2009
---------- ---------
Unadjusted 2.6% 2.6%
Adjusted (1), (7) 2.9% 2.6%
Three Months Ended
June 30,
--------------------
PRETAX MARGIN: 2010 2009
---------- ---------
Unadjusted 1.5% 1.5%
Adjusted (1), (8) 2.0% 1.5%
Six Months Ended
June 30,
--------------------
PRETAX MARGIN: 2010 2009
---------- ---------
Unadjusted 1.3% 1.4%
Adjusted (1), (8) 1.7% 1.2%
Three Months Ended June 30,
-------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
RECONCILIATION: 2010 2009 % Change
--------- --------- --------
Net cash provided by (used in)
operating activities $ (35,969) $ 108,711 (133.1)%
Change in floorplan notes
payable-credit facility, excluding
floorplan offset account 44,397 (82,643)
--------- ---------
Adjusted net cash provided by
operating activities (1) $ 8,428 $ 26,068 (67.7)%
Six Months Ended June 30,
-------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
RECONCILIATION: 2010 2009 % Change
--------- --------- --------
Net cash provided by (used in)
operating activities $ (56,051) $ 326,213 (117.2)%
Change in floorplan notes
payable-credit facility, excluding
floorplan offset account 111,944 (280,303)
--------- ---------
Adjusted net cash provided by
operating activities (1) $ 55,893 $ 45,910 21.7 %
(1) We believe that these adjusted financial measures are relevant and
useful to investors because they provide additional information regarding
the performance of our operations and improve period-to-period
comparability. These measures are not measures of financial performance
under GAAP. Accordingly, they should not be considered as substitutes for
their unadjusted counterparts, which are prepared in accordance with GAAP.
Although we find these non-GAAP results useful in evaluating the
performance of our business, our reliance on these measures is limited
because the adjustments often have a material impact on our financial
statements calculated in accordance with GAAP. Therefore, we typically
use these adjusted numbers in conjunction with our GAAP results to address
these limitations.
(2) Adjustments are net of tax benefit of $532 for the three and six
months ended June 30, 2010 and $775 and $870 for the three and six months
ended June 30, 2009, respectively, calculated utilizing the applicable
federal and state tax rates for the adjustment.
(3) Adjustment is net of a tax benefit of $203 for the three and six
months ended June 30, 2009, calculated utilizing the applicable federal
and state tax rates for the adjustment.
(4) Adjustments are net of tax benefit of $1,355 for the three and six
months ended June 30, 2010 and tax provision of $553 and $252 for the
three and six months ended June 30, 2009, respectively, calculated
utilizing the applicable federal and state tax rates for the adjustment.
(5) Adjustments are net of tax benefit of $1,414 for the six months ended
June 30, 2010 and tax provision of $291 and $3,241 for the three amd six
months ended June 30, 2009, respectively, calculated utilizing the
applicable federal and state tax rates for the adjustment.
(6) Adjustment is net of a tax benefit of $157 for the three and six
months ended June 30, 2010, calculated utilizing the applicable UK
corporate tax rate for the adjustment.
(7) Excludes the impact of non-cash asset impairment charges, gain/loss
on dealership dispositions and severance costs related to UK-dealership
acquisitions.
(8) Excludes the impact of non-cash asset impairment charges, mortgage
debt refinance charges, gain/loss on dealership dispositions, gain/loss on
debt redemption and severance costs related to UK-dealership acquisitions.
(9) The sum of the quarterly income per share amounts may not equal the
year-to-date amount reported, as per share amounts are computed
independently for each quarter and for the year-to-date, based on the
respective weighted average common shares outstanding.
Investor contacts: Kim Paper Canning, Manager, Investor Relations | Group 1 Automotive Inc. | 713-647-5741 | Email Contact Media contacts: Pete DeLongchamps, Vice President, Manufacturer Relations and Public Affairs | Group 1 Automotive Inc. | 713-647-5770 | Email Contact or Clint Woods, Pierpont Communications, Inc. | 713-627-2223 | Email Contact