Group 1 Automotive Reports 12 Percent Third Quarter Revenue Growth Oct 23, 2014 07:07AM

HOUSTON, Oct. 23, 2014 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI), an international, Fortune 500 automotive retailer, today reported 2014 third quarter adjusted net income of $39.8 million, which equates to a diluted earnings per common share of $1.57. Total revenue grew 12.2 percent to an all-time record of $2.6 billion. The quarter included several significant non-recurring charges, especially relating to a convertible senior notes repurchase, which resulted in GAAP net income and diluted earnings per share of $26.2 million and $1.03, respectively. Adjusted net income increased 21.0 percent from the comparable, adjusted prior-year period. On a GAAP basis, net income decreased 20.2 percent from the comparable prior-year period.

Year-to-date 2014 adjusted net income increased 9.1 percent. Adjusted diluted earnings per common share for the first nine months of 2014 were $4.22. On a GAAP basis, net income decreased 19.4 percent from the comparable prior-year period.

Adjusted net income for the third quarter of 2014 excludes $13.6 million of net, after-tax adjustments, including $17.9 million of charges related to the repurchase of our 2.25% and 3.00% convertible notes, and $6.6 million of asset impairments primarily associated with the pending disposition of vacated U.S. dealership real estate and three Renault franchises in Brazil. These charges were partially offset by a net $8.6 million gain on the sale of U.S. dealerships and associated real estate, and a $3.4 million income tax benefit related to deductible goodwill in Brazil.

"We are delighted to announce all-time record earnings this quarter, with the results driven by strong expense leverage and significant revenue increases across all of our business sectors," said Earl J. Hesterberg, Group 1's president and chief executive officer. "Our International businesses were major factors in our success, with our United Kingdom operations delivering all-time record earnings for the quarter and our Brazilian operations returning to profitability following a significant restructuring."

Financial Highlights for Third Quarter 2014 (year-over-year comparable basis)

  • Total revenue increased 12.2 percent to $2.6 billion, an all-time quarterly record. Total gross profit grew 13.7 percent to $374.7 million.
  • New vehicle revenues increased 9.7 percent on 5.2 percent higher unit sales. New vehicle gross profit increased 9.5 percent to $80.2 million as margins rose 4.1 percent or $71 per unit, to $1,803.
  • Retail used vehicle revenues increased 16.2 percent on increased unit sales of 10.4 percent. Retail used vehicle gross profit increased $6.8 million to $44.3 million, though gross profit per unit sold decreased 3.3 percent, or $52 per unit.
  • Parts and service gross profit increased 15.5 percent on revenue growth of 14.3 percent. Same Store parts and service revenue increased 7.4 percent.
  • Finance and Insurance (F&I) gross profit per retail unit increased 9.8 percent to $1,325 per unit. Same Store consolidated F&I gross profit per retail unit increased 9.3 percent to $1,336 per unit. U.S. Same Store F&I gross profit per retail unit increased 5.4 percent to a record $1,475 per unit. U.K. Same Store performance increased 20.3 percent to $747. Brazilian performance increased 47.6 percent to $586.
  • Adjusted SG&A expenses as a percent of gross profit improved 120 basis points to 73.9 percent. Adjusted Same Store SG&A expenses as a percent of gross profit improved 240 basis points to 74.7 percent in the U.K., and 100 basis points to 71.8 percent in the U.S.
  • Quarter-to-date fully diluted common shares outstanding averaged 24.4 million shares, down roughly 1.8 million shares from the second quarter, due to the Company's redemption of outstanding convertible securities.

Segment Results for Third Quarter 2014 (year-over-year comparable basis)

  • United States:

The Company's U.S. revenues were $2.2 billion, an increase of 15.1 percent. The revenue growth was primarily explained by unit sales increases of 11.5 percent in new vehicles and 12.2 percent in retail used vehicles, as well as an increase of 14.1 percent in parts and service revenue. This strong revenue growth drove gross profit growth of 14.9 percent, reflecting the higher new and used retail volumes, expanded parts and service margins of 70 basis points, and an F&I increase of 17.9 percent, or $75, to $1,450 per retail unit. As the Company has rebalanced its U.S. dealership portfolio over the past 12 months, consolidated results differ significantly from Same Store results.

On a comparable adjusted basis, SG&A expense as a percent of gross profit improved 110 basis points to 72.9 percent, operating margin was 3.6 percent and pretax margin was 2.6 percent. The Company's U.S. operations accounted for 82.8 percent of total revenues, 85.9 percent of total gross profit and 90.1 percent of the Company's adjusted pretax income.

  • United Kingdom:

The Company's U.K. operations accounted for 9.6 percent of total revenues, 8.0 percent of total gross profit, and 9.2 percent of the Company's adjusted pretax income. Total revenue increased 7.4 percent to $252.2 million, and gross profit increased 17.0 percent. Revenue growth was primarily driven by 35.3 percent and 2.5 percent increases in new and used vehicle retail gross profit per unit sold, respectively, and continued strong growth in parts and service revenue which was up 21.8 percent for the quarter.

On a comparable adjusted basis, SG&A expense as a percent of gross profit improved 230 basis points to 74.7 percent.

  • Brazil:

After a challenging second quarter due to further deterioration in the Brazilian auto industry and business disruption due to the World Cup, the Company's Brazilian operation returned to profit in the third quarter.  The return to profitability was driven by an organizational restructuring, which eliminated 150 positions, 10 percent of total headcount.  Additional headcount reductions will occur with the disposal of 3 Renault dealerships in the fourth quarter.

The Company's Brazil operations accounted for 7.6 percent of total revenues, 6.1 percent of total gross profit and 0.6 percent of the Company's adjusted pretax income. Gross profit was $22.9 million on revenues of $198.6 million. Improvements in gross profit per unit sold were driven by a 45.3 percent increase in F&I and a 24.0 percent increase in used vehicle retail margins. Growth in used vehicle retail sales and parts and service were the primary revenue contributors with 12.2 percent and 9.8 percent increases, respectively. F&I, used vehicles, and parts and service gross profit improved by 18.6 percent, 11.7 percent, and 9.1 percent, respectively.

On a comparable adjusted basis, SG&A expense as a percent of gross profit was at 86.9 percent, operating margin was 1.2 percent and pretax margin was 0.2 percent. On a sequential basis, adjusted SG&A expense as a percent of gross profit improved 8.2 percentage points, a significant drop from 95.1 percent in the second quarter of 2014.

"Despite continued weakness in the Brazilian auto market, our Brazilian business returned to profit in the third quarter," said Earl J. Hesterberg, Group 1's president and chief executive officer.  "This was accomplished by quick and decisive action by our Brazilian management to restructure our operations to reflect the lower overall market sales levels. I continue to be impressed by the intensity and professionalism of our Brazilian teammates."

Capital Restructure

As previously announced, on September 4, 2014, the Company redeemed all of its 2.25% Convertible Senior Notes due 2036. In conjunction with the redemption of the 2.25% Convertible Senior Notes, the Company issued an additional $200.0 million aggregate principal amount of its 5.00% Senior Notes due 2022. Also during September 2014, the Company purchased the remaining $22,550,000 in aggregate principal amount of its outstanding 3.00% Convertible Senior Notes due 2020.

"We significantly simplified our balance sheet this quarter by repurchasing both the remainder of our 3.00% Convertible Senior Notes and all of our outstanding 2.25% Convertible Senior Notes," said John C. Rickel, Group 1's senior vice president and chief financial officer. These actions will reduce our ongoing diluted share count by approximately 2.7 million shares, and remove a significant amount of variability from our ongoing quarterly results."

Share Repurchase AuthorizationDuring the quarter, the Company repurchased 230,200 shares at an average price per share of $73.09 for a total of $16.8 million. As of September 30, 2014, approximately $37.7 million remains available under the Company's prior common stock share repurchase authorization. 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.

Corporate Development

As previously announced during the third quarter, the Company acquired a Chevrolet franchise and Mazda franchise in Houston, Texas; a Mercedes-Benz franchise and Sprinter franchise in the greater metropolitan area of San Antonio, Texas; and a Mercedes-Benz franchise in Campo Grande, the capital of the Brazilian state of Mato Grosso do Sul.  These franchises are expected to generate approximately $370 million in annual revenues.

Also during the third quarter, as previously announced, the Company divested its BMW, MINI, Mercedes-Benz and Sprinter franchises and associated dealership real estate on Long Island in New York. The Company also disposed of a Honda franchise in Freehold, New Jersey. In total, these dealerships generated approximately $325 million in trailing-twelve-month revenues.

On September 30, 2014, the Company divested a Volkswagen franchise in Holiday, Florida, which generated trailing-twelve-month revenues of approximately $15 million. Additionally, the Company signed a letter of intent to dispose of three Renault stores in Brazil later this year. Detail and trailing-twelve-month revenues will be disclosed at that time.

Year-to-date, the Company has acquired 12 franchises worldwide that are expected to generate approximately $680 million in annual revenues and has disposed of 7 franchises that generated trailing-twelve-month revenues of roughly $390 million.

Third Quarter Earnings Conference Call Details

Senior management will host a conference call today at 10 a.m. ET to discuss the third quarter financial results and the Company's outlook and strategy.

The conference call will be simulcast live on the Internet at www.group1auto.com, then click on 'Investor Relations' and then 'Events' or through this link: http://www.group1corp.com/events. A webcast replay will be available for 30 days.

The conference call will also be available live by dialing in 15 minutes prior to the start of the call at:

Domestic:          

1-888-317-6003

International:      

1-412-317-6061

Conference ID:    

3198212

A telephonic replay will be available following the call through November 20, 2014 by dialing:

Domestic:          

1-877-344-7529

International:      

1-412-317-0088

Replay Pin:        

1936175

About Group 1 Automotive, Inc.

Group 1 owns and operates 150 automotive dealerships, 192 franchises, and 37 collision centers in the United States, the United Kingdom and Brazil that offer 34 brands of automobiles. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.

Group 1 Automotive can be reached on the Internet at www.group1auto.com.

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, 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," "should," "foresee," "may" or "will" and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. 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. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Investor contacts:Sheila RothManager, Investor RelationsGroup 1 Automotive, Inc.713-647-5741 | sroth@group1auto.com

Media contacts:Pete DeLongchampsV.P. Manufacturer Relations, Financial Services and Public AffairsGroup 1 Automotive, Inc.713-647-5770 | pdelongchamps@group1auto.comorClint WoodsPierpont Communications, Inc.713-627-2223 | cwoods@piercom.com

 

Group 1 Automotive, Inc.

Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

 Three Months Ended September 30, 

2014

2013

% Change

REVENUES:

New vehicle retail sales

$       1,521,246

$       1,386,667

9.7

Used vehicle retail sales

615,924

529,828

16.2

Used vehicle wholesale sales

100,347

85,800

17.0

Parts and service

291,816

255,316

14.3

Finance and insurance

97,115

82,536

17.7

Total revenues

2,626,448

2,340,147

12.2

COST OF SALES:

New vehicle retail sales

1,441,016

1,313,372

9.7

Used vehicle retail sales

571,613

488,346

17.1

Used vehicle wholesale sales

101,643

87,334

16.4

Parts and service

137,467

121,633

13.0

Total cost of sales

2,251,739

2,010,685

12.0

GROSS PROFIT

374,709

329,462

13.7

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

264,233

246,863

7.0

DEPRECIATION AND AMORTIZATION EXPENSE

10,746

9,093

18.2

ASSET IMPAIRMENTS

9,373

565

1,558.9

OPERATING INCOME

90,357

72,941

23.9

OTHER EXPENSE:

Floorplan interest expense

(10,452)

(10,690)

(2.2)

Other interest expense, net

(13,246)

(9,971)

32.8

Loss on repurchase of long-term debt

(22,790)

-

100.0

INCOME BEFORE INCOME TAXES

43,869

52,280

(16.1)

PROVISION FOR INCOME TAXES

(17,707)

(19,515)

(9.3)

NET INCOME

$            26,162

$            32,765

(20.2)

Earnings allocated to participating securities

$            (1,000)

$            (1,320)

(24.2)

Earnings available to diluted common shares

$            25,162

$            31,445

(20.0)

DILUTED EARNINGS PER SHARE

$                1.03

$                1.19

(13.4)

Weighted average dilutive common shares outstanding

24,432

26,342

(7.3)

Weighted average participating securities

971

1,100

(11.7)

Total weighted average shares outstanding

25,403

27,442

(7.4)

 Nine Months Ended September 30, 

2014

2013

% Change

REVENUES:

New vehicle retail sales

$       4,256,146

$       3,873,121

9.9

Used vehicle retail sales

1,743,071

1,536,031

13.5

Used vehicle wholesale sales

284,491

243,667

16.8

Parts and service

844,340

753,776

12.0

Finance and insurance

270,901

232,494

16.5

Total revenues

7,398,949

6,639,089

11.4

COST OF SALES:

New vehicle retail sales

4,028,164

3,656,825

10.2

Used vehicle retail sales

1,610,293

1,410,768

14.1

Used vehicle wholesale sales

281,434

242,267

16.2

Parts and service

397,079

358,004

10.9

Total cost of sales

6,316,970

5,667,864

11.5

GROSS PROFIT

1,081,979

971,225

11.4

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

793,761

731,455

8.5

DEPRECIATION AND AMORTIZATION EXPENSE

31,424

26,390

19.1

ASSET IMPAIRMENTS

11,094

1,174

845.0

OPERATING INCOME

245,700

212,206

15.8

OTHER EXPENSE:

Floorplan interest expense

(31,695)

(30,927)

2.5

Other interest expense, net

(36,326)

(28,783)

26.2

Other expense, net

-

(789)

(100.0)

Loss on repurchase of long-term debt

(46,403)

-

100.0

INCOME BEFORE INCOME TAXES

131,276

151,707

(13.5)

PROVISION FOR INCOME TAXES

(56,949)

(59,436)

(4.2)

NET INCOME

$            74,327

$            92,271

(19.4)

Earnings allocated to participating securities

$            (2,769)

$            (3,843)

(27.9)

Earnings available to diluted common shares

$            71,558

$            88,428

(19.1)

DILUTED EARNINGS PER SHARE

$                2.82

$                3.52

(19.9)

Weighted average dilutive common shares outstanding

25,363

25,153

0.8

Weighted average participating securities

973

1,095

(11.1)

Total weighted average shares outstanding

26,336

26,248

0.3

 

Group 1 Automotive, Inc.

Consolidated Balance Sheets

(Dollars in thousands)

September 30,

December 31,

2014

2013

% Change

 ASSETS: 

(Unaudited)

 CURRENT ASSETS: 

 Cash and cash equivalents 

$                   50,652

$                 20,215

150.6

 Contracts in transit and vehicle receivables, net 

190,641

225,156

(15.3)

 Accounts and notes receivable, net 

138,735

135,058

2.7

 Inventories, net 

1,490,520

1,542,318

(3.4)

 Deferred income taxes 

17,137

21,150

(19.0)

 Prepaid expenses and other current assets 

41,570

24,041

72.9

 Total current assets 

1,929,255

1,967,938

(2.0)

 PROPERTY AND EQUIPMENT, net 

859,339

796,356

7.9

 GOODWILL AND INTANGIBLE FRANCHISE RIGHTS 

1,160,666

1,038,808

11.7

 OTHER ASSETS 

13,249

16,376

(19.1)

 Total assets 

$             3,962,509

$             3,819,478

3.7

 LIABILITIES AND STOCKHOLDERS' EQUITY: 

 CURRENT LIABILITIES: 

 Floorplan notes payable - credit facility and other 

$             1,077,097

$             1,143,104

(5.8)

 Offset account related to floorplan notes payable - credit facility 

(37,516)

(56,198)

(33.2)

 Floorplan notes payable - manufacturer affiliates 

293,846

346,572

(15.2)

 Offset account related to floorplan notes payable - manufacturer affiliates 

(25,000)

100.0

 Current maturities of long-term debt and short-term financing 

41,021

36,225

13.2

 Accounts payable 

292,971

254,930

14.9

 Accrued expenses 

160,220

140,543

14.0

 Total current liabilities 

1,802,639

1,865,176

(3.4)

 2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $0 and $182,753 at September 30, 2014 and December 31, 2013, respectively) 

160,334

(100.0)

 3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of $0 and $115,000 at September 30, 2014 and December 31, 2013, respectively) 

84,305

(100.0)

 5.00% SENIOR NOTES (aggregate principal of $550,000 at September 30, 2014) 

539,822

100.0

 MORTGAGE FACILITY, net of current maturities 

55,746

64,271

(13.3)

 ACQUISITION LINE 

60,000

(100.0)

 OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, net of current maturities 

289,652

250,958

15.4

 CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities 

53,279

43,821

21.6

 DEFERRED INCOME TAXES 

148,304

152,291

(2.6)

 LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES 

23,483

26,078

(10.0)

 OTHER LIABILITIES 

64,259

47,975

33.9

 COMMITMENTS AND CONTINGENCIES 

 TEMPORARY EQUITY - REDEEMABLE EQUITY PORTION OF THE 2.25% and 3.00% CONVERTIBLE SENIOR NOTES 

29,094

(100.0)

 STOCKHOLDERS' EQUITY: 

 Common stock 

258

257

0.4

 Additional paid-in capital 

286,354

368,641

(22.3)

 Retained earnings 

838,174

776,101

8.0

 Accumulated other comprehensive loss 

(59,500)

(51,677)

15.1

 Treasury stock 

(79,961)

(58,147)

37.5

 Total stockholders' equity 

985,325

1,035,175

(4.8)

 Total liabilities and stockholders' equity 

$             3,962,509

$             3,819,478

3.7

 

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2014 (%)

2013 (%)

2014 (%)

2013 (%)

NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:

Region

Geographic Market

East

Massachusetts

6.6

5.5

5.9

5.9

Georgia

4.8

3.3

4.7

3.6

New Jersey

2.7

4.1

3.2

4.2

New Hampshire

2.1

2.6

2.2

2.4

Louisiana

1.6

2.1

1.7

2.3

South Carolina

1.6

1.5

1.5

1.5

Mississippi

1.4

1.6

1.4

1.6

Florida

1.4

1.3

1.4

1.3

New York

1.2

2.4

1.7

2.7

Alabama

0.7

0.8

0.8

0.8

Maryland

0.5

0.6

0.5

0.6

24.6

25.8

25.0

26.9

West

Texas

37.1

32.0

35.4

32.4

California

9.3

8.7

9.6

10.7

Oklahoma

8.6

8.0

8.4

7.8

Kansas

2.1

2.5

2.3

2.5

Louisiana

0.6

0.7

0.6

0.3

57.7

51.9

56.3

53.7

International

Brazil

9.2

12.1

9.8

10.2

United Kingdom

8.5

10.2

8.9

9.2

100.0

100.0

100.0

100.0

NEW VEHICLE UNIT SALES BRAND MIX:

Toyota/Scion/Lexus

28.3

26.9

27.2

27.0

BMW/MINI

10.7

11.1

11.2

10.7

Honda/Acura

10.5

11.6

11.2

12.1

Ford/Lincoln

10.4

12.3

11.1

11.8

Nissan/Infiniti

8.9

9.8

9.3

10.2

Chevrolet/GMC/Buick/Cadillac

7.0

4.6

6.0

4.8

Volkswagen/Audi/Porsche

6.2

6.6

6.3

6.5

Hyundai/Kia

5.7

5.0

5.5

4.7

Chrysler/Dodge/Jeep/RAM

4.4

3.9

4.4

4.0

Mercedes-Benz/smart/Sprinter

4.2

3.8

4.2

4.2

Other

3.7

4.4

3.6

4.0

100.0

100.0

100.0

100.0

 

Group 1 Automotive, Inc.

Additional Information - U.S.

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$         1,245,430

$       1,091,221

14.1

Used vehicle retail sales

515,911

443,716

16.3

Used vehicle wholesale sales

75,272

59,833

25.8

Total used

591,183

503,549

17.4

Parts and service

249,724

218,880

14.1

Finance and insurance

89,268

75,728

17.9

Total

$         2,175,605

$       1,889,378

15.1

GROSS MARGIN %:

New vehicle retail sales

5.0

5.0

Used vehicle retail sales

7.4

8.1

Used vehicle wholesale sales

(1.9)

(2.3)

Total used

6.2

6.9

Parts and service

53.6

52.9

Finance and insurance

100.0

100.0

Total

14.8

14.8

GROSS PROFIT:

New vehicle retail sales

$              61,975

$            54,086

14.6

Used vehicle retail sales

38,251

35,937

6.4

Used vehicle wholesale sales

(1,431)

(1,373)

4.2

Total used

36,820

34,564

6.5

Parts and service

133,874

115,887

15.5

Finance and insurance

89,268

75,728

17.9

Total

$            321,937

$          280,265

14.9

UNITS SOLD:

Retail new vehicles sold

36,649

32,866

11.5

Retail used vehicles sold

24,917

22,206

12.2

Wholesale used vehicles sold

11,984

10,455

14.6

Total used

36,901

32,661

13.0

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$              33,983

$            33,202

2.4

Used vehicle retail

$              20,705

$            19,982

3.6

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$                1,691

$              1,646

2.7

Used vehicle retail sales

1,535

1,618

(5.1)

Used vehicle wholesale sales

(119)

(131)

(9.2)

Total used

998

1,058

(5.7)

Finance and insurance (per retail unit)

$                1,450

$              1,375

5.5

OTHER: (1)

SG&A expenses

$            234,849

$          207,494

13.2

SG&A as % revenues

10.8

11.0

SG&A as % gross profit

72.9

74.0

Operating margin %

3.6

3.4

Pretax margin %

2.6

2.5

INTEREST EXPENSE:

Floorplan interest

$              (8,543)

$             (8,087)

5.6

Floorplan assistance

11,876

10,108

17.5

Net floorplan income

$                3,333

$               2,021

64.9

Other interest expense, net

$            (12,265)

$             (9,650)

27.1

Nine Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$         3,449,303

$       3,132,461

10.1

Used vehicle retail sales

1,440,473

1,310,629

9.9

Used vehicle wholesale sales

208,392

174,227

19.6

Total used

1,648,865

1,484,856

11.0

Parts and service

723,839

659,318

9.8

Finance and insurance

248,820

216,184

15.1

Total

$         6,070,827

$       5,492,819

10.5

GROSS MARGIN %:

New vehicle retail sales

5.1

5.2

Used vehicle retail sales

8.0

8.5

Used vehicle wholesale sales

0.9

0.6

Total used

7.1

7.6

Parts and service

53.6

53.2

Finance and insurance

100.0

100.0

Total

15.3

15.4

GROSS PROFIT:

New vehicle retail sales

$            175,006

$          163,994

6.7

Used vehicle retail sales

114,613

111,897

2.4

Used vehicle wholesale sales

1,964

1,000

96.4

Total used

116,577

112,897

3.3

Parts and service

388,042

350,608

10.7

Finance and insurance

248,820

216,184

15.1

Total

$            928,445

$          843,683

10.0

UNITS SOLD:

Retail new vehicles sold

101,281

94,233

7.5

Retail used vehicles sold

70,367

65,250

7.8

Wholesale used vehicles sold

32,395

30,052

7.8

Total used

102,762

95,302

7.8

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$              34,057

$            33,242

2.5

Used vehicle retail

$              20,471

$            20,086

1.9

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$                1,728

$              1,740

(0.7)

Used vehicle retail sales

1,629

1,715

(5.0)

Used vehicle wholesale sales

61

33

84.8

Total used

1,134

1,185

(4.3)

Finance and insurance (per retail unit)

$                1,450

$              1,356

6.9

OTHER: (1)

SG&A expenses

$            677,142

$          619,562

9.3

SG&A as % revenues

11.2

11.3

SG&A as % gross profit

72.9

73.4

Operating margin %

3.7

3.7

Pretax margin %

2.7

2.7

INTEREST EXPENSE:

 Floorplan interest 

$            (25,489)

$           (25,027)

1.8

 Floorplan assistance 

32,969

28,291

16.5

 Net floorplan income 

$                7,480

$               3,264

129.2

 Other interest expense, net 

$            (34,327)

$           (27,991)

22.6

(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 - U.K.

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$       134,859

$        136,740

(1.4)

Used vehicle retail sales

70,163

59,508

17.9

Used vehicle wholesale sales

21,110

16,959

24.5

Total used

91,273

76,467

19.4

Parts and service

21,272

17,470

21.8

Finance and insurance

4,797

4,237

13.2

Total

$       252,201

$        234,914

7.4

GROSS MARGIN %:

New vehicle retail sales

6.9

5.7

Used vehicle retail sales

5.9

6.5

Used vehicle wholesale sales

(0.8)

(1.3)

Total used

4.4

4.8

Parts and service

55.2

56.1

Finance and insurance

100.0

100.0

Total

11.8

10.9

GROSS PROFIT:

New vehicle retail sales

$           9,305

$            7,848

18.6

Used vehicle retail sales

4,165

3,849

8.2

Used vehicle wholesale sales

(174)

(214)

(18.7)

Total used

3,991

3,635

9.8

Parts and service

11,746

9,793

19.9

Finance and insurance

4,797

4,237

13.2

Total

$         29,839

$          25,513

17.0

UNITS SOLD:

Retail new vehicles sold

3,773

4,306

(12.4)

Retail used vehicles sold

2,649

2,510

5.5

Wholesale used vehicles sold

2,183

2,078

5.1

Total used

4,832

4,588

5.3

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$         35,743

$          31,756

12.6

Used vehicle retail

$         26,487

$          23,708

11.7

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$           2,466

$            1,823

35.3

Used vehicle retail sales

1,572

1,533

2.5

Used vehicle wholesale sales

(80)

(103)

(22.3)

Total used

826

792

4.3

Finance and insurance (per retail unit)

$              747

$               622

20.1

OTHER:

SG&A expenses

$         22,275

$          19,656

13.3

SG&A as % revenues

8.8

8.4

SG&A as % gross profit

74.7

77.0

Operating margin %

2.7

2.2

Pretax margin %

2.3

1.9

INTEREST EXPENSE:

Floorplan interest

$             (419)

$             (425)

(1.4)

Floorplan assistance

246

111

121.6

Net floorplan expense

$             (173)

$             (314)

(44.9)

Other interest expense, net

$             (442)

$             (293)

50.9

Nine Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$       397,263

$        342,038

16.1

Used vehicle retail sales

214,900

162,901

31.9

Used vehicle wholesale sales

62,304

48,682

28.0

Total used

277,204

211,583

31.0

Parts and service

62,843

49,265

27.6

Finance and insurance

13,916

10,542

32.0

Total

$       751,226

$        613,428

22.5

GROSS MARGIN %:

New vehicle retail sales

6.8

6.3

Used vehicle retail sales

5.9

6.2

Used vehicle wholesale sales

(1.5)

Total used

4.6

4.4

Parts and service

55.1

54.5

Finance and insurance

100.0

100.0

Total

11.7

11.2

GROSS PROFIT:

New vehicle retail sales

$         26,843

$          21,641

24.0

Used vehicle retail sales

12,684

10,117

25.4

Used vehicle wholesale sales

(4)

(743)

(99.5)

Total used

12,680

9,374

35.3

Parts and service

34,655

26,871

29.0

Finance and insurance

13,916

10,542

32.0

Total

$         88,094

$          68,428

28.7

UNITS SOLD:

Retail new vehicles sold

11,144

10,738

3.8

Retail used vehicles sold

8,108

6,762

19.9

Wholesale used vehicles sold

6,539

5,772

13.3

Total used

14,647

12,534

16.9

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$         35,648

$          31,853

11.9

Used vehicle retail

$         26,505

$          24,091

10.0

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$           2,409

$            2,015

19.6

Used vehicle retail sales

1,564

1,496

4.5

Used vehicle wholesale sales

(1)

(129)

(99.2)

Total used

866

748

15.8

Finance and insurance (per retail unit)

$              723

$               602

20.1

OTHER:(1)

SG&A expenses

$         67,063

$          54,120

23.9

SG&A as % revenues

8.9

8.8

SG&A as % gross profit

76.1

79.1

Operating margin %

2.5

2.0

Pretax margin %

2.1

1.7

INTEREST EXPENSE:

 Floorplan interest 

$          (1,188)

$          (1,152)

3.1

 Floorplan assistance 

504

111

354.1

 Net floorplan expense 

$             (684)

$          (1,041)

(34.3)

 Other interest expense, net 

$          (1,402)

$             (800)

75.3

(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 - Brazil

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$       140,957

$        158,706

(11.2)

Used vehicle retail sales

29,850

26,604

12.2

Used vehicle wholesale sales

3,965

9,008

(56.0)

Total used

33,815

35,612

(5.0)

Parts and service

20,820

18,966

9.8

Finance and insurance

3,050

2,571

18.6

Total

$       198,642

$        215,855

(8.0)

GROSS MARGIN %:

New vehicle retail sales

6.3

7.2

Used vehicle retail sales

6.3

6.4

Used vehicle wholesale sales

7.8

0.6

Total used

6.5

4.9

Parts and service

41.9

42.2

Finance and insurance

100.0

100.0

Total

11.5

11.0

GROSS PROFIT:

New vehicle retail sales

$           8,950

$          11,361

(21.2)

Used vehicle retail sales

1,895

1,696

11.7

Used vehicle wholesale sales

309

53

483.0

Total used

2,204

1,749

26.0

Parts and service

8,729

8,003

9.1

Finance and insurance

3,050

2,571

18.6

Total

$         22,933

$          23,684

(3.2)

UNITS SOLD:

Retail new vehicles sold

4,072

5,139

(20.8)

Retail used vehicles sold

1,210

1,343

(9.9)

Wholesale used vehicles sold

583

912

(36.1)

Total used

1,793

2,255

(20.5)

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$         34,616

$          30,883

12.1

Used vehicle retail

$         24,669

$          19,809

24.5

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$           2,198

$            2,211

(0.6)

Used vehicle retail sales

1,566

1,263

24.0

Used vehicle wholesale sales

530

58

813.8

Total used

1,229

776

58.4

Finance and insurance (per retail unit)

$              577

$               397

45.3

OTHER: (1)

SG&A expenses

$         19,920

$          20,277

(1.8)

SG&A as % revenues

10.0

9.4

SG&A as % gross profit

86.9

85.6

Operating margin %

1.2

1.4

Pretax margin %

0.2

0.3

INTEREST EXPENSE:

 Floorplan interest 

$          (1,490)

$          (2,178)

(31.6)

 Floorplan assistance 

-

 Net floorplan expense 

$          (1,490)

$          (2,178)

(31.6)

 Other interest expense, net 

$             (539)

$               (29)

1,758.6

Nine Months Ended September 30,

2014

2013 (2)

% Change

REVENUES:

New vehicle retail sales

$       409,580

$        398,622

2.7

Used vehicle retail sales

87,698

62,501

40.3

Used vehicle wholesale sales

13,795

20,758

(33.5)

Total used

101,493

83,259

21.9

Parts and service

57,658

45,193

27.6

Finance and insurance

8,165

5,768

41.6

Total

$       576,896

$        532,842

8.3

GROSS MARGIN %:

New vehicle retail sales

6.4

7.7

Used vehicle retail sales

6.2

5.2

Used vehicle wholesale sales

8.0

5.5

Total used

6.5

5.3

Parts and service

42.6

40.5

Finance and insurance

100.0

100.0

Total

11.3

11.1

GROSS PROFIT:

New vehicle retail sales

$         26,133

$          30,661

(14.8)

Used vehicle retail sales

5,481

3,249

68.7

Used vehicle wholesale sales

1,097

1,143

(4.0)

Total used

6,578

4,392

49.8

Parts and service

24,564

18,293

34.3

Finance and insurance

8,165

5,768

41.6

Total

$         65,440

$          59,114

10.7

UNITS SOLD:

Retail new vehicles sold

12,274

11,967

2.6

Retail used vehicles sold

3,899

2,919

33.6

Wholesale used vehicles sold

1,830

2,028

(9.8)

Total used

5,729

4,947

15.8

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$         33,370

$          33,310

0.2

Used vehicle retail

$         22,492

$          21,412

5.0

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$           2,129

$            2,562

(16.9)

Used vehicle retail sales

1,406

1,113

26.3

Used vehicle wholesale sales

599

564

6.2

Total used

1,148

888

29.3

Finance and insurance (per retail unit)

$              505

$               387

30.5

OTHER: (1)

SG&A expenses

$         60,342

$          48,748

23.8

SG&A as % revenues

10.5

9.1

SG&A as % gross profit

92.2

82.5

Operating margin %

0.6

1.7

Pretax margin %

(0.4)

0.9

INTEREST EXPENSE:

 Floorplan interest 

$          (5,018)

$          (4,748)

5.7

 Floorplan assistance 

-

 Net floorplan expense 

$          (5,018)

$          (4,748)

5.7

 Other interest (expense) income, net 

$             (597)

$                   7

(8,628.6)

(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.

(2)

Results are for the period from the date of acquisition (February 28, 2013) through September 30, 2013.

 

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$     1,521,246

$     1,386,667

9.7

Used vehicle retail sales

615,924

529,828

16.2

Used vehicle wholesale sales

100,347

85,800

17.0

Total used

716,271

615,628

16.3

Parts and service

291,816

255,316

14.3

Finance and insurance

97,115

82,536

17.7

Total

$     2,626,448

$     2,340,147

12.2

GROSS MARGIN %:

New vehicle retail sales

5.3

5.3

Used vehicle retail sales

7.2

7.8

Used vehicle wholesale sales

(1.3)

(1.8)

Total used

6.0

6.5

Parts and service

52.9

52.4

Finance and insurance

100.0

100.0

Total

14.3

14.1

GROSS PROFIT:

New vehicle retail sales

$          80,230

$          73,295

9.5

Used vehicle retail sales

44,311

41,482

6.8

Used vehicle wholesale sales

(1,296)

(1,534)

(15.5)

Total used

43,015

39,948

7.7

Parts and service

154,349

133,683

15.5

Finance and insurance

97,115

82,536

17.7

Total

$        374,709

$        329,462

13.7

UNITS SOLD:

Retail new vehicles sold

44,494

42,311

5.2

Retail used vehicles sold

28,776

26,059

10.4

Wholesale used vehicles sold

14,750

13,445

9.7

Total used

43,526

39,504

10.2

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$          34,190

$          32,773

4.3

Used vehicle retail

$          21,404

$          20,332

5.3

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$            1,803

$            1,732

4.1

Used vehicle retail sales

1,540

1,592

(3.3)

Used vehicle wholesale sales

(88)

(114)

(22.8)

Total used

988

1,011

(2.3)

Finance and insurance (per retail unit)

$            1,325

$            1,207

9.8

OTHER: (1)

SG&A expenses

$        277,044

$        247,427

12.0

SG&A as % revenues

10.5

10.6

SG&A as % gross profit

73.9

75.1

Operating margin %

3.3

3.1

Pretax margin %

2.4

2.2

INTEREST EXPENSE:

 Floorplan interest 

$         (10,452)

$         (10,690)

(2.2)

 Floorplan assistance 

12,122

10,219

18.6

 Net floorplan income (expense) 

$            1,670

$              (471)

454.6

 Other interest expense, net 

$         (13,246)

$           (9,971)

32.8

Nine Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$     4,256,146

$     3,873,121

9.9

Used vehicle retail sales

1,743,071

1,536,031

13.5

Used vehicle wholesale sales

284,491

243,667

16.8

Total used

2,027,562

1,779,698

13.9

Parts and service

844,340

753,776

12.0

Finance and insurance

270,901

232,494

16.5

Total

$     7,398,949

$     6,639,089

11.4

GROSS MARGIN %:

New vehicle retail sales

5.4

5.6

Used vehicle retail sales

7.6

8.2

Used vehicle wholesale sales

1.1

0.6

Total used

6.7

7.1

Parts and service

53.0

52.5

Finance and insurance

100.0

100.0

Total

14.6

14.6

GROSS PROFIT:

New vehicle retail sales

$        227,982

$        216,296

5.4

Used vehicle retail sales

132,778

125,263

6.0

Used vehicle wholesale sales

3,057

1,400

118.4

Total used

135,835

126,663

7.2

Parts and service

447,261

395,772

13.0

Finance and insurance

270,901

232,494

16.5

Total

$     1,081,979

$        971,225

11.4

UNITS SOLD:

Retail new vehicles sold

124,699

116,938

6.6

Retail used vehicles sold

82,374

74,931

9.9

Wholesale used vehicles sold

40,764

37,852

7.7

Total used

123,138

112,783

9.2

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$          34,131

$          33,121

3.1

Used vehicle retail

$          21,160

$          20,499

3.2

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$            1,828

$            1,850

(1.2)

Used vehicle retail sales

1,612

1,672

(3.6)

Used vehicle wholesale sales

75

37

102.7

Total used

1,103

1,123

(1.8)

Finance and insurance (per retail unit)

$            1,308

$            1,212

7.9

OTHER: (1)

SG&A expenses

$        804,547

$        722,430

11.4

SG&A as % revenues

10.9

10.9

SG&A as % gross profit

74.4

74.4

Operating margin %

3.3

3.3

Pretax margin %

2.4

2.5

INTEREST EXPENSE:

 Floorplan interest 

$         (31,695)

$         (30,927)

2.5

 Floorplan assistance 

33,473

28,402

17.9

 Net floorplan income (expense) 

$             1,778

$           (2,525)

170.4

 Other interest expense, net 

$         (36,326)

$         (28,783)

26.2

(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 U.S. (1)

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$       1,120,864

$       1,053,601

6.4

Used vehicle retail sales

459,223

429,480

6.9

Used vehicle wholesale sales

67,404

57,456

17.3

Total used

526,627

486,936

8.2

Parts and service

225,737

212,800

6.1

Finance and insurance

81,553

74,479

9.5

Total

$       1,954,781

$       1,827,816

6.9

GROSS MARGIN %:

New vehicle retail sales

4.9

5.0

Used vehicle retail sales

7.5

8.2

Used vehicle wholesale sales

(1.6)

(1.6)

Total used

6.3

7.0

Parts and service

53.6

52.8

Finance and insurance

100.0

100.0

Total

14.9

15.0

GROSS PROFIT:

New vehicle retail sales

$            55,456

$            52,448

5.7

Used vehicle retail sales

34,303

35,055

(2.1)

Used vehicle wholesale sales

(1,091)

(900)

21.2

Total used

33,212

34,155

(2.8)

Parts and service

120,951

112,461

7.5

Finance and insurance

81,553

74,479

9.5

Total

$          291,172

$          273,543

6.4

UNITS SOLD:

Retail new vehicles sold

33,100

31,717

4.4

Retail used vehicles sold

22,180

21,521

3.1

Wholesale used vehicles sold

10,800

10,128

6.6

Total used

32,980

31,649

4.2

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$            33,863

$            33,219

1.9

Used vehicle retail

$            20,704

$            19,956

3.7

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$              1,675

$              1,654

1.3

Used vehicle retail sales

1,547

1,629

(5.0)

Used vehicle wholesale sales

(101)

(89)

13.5

Total used

1,007

1,079

(6.7)

Finance and insurance (per retail unit)

$              1,475

$              1,399

5.4

OTHER:(2)

SG&A expenses

$          209,060

$          199,003

5.1

SG&A as % revenues

10.7

10.9

SG&A as % gross profit

71.8

72.8

Operating margin %

3.8

3.6

Nine Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$       3,179,584

$       3,016,656

5.4

Used vehicle retail sales

1,324,402

1,268,399

4.4

Used vehicle wholesale sales

192,324

166,340

15.6

Total used

1,516,726

1,434,739

5.7

Parts and service

669,764

634,049

5.6

Finance and insurance

233,426

210,726

10.8

Total

$       5,599,500

$       5,296,170

5.7

GROSS MARGIN %:

New vehicle retail sales

5.1

5.3

Used vehicle retail sales

7.9

8.6

Used vehicle wholesale sales

1.3

1.0

Total used

7.1

7.7

Parts and service

53.5

53.2

Finance and insurance

100.0

100.0

Total

15.4

15.4

GROSS PROFIT:

New vehicle retail sales

$          160,865

$          159,600

0.8

Used vehicle retail sales

104,774

108,705

(3.6)

Used vehicle wholesale sales

2,416

1,677

44.1

Total used

107,190

110,382

(2.9)

Parts and service

358,367

337,018

6.3

Finance and insurance

233,426

210,726

10.8

Total

$          859,848

$          817,726

5.2

UNITS SOLD:

Retail new vehicles sold

93,447

90,283

3.5

Retail used vehicles sold

64,336

63,070

2.0

Wholesale used vehicles sold

30,203

28,766

5.0

Total used

94,539

91,836

2.9

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$            34,026

$            33,413

1.8

Used vehicle retail

$            20,586

$            20,111

2.4

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$              1,721

$              1,768

(2.7)

Used vehicle retail sales

1,629

1,724

(5.5)

Used vehicle wholesale sales

80

58

37.9

Total used

1,134

1,202

(5.7)

Finance and insurance (per retail unit)

$              1,479

$              1,374

7.6

OTHER: (2)

SG&A expenses

$          620,825

$          591,946

4.9

SG&A as % revenues

11.1

11.2

SG&A as % gross profit

72.2

72.4

Operating margin %

3.8

3.8

(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.

(2)

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 U.K. (1)

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$      134,858

$      136,738

(1.4)

Used vehicle retail sales

70,164

59,508

17.9

Used vehicle wholesale sales

21,110

16,960

24.5

Total used

91,274

76,468

19.4

Parts and service

21,272

17,471

21.8

Finance and insurance

4,797

4,233

13.3

Total

$      252,201

$      234,910

7.4

GROSS MARGIN %:

New vehicle retail sales

6.9

5.7

Used vehicle retail sales

5.9

6.5

Used vehicle wholesale sales

(0.8)

(1.3)

Total used

4.4

4.8

Parts and service

55.2

56.1

Finance and insurance

100.0

100.0

Total

11.8

10.9

GROSS PROFIT:

New vehicle retail sales

$          9,303

$          7,848

18.5

Used vehicle retail sales

4,166

3,848

8.3

Used vehicle wholesale sales

(175)

(213)

(17.8)

Total used

3,991

3,635

9.8

Parts and service

11,748

9,794

20.0

Finance and insurance

4,797

4,233

13.3

Total

$        29,839

$        25,510

17.0

UNITS SOLD:

Retail new vehicles sold

3,773

4,306

(12.4)

Retail used vehicles sold

2,649

2,510

5.5

Wholesale used vehicles sold

2,183

2,078

5.1

Total used

4,832

4,588

5.3

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$        35,743

$        31,755

12.6

Used vehicle retail

$        26,487

$        23,708

11.7

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$          2,466

$          1,823

35.3

Used vehicle retail sales

1,573

1,533

2.6

Used vehicle wholesale sales

(80)

(103)

(22.3)

Total used

826

792

4.3

Finance and insurance (per retail unit)

$             747

$             621

20.3

OTHER: 

SG&A expenses

$        22,278

$        19,662

13.3

SG&A as % revenues

8.8

8.4

SG&A as % gross profit

74.7

77.1

Operating margin %

2.7

2.2

Nine Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$      388,921

$      342,038

13.7

Used vehicle retail sales

202,968

162,901

24.6

Used vehicle wholesale sales

60,407

48,682

24.1

Total used

263,375

211,583

24.5

Parts and service

59,860

49,265

21.5

Finance and insurance

13,281

10,530

26.1

Total

$      725,437

$      613,416

18.3

GROSS MARGIN %:

New vehicle retail sales

6.8

6.3

Used vehicle retail sales

5.9

6.2

Used vehicle wholesale sales

(0.1)

(1.5)

Total used

4.5

4.4

Parts and service

55.3

54.5

Finance and insurance

100.0

100.0

Total

11.7

11.1

GROSS PROFIT:

New vehicle retail sales

$        26,514

$        21,629

22.6

Used vehicle retail sales

11,996

10,112

18.6

Used vehicle wholesale sales

(44)

(743)

(94.1)

Total used

11,952

9,369

27.6

Parts and service

33,098

26,862

23.2

Finance and insurance

13,281

10,530

26.1

Total

$        84,845

$        68,390

24.1

UNITS SOLD:

Retail new vehicles sold

10,728

10,738

(0.1)

Retail used vehicles sold

7,422

6,762

9.8

Wholesale used vehicles sold

6,102

5,772

5.7

Total used

13,524

12,534

7.9

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$        36,253

$        31,853

13.8

Used vehicle retail

$        27,347

$        24,091

13.5

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$          2,471

$          2,014

22.7

Used vehicle retail sales

1,616

1,495

8.1

Used vehicle wholesale sales

(7)

(129)

(94.6)

Total used

884

747

18.3

Finance and insurance (per retail unit)

$             732

$             602

21.6

OTHER: (2)

SG&A expenses

$        64,254

$        54,117

18.7

SG&A as % revenues

8.9

8.8

SG&A as % gross profit

75.7

79.1

Operating margin %

2.5

2.0

(1)

Same store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same store results also include the activities of our corporate office.

(2)

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 Brazil (1)

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$     139,640

$     158,705

(12.0)

Used vehicle retail sales

29,408

26,604

10.5

Used vehicle wholesale sales

3,965

9,008

(56.0)

Total used

33,373

35,612

(6.3)

Parts and service

20,560

18,966

8.4

Finance and insurance

3,051

2,571

18.7

Total

$     196,624

$     215,854

(8.9)

GROSS MARGIN %:

New vehicle retail sales

6.4

7.2

Used vehicle retail sales

6.3

6.4

Used vehicle wholesale sales

7.8

0.6

Total used

6.5

4.9

Parts and service

42.0

42.2

Finance and insurance

100.0

100.0

Total

11.6

11.0

GROSS PROFIT:

New vehicle retail sales

$         8,883

$       11,359

(21.8)

Used vehicle retail sales

1,862

1,697

9.7

Used vehicle wholesale sales

310

53

484.9

Total used

2,172

1,750

24.1

Parts and service

8,627

8,003

7.8

Finance and insurance

3,051

2,571

18.7

Total

$       22,733

$       23,683

(4.0)

UNITS SOLD:

Retail new vehicles sold

4,013

5,139

(21.9)

Retail used vehicles sold

1,192

1,343

(11.2)

Wholesale used vehicles sold

571

912

(37.4)

Total used

1,763

2,255

(21.8)

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$       34,797

$       30,882

12.7

Used vehicle retail

$       24,671

$       19,809

24.5

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$         2,214

$         2,210

0.2

Used vehicle retail sales

1,562

1,264

23.6

Used vehicle wholesale sales

543

58

836.2

Total used

1,232

776

58.8

Finance and insurance (per retail unit)

$            586

$            397

47.6

OTHER:(2)

SG&A expenses

$       19,499

$       20,276

(3.8)

SG&A as % revenues

9.9

9.4

SG&A as % gross profit

85.8

85.6

Operating margin %

1.4

1.4

Nine Months Ended September 30,

2014

2013 (3)

% Change

REVENUES:

New vehicle retail sales

$     320,847

$     398,622

(19.5)

Used vehicle retail sales

65,774

62,501

5.2

Used vehicle wholesale sales

10,005

20,758

(51.8)

Total used

75,779

83,259

(9.0)

Parts and service

45,622

45,193

0.9

Finance and insurance

6,532

5,768

13.2

Total

$     448,780

$     532,842

(15.8)

GROSS MARGIN %:

New vehicle retail sales

6.4

7.7

Used vehicle retail sales

6.2

5.2

Used vehicle wholesale sales

8.0

5.5

Total used

6.4

5.3

Parts and service

42.0

40.5

Finance and insurance

100.0

100.0

Total

11.4

11.1

GROSS PROFIT:

New vehicle retail sales

$       20,598

$       30,661

(32.8)

Used vehicle retail sales

4,057

3,249

24.9

Used vehicle wholesale sales

802

1,143

(29.8)

Total used

4,859

4,392

10.6

Parts and service

19,150

18,293

4.7

Finance and insurance

6,532

5,768

13.2

Total

$       51,139

$       59,114

(13.5)

UNITS SOLD:

Retail new vehicles sold

9,343

11,967

(21.9)

Retail used vehicles sold

2,797

2,919

(4.2)

Wholesale used vehicles sold

1,292

2,028

(36.3)

Total used

4,089

4,947

(17.3)

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$       34,341

$       33,310

3.1

Used vehicle retail

$       23,516

$       21,412

9.8

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$         2,205

$         2,562

(13.9)

Used vehicle retail sales

1,450

1,113

30.3

Used vehicle wholesale sales

621

564

10.1

Total used

1,188

888

33.8

Finance and insurance (per retail unit)

$            538

$            387

39.0

OTHER: (2)

SG&A expenses

$       46,706

$       48,748

(4.2)

SG&A as % revenues

10.4

9.1

SG&A as % gross profit

91.3

82.5

Operating margin %

0.7

1.7

(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.

(2)

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.

(3)

Results are for the period from the date of acquisition (February 28, 2013) through September 30, 2013.

 

Group 1 Automotive, Inc.

Additional Information - Same Store Consolidated (1)

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$         1,395,362

$         1,349,044

3.4

Used vehicle retail sales

558,795

515,592

8.4

Used vehicle wholesale sales

92,479

83,424

10.9

Total used

651,274

599,016

8.7

Parts and service

267,569

249,237

7.4

Finance and insurance

89,401

81,283

10.0

Total

$         2,403,606

$         2,278,580

5.5

GROSS MARGIN %:

New vehicle retail sales

5.3

5.3

Used vehicle retail sales

7.2

7.9

Used vehicle wholesale sales

(1.0)

(1.3)

Total used

6.0

6.6

Parts and service

52.8

52.3

Finance and insurance

100.0

100.0

Total

14.3

14.2

GROSS PROFIT:

New vehicle retail sales

$              73,642

$              71,655

2.8

Used vehicle retail sales

40,331

40,600

(0.7)

Used vehicle wholesale sales

(956)

(1,060)

(9.8)

Total used

39,375

39,540

(0.4)

Parts and service

141,326

130,258

8.5

Finance and insurance

89,401

81,283

10.0

Total

$            343,744

$            322,736

6.5

UNITS SOLD:

Retail new vehicles sold

40,886

41,162

(0.7)

Retail used vehicles sold

26,021

25,374

2.5

Wholesale used vehicles sold

13,554

13,118

3.3

Total used

39,575

38,492

2.8

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$              34,128

$              32,774

4.1

Used vehicle retail

$              21,475

$              20,320

5.7

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$                1,801

$                1,741

3.4

Used vehicle retail sales

1,550

1,600

(3.1)

Used vehicle wholesale sales

(71)

(81)

(12.3)

Total used

995

1,027

(3.1)

Finance and insurance (per retail unit)

$                1,336

$                1,222

9.3

OTHER:(2)

SG&A expenses

$            250,837

$            238,941

5.0

SG&A as % revenues

10.4

10.5

SG&A as % gross profit

73.0

74.0

Operating margin %

3.5

3.3

Nine Months Ended September 30,

2014

2013

% Change

REVENUES:

New vehicle retail sales

$         3,889,352

$         3,757,316

3.5

Used vehicle retail sales

1,593,144

1,493,801

6.7

Used vehicle wholesale sales

262,736

235,780

11.4

Total used

1,855,880

1,729,581

7.3

Parts and service

775,246

728,507

6.4

Finance and insurance

253,239

227,024

11.5

Total

$         6,773,717

$         6,442,428

5.1

GROSS MARGIN %:

New vehicle retail sales

5.3

5.6

Used vehicle retail sales

7.6

8.2

Used vehicle wholesale sales

1.2

0.9

Total used

6.7

7.2

Parts and service

53.0

52.5

Finance and insurance

100.0

100.0

Total

14.7

14.7

GROSS PROFIT:

New vehicle retail sales

$            207,977

$            211,890

(1.8)

Used vehicle retail sales

120,827

122,066

(1.0)

Used vehicle wholesale sales

3,174

2,077

52.8

Total used

124,001

124,143

(0.1)

Parts and service

410,615

382,173

7.4

Finance and insurance

253,239

227,024

11.5

Total

$            995,832

$            945,230

5.4

UNITS SOLD:

Retail new vehicles sold

113,518

112,988

0.5

Retail used vehicles sold

74,555

72,751

2.5

Wholesale used vehicles sold

37,597

36,566

2.8

Total used

112,152

109,317

2.6

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$              34,262

$              33,254

3.0

Used vehicle retail

$              21,369

$              20,533

4.1

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$                1,832

$                1,875

(2.3)

Used vehicle retail sales

1,621

1,678

(3.4)

Used vehicle wholesale sales

84

57

47.4

Total used

1,106

1,136

(2.6)

Finance and insurance (per retail unit)

$                1,346

$                1,222

10.1

OTHER: (2)

SG&A expenses

$            731,785

$            694,811

5.3

SG&A as % revenues

10.8

10.8

SG&A as % gross profit

73.5

73.5

Operating margin %

3.5

3.5

(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.

(2)

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.

Reconciliation of Certain Non-GAAP Financial Measures - U.S.

(Unaudited)

 (Dollars in thousands, except per share amounts)

Three Months Ended September 30,

2014

2013

% Change

SG&A RECONCILIATION:

As reported

$      221,645

$      206,635

7.3

  Pre-tax adjustments:

   Catastrophic events 

(1,099)

(258)

   Gain on real estate and dealership transactions 

14,303

1,373

   Severance costs 

-

(256)

Adjusted SG&A (1)

$      234,849

$      207,494

13.2

SG&A AS % REVENUES:

Unadjusted

10.2

10.9

Adjusted (1)

10.8

11.0

SG&A AS % GROSS PROFIT:

Unadjusted

68.8

73.7

Adjusted (1)

72.9

74.0

OPERATING MARGIN %

Unadjusted

4.0

3.4

Adjusted (1),(2)

3.6

3.4

PRETAX MARGIN %:

Unadjusted

2.0

2.5

Adjusted (1), (3)

2.6

2.5

SAME STORE SG&A RECONCILIATION:

As reported

$      210,182

$      199,332

5.4

  Pre-tax adjustments:

   Catastrophic events 

(1,099)

(258)

   Loss on real estate and dealership transactions 

(23)

-

   Severance costs 

-

(71)

Adjusted Same Store SG&A (1)

$      209,060

$      199,003

5.1

SAME STORE SG&A AS % REVENUES:

Unadjusted

10.8

10.9

Adjusted (1)

10.7

10.9

SAME STORE SG&A AS % GROSS PROFIT:

Unadjusted

72.2

72.9

Adjusted (1)

71.8

72.8

SAME STORE OPERATING MARGIN %

Unadjusted

3.7

3.6

Adjusted (1), (4)

3.8

3.6

 Nine Months Ended September 30, 

2014

2013

 % Change 

SG&A RECONCILIATION:

As reported

$      665,547

$      626,939

6.2

  Pre-tax adjustments:

   Catastrophic events 

(2,775)

(12,158)

   Gain on real estate and dealership transactions 

14,812

10,196

   Severance costs 

-

(256)

   Acquisition costs 

-

(5,159)

   Legal items 

(442)

-

Adjusted SG&A (1)

$      677,142

$      619,562

9.3

SG&A AS % REVENUES:

Unadjusted

11.0

11.4

Adjusted (1)

11.2

11.3

SG&A AS % OF GROSS PROFIT:

Unadjusted

71.7

74.3

Adjusted (1)

72.9

73.4

OPERATING MARGIN %:

Unadjusted

3.8

3.5

Adjusted (1),(2)

3.7

3.7

PRETAX MARGIN %:

Unadjusted

2.0

2.5

Adjusted (1), (3)

2.7

2.7

SAME STORE SG&A RECONCILIATION:

As reported

$      624,065

$      609,534

2.4

  Pre-tax adjustments:

   Catastrophic events 

(2,775)

(12,158)

   Loss on real estate and dealership transactions 

(23)

(200)

   Severance costs 

-

(71)

   Acquisition costs 

-

(5,159)

   Legal items 

(442)

-

Adjusted Same Store SG&A (1)

$      620,825

$      591,946

4.9

SAME STORE SG&A AS % REVENUES:

Unadjusted

11.1

11.5

Adjusted (1)

11.1

11.2

SAME STORE SG&A AS % GROSS PROFIT:

Unadjusted

72.6

74.5

Adjusted (1)

72.2

72.4

SAME STORE OPERATING MARGIN %

Unadjusted

3.7

3.5

Adjusted (1), (4)

3.8

3.8

(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 

(2)

Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $4,252 and $5,973 for the three and nine months ended September 30, 2014, and $565 and $1,174 for the three and nine months ended September 30, 2013.

(3)

Excludes the impact of SG&A reconciling items above, as well as loss on repurchase of long-term debt of $22,790 and $46,403 for the three and nine months ended September 30, 2014, non-cash asset impairment charges of $4,252 and $5,973 for the three and nine months ended September 30, 2014, and non-cash asset impairment charges of $565 and $1,174 for the three and nine months ended September 30, 2013.

(4)

Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $293 and $2,014 for the three and nine months ended September 30, 2014, and $532 and $1,139 for the three and nine months ended September 30, 2013, respectively.

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - U.K.

(Unaudited)

 (Dollars in thousands, except per share amounts)

 Nine Months Ended September 30, 

2014

2013

 % Change 

SG&A RECONCILIATION:

As reported

$     67,063

$     54,262

23.6

  Pre-tax adjustments:

   Acquisition costs 

-

(142)

Adjusted SG&A (1)

$     67,063

$     54,120

23.9

SG&A AS % REVENUES:

Unadjusted

8.9

8.8

Adjusted (1)

8.9

8.8

SG&A AS % OF GROSS PROFIT:

Unadjusted

76.1

79.3

Adjusted (1)

76.1

79.1

OPERATING MARGIN %:

Unadjusted

2.5

2.0

Adjusted (1),(2)

2.5

2.0

PRETAX MARGIN %:

Unadjusted

2.1

1.7

Adjusted (1),(2)

2.1

1.7

SAME STORE SG&A RECONCILIATION:

As reported

$     64,254

$     54,259

18.4

  Pre-tax adjustments:

   Acquisition costs 

-

(142)

Adjusted Same Store SG&A (1)

$     64,254

$     54,117

18.7

SAME STORE SG&A AS % REVENUES:

Unadjusted

8.9

8.8

Adjusted (1)

8.9

8.8

SAME STORE SG&A AS % GROSS PROFIT:

Unadjusted

75.7

79.3

Adjusted (1)

75.7

79.1

SAME STORE OPERATING MARGIN %

Unadjusted

2.5

2.0

Adjusted (1),(2)

2.5

2.0

(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 

(2)

Excludes the impact of SG&A reconciling items above.

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - Brazil

(Unaudited)

 (Dollars in thousands, except per share amounts)

Three Months Ended September 30,

2014

2013

% Change

SG&A RECONCILIATION:

As reported

$     20,313

$     20,572

(1.3)

  Pre-tax adjustments:

   Severance costs 

(393)

(295)

Adjusted SG&A (1)

$     19,920

$     20,277

(1.8)

SG&A AS % REVENUES:

Unadjusted

10.2

9.5

Adjusted (1)

10.0

9.4

SG&A AS % GROSS PROFIT:

Unadjusted

88.6

86.9

Adjusted (1)

86.9

85.6

OPERATING MARGIN %

Unadjusted

(1.6)

1.2

Adjusted (1),(2)

1.2

1.4

PRETAX MARGIN %:

Unadjusted

(2.6)

0.2

Adjusted (1),(3)

0.2

0.3

SAME STORE SG&A RECONCILIATION:

As reported

$     19,892

$     20,571

(3.3)

  Pre-tax adjustments:

   Severance costs 

(393)

(295)

Adjusted SAME STORE SG&A (1)

$     19,499

$     20,276

(3.8)

SAME STORE SG&A AS % REVENUES:

Unadjusted

10.1

9.5

Adjusted (1)

9.9

9.4

SAME STORE SG&A AS % GROSS PROFIT:

Unadjusted

87.5

86.9

Adjusted (1)

85.8

85.6

SAME STORE OPERATING MARGIN %

Unadjusted

(1.4)

1.2

Adjusted (1),(2)

1.4

1.4

 Nine Months Ended September 30, 

2014

2013 (4)

 % Change 

SG&A RECONCILIATION:

As reported

$     61,151

$     50,254

21.7

  Pre-tax adjustments:

   Severance costs 

(393)

(295)

   Acquisition costs 

-

(1,211)

   Foreign transaction tax 

(416)

-

Adjusted SG&A (1)

$     60,342

$     48,748

23.8

SG&A AS % REVENUES:

Unadjusted

10.6

9.4

Adjusted (1)

10.5

9.1

SG&A AS % OF GROSS PROFIT:

Unadjusted

93.4

85.0

Adjusted (1)

92.2

82.5

OPERATING MARGIN %:

Unadjusted

(0.4)

1.5

Adjusted (1),(2)

0.6

1.7

PRETAX MARGIN %:

Unadjusted

(1.4)

0.4

Adjusted (1),(3)

(0.4)

0.9

SAME STORE SG&A RECONCILIATION:

As reported

$     47,515

$     50,254

(5.5)

  Pre-tax adjustments:

   Severance costs 

(393)

(295)

   Acquisition costs 

-

(1,211)

   Foreign transaction tax 

(416)

-

Adjusted SAME STORE SG&A (1)

$     46,706

$     48,748

(4.2)

SAME STORE SG&A AS % REVENUES:

Unadjusted

10.6

9.4

Adjusted (1)

10.4

9.1

SAME STORE SG&A AS % GROSS PROFIT:

Unadjusted

92.9

85.0

Adjusted (1)

91.3

82.5

SAME STORE OPERATING MARGIN %

Unadjusted

(0.6)

1.5

Adjusted (1),(2)

0.7

1.7

(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 

(2)

Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $5,121 for the three and nine months ended September 30, 2014.

(3)

Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges of $5,121 for the three and nine months ended September 30, 2014, and other expense, net of $789, for the period from the date of acquisition (February 28, 2013) through September 30, 2013.

(4)

 Results are for the period from the date of acquisition (February 28, 2013) through September 30, 2013. 

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - CONSOLIDATED

(Unaudited)

 (Dollars in thousands, except per share amounts)

Three Months Ended September 30,

2014

2013

% Change

NET INCOME RECONCILIATION:

As reported

$        26,162

$        32,765

(20.2)

  After-tax adjustments:

  Catastrophic events(5)

671

158

  Gain on real estate and dealership transactions(6)

(8,572)

(230)

  Severance costs (7)

388

454

  Acquisition costs including related tax impact(8)

-

(630)

  Non-cash asset impairment(11)

6,559

349

  Loss on repurchase of long-term debt(12)

17,934

-

  Tax impact of foreign deductible goodwill

(3,358)

-

Adjusted net income (1)

$        39,784

$        32,866

21.0

ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED

COMMON SHARES RECONCILIATION:

Adjusted net income

$        39,784

$        32,866

21.0

Less: Adjusted earnings allocated to participating securities

1,520

1,324

14.8

Adjusted net income available to diluted common shares

$        38,264

$        31,542

21.3

 DILUTED INCOME PER COMMON SHARE RECONCILIATION: 

As reported

$            1.03

1.19

(13.4)

  After-tax adjustments:

   Catastrophic events 

0.03

0.01

   Gain on real estate and dealership transactions 

(0.34)

(0.01)

   Severance costs 

0.01

0.02

   Acquisition costs including related tax impact 

-

(0.02)

   Non-cash asset impairment 

0.26

0.01

   Loss on repurchase of long-term debt 

0.71

-

   Tax impact of foreign deductible goodwill 

(0.13)

-

Adjusted diluted income per share (1)

$            1.57

$            1.20

30.8

SG&A RECONCILIATION:

As reported

$      264,233

$      246,863

7.0

  Pre-tax adjustments:

   Catastrophic events 

(1,099)

(258)

   Gain on real estate and dealership transactions 

14,303

1,373

   Severance costs 

(393)

(551)

Adjusted SG&A (1)

$      277,044

$      247,427

12.0

SG&A AS % REVENUES:

Unadjusted

10.1

10.5

Adjusted (1)

10.5

10.6

SG&A AS % GROSS PROFIT:

Unadjusted

70.5

74.9

Adjusted (1)

73.9

75.1

OPERATING MARGIN %

Unadjusted

3.4

3.1

Adjusted (1), (2)

3.3

3.1

PRETAX MARGIN %:

Unadjusted

1.7

2.2

Adjusted (1), (3)

2.4

2.2

SAME STORE SG&A RECONCILIATION:

As reported

$      252,352

$      239,565

5.3

  Pre-tax adjustments:

   Catastrophic events 

(1,099)

(258)

   Loss on real estate and dealership transactions 

(23)

-

   Severance costs 

(393)

(366)

Adjusted Same Store SG&A (1)

$      250,837

$      238,941

5.0

SAME STORE SG&A AS % REVENUES:

Unadjusted

10.5

10.5

Adjusted (1)

10.4

10.5

SAME STORE SG&A AS % GROSS PROFIT:

Unadjusted

73.4

74.2

Adjusted (1)

73.0

74.0

SAME STORE OPERATING MARGIN %

Unadjusted

3.2

3.2

Adjusted (1), (4)

3.5

3.3

 Nine Months Ended September 30, 

2014

2013

 % Change 

NET INCOME RECONCILIATION:

As reported

$        74,327

$        92,271

(19.4)

  After-tax adjustments:

  Catastrophic events(5)

1,710

7,419

  Gain on real estate and dealership transactions(6)

(8,887)

(5,376)

  Severance costs (7)

388

454

  Acquisition costs including related tax impact(8)

-

6,337

  Legal items (9)

274

-

  Foreign transaction tax(10)

274

-

  Non-cash asset impairment(11)

7,626

718

  Loss on repurchase of long-term debt(12)

38,711

-

  Tax impact of foreign deductible goodwill

(3,358)

-

Adjusted net income (1)

$      111,065

$      101,823

9.1

ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED

COMMON SHARES RECONCILIATION:

Adjusted net income

$      111,065

$      101,823

9.1

Less: Adjusted earnings allocated to participating securities

4,126

4,241

(2.7)

Adjusted net income available to diluted common shares

$      106,939

$        97,582

9.6

 DILUTED INCOME PER COMMON SHARE RECONCILIATION: 

As reported

$            2.82

$            3.52

(19.9)

  After-tax adjustments:

   Catastrophic events 

0.07

0.28

   Gain on real estate and dealership transactions 

(0.33)

(0.21)

   Severance costs 

0.01

0.02

   Acquisition costs including related tax impact 

-

0.24

   Legal items 

0.01

-

   Foreign transaction tax 

0.01

-

   Non-cash asset impairment 

0.29

0.03

   Loss on repurchase of long-term debt 

1.47

-

   Tax impact of foreign deductible goodwill 

(0.13)

-

Adjusted diluted income per share (1)

$            4.22

$            3.88

8.8

SG&A RECONCILIATION:

As reported

$      793,761

$      731,455

8.5

  Pre-tax adjustments:

   Catastrophic events 

(2,775)

(12,158)

   Gain on real estate and dealership transactions 

14,812

10,196

   Severance costs 

(393)

(551)

   Acquisition costs 

-

(6,512)

   Legal items 

(442)

-

   Foreign transaction tax 

(416)

-

Adjusted SG&A (1)

$      804,547

$      722,430

11.4

SG&A AS % REVENUES:

Unadjusted

10.7

11.0

Adjusted (1)

10.9

10.9

SG&A AS % OF GROSS PROFIT:

Unadjusted

73.4

75.3

Adjusted (1)

74.4

74.4

OPERATING MARGIN %:

Unadjusted

3.3

3.2

Adjusted (1), (2)

3.3

3.3

PRETAX MARGIN %:

Unadjusted

1.8

2.3

Adjusted (1), (3)

2.4

2.5

SAME STORE SG&A RECONCILIATION:

As reported

$      735,834

$      714,047

3.1

  Pre-tax adjustments:

 Catastrophic events 

(2,775)

(12,158)

 Loss on real estate and dealership transactions 

(23)

(200)

 Severance costs 

(393)

(366)

 Acquisition costs 

-

(6,512)

 Legal items 

(442)

-

 Foreign transaction tax 

(416)

-

Adjusted Same Store SG&A (1)

$      731,785

$      694,811

5.3

SAME STORE SG&A AS % REVENUES:

Unadjusted

10.9

11.1

Adjusted (1)

10.8

10.8

SAME STORE SG&A AS % GROSS PROFIT:

Unadjusted

73.9

75.5

Adjusted (1)

73.5

73.5

SAME STORE OPERATING MARGIN %

Unadjusted

3.3

3.2

Adjusted (1), (4)

3.5

3.5

(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 

(2)

Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges for all periods.

(3)

Excludes the impact of SG&A reconciling items above, non-cash asset impairment charges for all periods, as well as loss on repurchase of long-term debt of $22,790 and $46,403 for the three and nine months ended September 30, 2014, respectively, and other expense, net of $789, for the nine months ended September 30, 2013.

(4)

Excludes the impact of Same Store SG&A reconciling items above, as well as non-cash asset impairment charges of $5,414 and $7,135 for the three and nine months ended September 30, 2014, respectively, and $532 and $1,139 for the three and nine months ended September 30, 2013, respectively.

(5)

Adjustment is net of tax benefit of $428 and $1,065 for the three and nine months ended September 30, 2014, respectively, and $100 and $4,739 for the three and nine months ended September 30, 2013, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.

(6)

Adjustment is net of tax provision of $5,731 and $5,925 for the three and nine months ended September 30, 2014, respectively, and $1,143 and $4,820 for the three and nine months ended September 30, 2013, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.

(7)

Adjustment is net of tax benefit of $5 for the three and nine months ended September 30, 2014, and $97 for the three and nine months ended September 30, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.

(8)

Adjustment is net of tax benefit of $630 and $963 for the three and nine months ended September 30, 2013, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.

(9)

Adjustment is net of tax benefit of $168 for the nine months ended September 30, 2014, calculated utilizing the applicable federal and state tax rates for the adjustment.

(10)

Adjustment is net of tax benefit of $141 for the nine months ended September 30, 2014, calculated utilizing the applicable federal and state tax rates for the adjustment. 

(11)

Adjustment is net of tax benefit of $2,815 and $3,469 for the three and nine months ended September 30, 2014, respectively, and $216 and $456 for the three and nine months ended September 30, 2013, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.

(12)

Adjustment is net of tax benefit of $4,856 and $7,692 for the three and nine months ended September 30, 2014, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.

 

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SOURCE Group 1 Automotive, Inc.


The Partnership for Drug-Free Kids Announces Honorees of Winter Wish Gala Oct 23, 2014 07:07AM

NEW YORK, Oct. 23, 2014 /PRNewswire-USNewswire/ -- The Partnership for Drug-Free Kids, a nonprofit dedicated to reducing teen substance abuse and supporting families impacted by addiction, announced new honorees for its 2014 Winter Wish Gala on Thursday, November 20. These include Wenda Harris Millard, President and COO of MediaLink; and Larry J. Merlo, President and CEO of CVS Health. Helshi Lockwood Tunnell Hewson, Media Consultant at the Partnership for Drug-Free Kids, will receive the inaugural James E. Burke Award. They will join Senator Gordon Smith, previously announced as a gala honoree.

Wenda Harris Millard joined MediaLink, a leading strategic advisory firm, as President and COO in April 2009. Prior to joining MediaLink, Millard was Co-CEO and President, Media for Martha Stewart Living Omnimedia, Inc. A veteran of the media industry, Millard is the former Chief Sales Officer at Yahoo!, where she was responsible for leading the team that drove revenue from $700 million to over $6 billion in six years. Prior to working at Yahoo!, Millard was Chief Internet Officer at Ziff Davis Media and President of Ziff Davis Internet. She was also a founding member of the executive team at DoubleClick.

Millard has received numerous industry awards including being named in 2012 one of the "100 Most Influential Women in Advertising in the Last 100 Years" In 2012.

Larry J. Merlo has been the President of CVS Health since May 2010 and he has served as the CEO since March 2011. Under Merlo's leadership, the innovative pharmacy company is transforming health care by delivering breakthrough products and services that enable communities to manage health in more affordable, effective ways. In 2014, the company announced the landmark decision to be the first major retail pharmacy to eliminate tobacco sales in all of its stores, changing its corporate name to CVS Health.

Merlo has received numerous professional honors, including his past role as chairman of the board for the National Association of Chain Drug Stores, where he currently serves on the board's Executive Committee. He also serves on the University of Pittsburgh's Board of Trustees and is a member of the Business Roundtable.

"We would not be able to deliver on our promise of being the organization where families find answers without the incredible support of our partners and extraordinary individuals," explained Steve Pasierb, President and CEO of the Partnership for Drug-Free Kids. "We honor our friend Wenda Harris Millard of MediaLink for her many years of steadfast dedication to our work in helping families protect the health of their children; and Larry Merlo and his wonderful team at CVS Health for their commitment in joining us to educate families nationwide about the risks of abusing medicines while together making progress toward our goal to prevent half million teens from abusing medicine by 2017."

Helshi Lockwood is the recipient of the James E. Burke Award for her dedication and commitment to improving the lives of young people. She joined the Partnership for Drug-Free Kids in June 2006 as a Media Consultant. She acquired pro-bono space for the nonprofit in The New York Times, The Wall Street Journal and in a number of magazines that reach parents and families. Lockwood has generated over $80 million in total print advertising donations for the organization.

Previously, she was the President of Emmis Publishing National Sales, which represented Texas Monthly, Atlanta Magazine, Cincinnati Magazine, Indianapolis Monthly; and Los Angeles Magazine under her leadership. She started her magazine career at Vogue in London in 1963. Lockwood was one of the first women to sell magazine advertising and now celebrates her 51st year doing so.

She was honored by Advertising Women of NY and Working Mother Magazine in 2006 with the "Working Mother of the Year" award in the Trailblazer category.

Pasierb shared, "Another great part of the evening will be the opportunity to recognize Helshi Lockwood with the James E. Burke Award for her volunteerism, dedication and deep humanitarian spirit. Thanks to her peerless passion and tenacity, Partnership messages continue to grace the pages of some of the country's most-read publications which effectively connect the parents and families we serve to the resources they need."

The gala is the Partnership's largest source of support for its mission each year, raising nearly $2 million dollars in 2013. Past honorees have included Bill Koenigsberg, President and CEO of Horizon Media; Mark Lazarus, Chairman of NBC Sports Group; Clear Channel and more. For more information on the 2014 Winter Wish Gala, visit drugfree.org.

About the Partnership for Drug-Free Kids The Partnership for Drug-Free Kids is dedicated to reducing teen substance abuse and supporting families impacted by addiction. We develop public education campaigns that drive awareness of teen substance abuse, and lead teen-targeted efforts that inspire young people to make positive decisions to stay healthy and avoid drugs and alcohol. On our website, drugfree.org, and through our toll-free helpline (1-855-DRUGFREE), we provide families with direct support and guidance to help them address teen substance abuse. Finally, we build healthy communities, advocating for great access to adolescent treatment and funding for youth prevention programs. As a national nonprofit, we depend on donations from individuals, corporations, foundations and the public sector and are thankful to SAG-AFTRA and the advertising and media industries for their ongoing generosity.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/the-partnership-for-drug-free-kids-announces-honorees-of-winter-wish-gala-442316835.html

SOURCE The Partnership for Drug-Free Kids


Trekmates selects Visual 2000 End-2-End Suite of Fashion Business Solutions Oct 23, 2014 07:05AM

MONTREAL, QC, Oct. 23, 2014 (GLOBE NEWSWIRE) -- Visual 2000 International announces that Outdoor Adventure Specialist Trekmates are implementing Visual End-2-End™ suite of software products. The Nottingham based firm is one of the UK's leading suppliers of outdoor accessories. Trekmate's Finance Director Martin Webster commented "we pride ourselves on working with our customers to produce the perfect collection, whilst taking into account margin and delivery deadlines. With Visual 2000 we have found the most efficient and modern solution to support us and to aid our continual growth plans. We will now be able to connect all departments for total visibility within a 'one stop application', including all overseas manufacturing facilities which is exactly what we wanted. It's exciting to combine our business growth with new ERP technology." Visual 2000 UK Managing Director Tony Mather confirmed "We are delighted to be working with Martin and his implementation team on this project. Trekmates are an established, respected business in a fast moving/competitive sector and will benefit from Visual's Rapid Deployment Process (RDP). This will enable quick gains from Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP), Sales Force Automation (SFA) and other key fashion capabilities from an all-in-one business enterprise solution. Visual's new V8 software release centralises all product information and processes into a single system which empowers management and teams to increase operational efficiencies and streamline design, product development, production, and distribution processes. In addition to comprehensive PLM and ERP capabilities, Trekmates will benefit from Visual End-2-End financial management, business planning, supply chain management, multi-channel sales and order fulfilment, and other concept-to-consumer fashion software components". About Trekmates :

Trekmates® was formed in Nottingham, England in 1997 and is now one of the leading providers of outdoor adventure accessories in the world. They design, source and market a range of outdoor accessories and clothing designed around three core attributes; continual improvement, quality and price. Their Flameless Cook System is a very popular outdoor non flame 'meal preparation and cooking products'.   About Visual 2000 International

Visual 2000 International Inc. develops and markets comprehensive software solutions for the apparel and other fashion-related industries. The company's flagship Visual End-2-End™ Solution combines Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Warehouse Management System (WMS), business intelligence (BI), sales force automation (SFA), customer relationship management (CRM), and E-Commerce (ECOM) capabilities in a single, integrated solution that enables retailers, brands, and manufacturers to gain visibility and control across the entire concept-to-consumer fashion lifecycle.

Visual 2000 products leverage leading-edge Microsoft® technologies such as SQL Server®, .NET® framework, and the Silverlight® development platform. Headquartered in Montreal, Visual 2000 maintains offices and distribution channels in Canada, United States, Europe, and China. For more information, visit http://www.visual-2000.com.

This year, Visual 2000 celebrated fifteen years in business, providing agility, continuity and world-class services and solutions to its customers around the world.

We set out to build great software, and that goal remains consistent as we look to the future.

Microsoft, SQL Server, .NET, and Silverlight are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

Visual End-2-End, Visual PLM.net, Visual ERP.net, Visual SCM.net, Visual WMS.net, Visual BI.net, Visual EDI.net, Visual SFA.net, and Visual CRM.net and are registered trademarks or trademarks of Visual 2000 International Inc.

CONTACT: marketing@visual-2000.com
         +1.888.386.4006

Source: Visual 2000 International


Trekmates selects Visual 2000 End-2-End Suite of Fashion Business Solutions Oct 23, 2014 07:05AM

MONTREAL, QC, Oct. 23, 2014 (GLOBE NEWSWIRE) -- Visual 2000 International announces that Outdoor Adventure Specialist Trekmates are implementing Visual End-2-End™ suite of software products. The Nottingham based firm is one of the UK's leading suppliers of outdoor accessories. Trekmate's Finance Director Martin Webster commented "we pride ourselves on working with our customers to produce the perfect collection, whilst taking into account margin and delivery deadlines. With Visual 2000 we have found the most efficient and modern solution to support us and to aid our continual growth plans. We will now be able to connect all departments for total visibility within a 'one stop application', including all overseas manufacturing facilities which is exactly what we wanted. It's exciting to combine our business growth with new ERP technology." Visual 2000 UK Managing Director Tony Mather confirmed "We are delighted to be working with Martin and his implementation team on this project. Trekmates are an established, respected business in a fast moving/competitive sector and will benefit from Visual's Rapid Deployment Process (RDP). This will enable quick gains from Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP), Sales Force Automation (SFA) and other key fashion capabilities from an all-in-one business enterprise solution. Visual's new V8 software release centralises all product information and processes into a single system which empowers management and teams to increase operational efficiencies and streamline design, product development, production, and distribution processes. In addition to comprehensive PLM and ERP capabilities, Trekmates will benefit from Visual End-2-End financial management, business planning, supply chain management, multi-channel sales and order fulfilment, and other concept-to-consumer fashion software components". About Trekmates :

Trekmates® was formed in Nottingham, England in 1997 and is now one of the leading providers of outdoor adventure accessories in the world. They design, source and market a range of outdoor accessories and clothing designed around three core attributes; continual improvement, quality and price. Their Flameless Cook System is a very popular outdoor non flame 'meal preparation and cooking products'.   About Visual 2000 International

Visual 2000 International Inc. develops and markets comprehensive software solutions for the apparel and other fashion-related industries. The company's flagship Visual End-2-End™ Solution combines Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Warehouse Management System (WMS), business intelligence (BI), sales force automation (SFA), customer relationship management (CRM), and E-Commerce (ECOM) capabilities in a single, integrated solution that enables retailers, brands, and manufacturers to gain visibility and control across the entire concept-to-consumer fashion lifecycle.

Visual 2000 products leverage leading-edge Microsoft® technologies such as SQL Server®, .NET® framework, and the Silverlight® development platform. Headquartered in Montreal, Visual 2000 maintains offices and distribution channels in Canada, United States, Europe, and China. For more information, visit http://www.visual-2000.com.

This year, Visual 2000 celebrated fifteen years in business, providing agility, continuity and world-class services and solutions to its customers around the world.

We set out to build great software, and that goal remains consistent as we look to the future.

Microsoft, SQL Server, .NET, and Silverlight are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

Visual End-2-End, Visual PLM.net, Visual ERP.net, Visual SCM.net, Visual WMS.net, Visual BI.net, Visual EDI.net, Visual SFA.net, and Visual CRM.net and are registered trademarks or trademarks of Visual 2000 International Inc.

CONTACT: marketing@visual-2000.com
         +1.888.386.4006

Source: Visual 2000 International


Carpenter Technology Reports First Quarter Results Oct 23, 2014 07:06AM

Net income of $13.5 million or $0.25 per share

Net sales of $549.8 million

Adjusted EBITDA of $63.9 million

Board authorized share repurchase program of up to $500 million

WYOMISSING, Pa.--(BUSINESS WIRE)-- Carpenter Technology Corporation (NYSE: CRS) today announced financial results for the quarter ended September 30, 2014. Carpenter reported net income of $13.5 million or $0.25 per diluted share, compared to $34.6 million or $0.65 per diluted share in the same quarter last year.

Financial Highlights

($ in millions)     Q1       Q1       Q4
FY2015 FY2014 FY2014
Net Sales $ 549 .8 $ 498 .6 $ 604 .6
Net Sales Excluding Surcharge (a) $ 440 .1 $ 412 .1 $ 488 .9
Operating Income $ 22 .1 $ 55 .8 $ 59 .2
Net Income $ 13 .5 $ 34 .6 $ 38 .1
Free Cash Flow (a) $ (53 .5) $ (60 .5) $ 34 .9
Adjusted EBITDA (a) $ 63 .9 $ 97 .5 $ 105 .2
 
(a) non-GAAP financial measure explained in the attached tables
 

William A. Wulfsohn, Carpenter’s President and Chief Executive officer, stated: “After a difficult start to the quarter, performance in September improved. The Latrobe press is now back on line and we saw our Specialty Alloys Operations (SAO) segment mix improve in September. That said, we need to drive further improvements and successfully work through recent challenges at our Reading mill.

“Looking forward, we expect SAO to continue year-over-year volume growth as we expand the number of customer approvals for Athens production. We also anticipate that SAO’s sales mix will improve based on recent trends in our backlog. In addition, the Performance Engineered Products (PEP) segment is expected to improve year-over-year. Finally, we remain focused on keeping our selling, general and administrative expenses flat. These are the crucial building blocks in terms of driving profitable growth as we progress through our fiscal year.

“We have now completed the majority of our spending related to capacity expansion, and we are committed to driving returns on these investments. We have a strong focus on cash generation, and we are also committed to reduce inventory from current levels by the end of the fiscal year. While we have multiple strategic options to deploy this cash, as well as a strong balance sheet, our recently authorized share repurchase program gives us an important option to return future cash flow to our shareholders.”

Net Sales, Operating Income, and Net Income

Net sales for the first quarter of fiscal year 2015 were $549.8 million, and net sales excluding surcharge were $440.1 million, an increase of $28.0 million (or 7 percent) from the same quarter last year, on 11 percent higher shipments.

Operating income was $22.1 million, a decrease of $33.7 million from the first quarter of the prior year. Operating income—excluding pension earnings, interest and deferrals (EID)—was $24.5 million, a decrease of $37.3 million (or 60 percent) from the first quarter of the prior year. The reduction in operating income versus the prior year is primarily due to the operational issues experienced in the first two months of the current quarter, weaker mix and additional Athens depreciation expense.

Net income was $13.5 million or $0.25 per diluted share, as compared to $34.6 million or $0.65 per diluted share in the same quarter last year. The results for the first quarter of fiscal year 2015 include a favorable legal settlement of $4.4 million or $0.05 per share, reported in other income, net.

Cash Flow

Cash flow from operations was $15.0 million, which included a $42.6 million increase in working capital and $2.8 million of pension contributions. This compares to a cash flow from operations of $39.5 million in the prior year’s first quarter, which included a $37.7 million increase in working capital and $1.5 million of pension contributions. Free cash flow in the first quarter was negative $53.5 million, compared to negative $60.5 million in the same quarter last year. Capital spending in the first quarter, which included $32.3 million related to the construction of the Athens facility, was $59.0 million, compared to $90.4 million in the prior year’s first quarter, which included $67.4 million related to Athens.

Total liquidity, including cash and available revolver balance, was $558 million at the end of the first quarter. This consisted of $66 million of cash, and $492 million of available revolver.

End Markets

                         
        Q1 FY15

Sales*

Ex. Surcharge

(in Millions)

      Q1 FY15

vs.

Q1 FY14

      Q1 FY15

vs.

Q4 FY14

Aerospace and Defense       $180.7       -1%       -15%
Energy       $67.8       +15%       -8%
Medical       $26.7       +7%       -5%
Transportation       $30.7       +20%       -8%
Industrial and Consumer       $98.6       +15%       -8%
                 

* Excludes sales through Carpenter’s distribution businesses

Aerospace and Defense

  • Lower demand for certain high-value engine and defense related materials led to lower sales and a weaker overall mix year-over-year.
  • Demand is seen returning in the aerospace distribution market but at lower average selling prices versus the prior year.
  • Revenue for aerospace engine materials was up 5 percent, and revenue for fastener materials (titanium and nickel) was up 9 percent, year-over-year.

Energy

  • The directional rig count grew 13 percent versus the same quarter last year.
  • Amega West posted solid revenue growth in both manufacturing and rental compared to the prior year.
  • The power generation market segment showed strong growth in the quarter versus the prior year and sequentially.

Medical

  • Revenue improved year-over-year but had a weaker mix, while titanium revenue was down and stainless instrument revenue was up.
  • Original equipment manufacturers (OEMs) have resumed more normalized buying patterns as inventories have stabilized.
  • The medical market environment remains extremely competitive with significant pricing pressure.

Transportation

  • North American vehicle production is up year-over-year and remains at high levels.
  • Sales mix has improved versus the prior year, with the shift to higher value components for more demanding applications going into high-pressure/high-temperature engine systems.

Industrial and Consumer

  • Demand growth in the consumer market segment is being driven by high-value consumer electronics and sporting goods applications.
  • Strong year-over-year revenue growth in the semiconductor market segment.
  • Steady demand growth for premium tool steels.

Conference Call and Webcast Presentation

Carpenter will host a conference call and webcast presentation today, October 23, at 9 a.m. ET, to discuss the financial results and operations for the fiscal first quarter of 2015. Please call 610-208-2097 for details. Access to both the call and webcast presentation will also be available at Carpenter’s website (http://www.cartech.com) and through CCBN (http://www.ccbn.com), and a replay of the call will soon be made available at http://www.cartech.com or at http://www.ccbn.com. Presentation materials used during this conference call will be available for viewing and download at 7:00 a.m. ET today, at http://www.cartech.com.

Non-GAAP Financial Measures

This press release includes discussions of financial measures that have not been determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP). A reconciliation of the non-GAAP financial measures to their most directly comparable financial measures prepared in accordance with GAAP, accompanied by reasons why the Company believes the non-GAAP measures are important, are included in the attached schedules.

About Carpenter Technology

Carpenter produces and distributes premium alloys, including special alloys, titanium alloys and powder metals, as well as stainless steels, alloy steels and tool steels. Information about Carpenter can be found at http://www.cartech.com.

Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected, anticipated or implied. The most significant of these uncertainties are described in Carpenter’s filings with the Securities and Exchange Commission including its annual report on Form 10-K for the year ended June 30, 2014 and the exhibits attached to that filing. They include but are not limited to: (1) the cyclical nature of the specialty materials business and certain end-use markets, including aerospace, defense, industrial, transportation, consumer, medical, and energy, or other influences on Carpenter’s business such as new competitors, the consolidation of competitors, customers, and suppliers or the transfer of manufacturing capacity from the United States to foreign countries; (2) the ability of Carpenter to achieve cash generation, growth, profitability, cost savings, productivity improvements or process changes; (3) the ability to recoup increases in the cost of energy, raw materials, freight or other factors; (4) domestic and foreign excess manufacturing capacity for certain metals; (5) fluctuations in currency exchange rates; (6) the degree of success of government trade actions; (7) the valuation of the assets and liabilities in Carpenter’s pension trusts and the accounting for pension plans; (8) possible labor disputes or work stoppages; (9) the potential that our customers may substitute alternate materials or adopt different manufacturing practices that replace or limit the suitability of our products; (10) the ability to successfully acquire and integrate acquisitions; (11) the availability of credit facilities to Carpenter, its customers or other members of the supply chain; (12) the ability to obtain energy or raw materials, especially from suppliers located in countries that may be subject to unstable political or economic conditions; (13) Carpenter’s manufacturing processes are dependent upon highly specialized equipment located primarily in facilities in Reading, Latrobe and Athens for which there may be limited alternatives if there are significant equipment failures or a catastrophic event; (14) the ability to hire and retain key personnel, including members of the executive management team, management, metallurgists and other skilled personnel; and (15) share repurchases are at Carpenter’s discretion and could be affected by changes in Carpenter’s share price, operating results, capital spending, cash flows, inventory, acquisitions, investments, tax laws, and general market conditions. Any of these factors could have an adverse and/or fluctuating effect on Carpenter’s results of operations. The forward-looking statements in this document are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Carpenter undertakes no obligation to update or revise any forward-looking statements.

 
PRELIMINARY
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share data)
(Unaudited)
             
Three Months Ended
September 30,
 
2014 2013
 
NET SALES $ 549 .8 $ 498 .6
Cost of sales   480 .7   395 .3
Gross profit 69 .1 103 .3
 
Selling, general and administrative expenses   47 .0   47 .5
Operating income 22 .1 55 .8
 
Interest expense (7 .0) (4 .4)
Other income, net   4 .9   0 .1
 
Income before income taxes 20 .0 51 .5
Income tax expense   6 .5   16 .9
 
NET INCOME $ 13 .5 $ 34 .6
 
EARNINGS PER SHARE:
Basic $ 0 .25 $ 0 .65
Diluted $ 0 .25 $ 0 .65
 
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic   53 .5   53 .1
Diluted   53 .7   53 .4
 
Cash dividends per common share $ 0 .18 $ 0 .18
 
 
PRELIMINARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
               
Three Months Ended
September 30,
 
2014 2013
 
OPERATING ACTIVITIES:
Net income $ 13 .5 $ 34 .6
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation and amortization 30 .3 26 .7
Deferred income taxes 2 .6 (0 .7)
Net pension expense 11 .5 15 .0
Stock-based compensation expense 2 .5 3 .1
Changes in working capital and other:
Accounts receivable 16 .2 57 .7
Inventories (30 .8) (47 .4)
Other current assets (6 .3) (9 .0)
Accounts payable 1 .3 (14 .9)
Accrued liabilities (17 .2) (18 .5)
Pension plan contributions (2 .8) (1 .5)
Other postretirement plan contributions (3 .6) (3 .2)
Other, net   (2 .2)   (2 .4)
Net cash provided from operating activities   15 .0   39 .5
 
INVESTING ACTIVITIES:
Purchases of property, equipment and software (59 .0) (90 .4)
Proceeds from disposals of property and equipment   0 .1   -  
Net cash used for investing activities   (58 .9)   (90 .4)
 
FINANCING ACTIVITIES:
Dividends paid (9 .6) (9 .6)
Tax benefits on share-based compensation 0 .1 1 .0
Proceeds from stock options exercised   0 .7   2 .5
Net cash used for financing activities   (8 .8)   (6 .1)
 
Effect of exchange rate changes on cash and cash equivalents   (1 .3)   0 .5
 
 
DECREASE IN CASH AND CASH EQUIVALENTS (54 .0) (56 .5)
Cash and cash equivalents at beginning of period   120 .0   257 .5
 
Cash and cash equivalents at end of period $ 66 .0 $ 201 .0
 
 
PRELIMINARY
CONSOLIDATED BALANCE SHEETS
(in millions)
(Unaudited)
                 
September 30, June 30,
2014 2014
 
ASSETS
Current assets:
Cash and cash equivalents $ 66 .0 $ 120 .0
Accounts receivable, net 319 .1 339 .6
Inventories 728 .1 699 .2
Deferred income taxes 5 .2 -
Other current assets   34 .1   35 .7
Total current assets 1,152 .5 1,194 .5
 
Property, plant and equipment, net 1,408 .1 1,407 .0
Goodwill 257 .6 257 .7
Other intangibles, net 77 .8 80 .6
Other assets   116 .2   117 .7
Total assets $ 3,012 .2 $ 3,057 .5
 
LIABILITIES
Current liabilities:
Accounts payable $ 251 .5 $ 278 .1
Accrued liabilities 138 .1 148 .0
Deferred income taxes   -     4 .5
Total current liabilities 389 .6 430 .6
 
Long-term debt, net of current portion 604 .2 604 .3
Accrued pension liabilities 205 .9 203 .4
Accrued postretirement benefits 162 .0 163 .2
Deferred income taxes 113 .9 110 .7
Other liabilities   51 .1   41 .0
Total liabilities   1,526 .7   1,553 .2
 
STOCKHOLDERS' EQUITY
Common stock 275 .9 275 .8
Capital in excess of par value 260 .6 263 .5
Reinvested earnings 1,315 .4 1,311 .6
Common stock in treasury, at cost (98 .1) (101 .4)
Accumulated other comprehensive loss   (268 .3)   (245 .2)
Total stockholders' equity   1,485 .5   1,504 .3
Total liabilities and stockholders' equity $ 3,012 .2 $ 3,057 .5
 
 
PRELIMINARY
SEGMENT FINANCIAL DATA
(in millions, except pounds sold)
(Unaudited)
             
Three Months Ended
September 30,
2014 2013
Pounds sold* (000):
Specialty Alloys Operations 70,120 63,414
Performance Engineered Products 3,034 2,666
Intersegment   (1,408 )   (1,188 )
 
Consolidated pounds sold   71,746     64,892  
 
Net sales:
Specialty Alloys Operations
Net sales excluding surcharge $ 324 .1 $ 307 .6
Surcharge   111 .9   87 .3
 
Specialty Alloys Operations net sales   436 .0   394 .9
 
Performance Engineered Products
Net sales excluding surcharge 129 .6 117 .5
Surcharge   0 .3   1 .0
 
Performance Engineered Products net sales   129 .9   118 .5
 
Intersegment
Net sales excluding surcharge (13 .6) (13 .0)
Surcharge   (2 .5)   (1 .8)
Intersegment net sales   (16 .1)   (14 .8)
 
 
Consolidated net sales $ 549 .8 $ 498 .6
 
Operating income:
Specialty Alloys Operations $ 24 .6 $ 63 .7
Performance Engineered Products 9 .7 11 .6
Corporate costs (10 .3) (12 .9)
Pension earnings, interest and deferrals (2 .4) (6 .0)
Intersegment   0 .5   (0 .6)
 
Consolidated operating income $ 22 .1 $ 55 .8
 

The Company has two reportable segments, Specialty Alloys Operations (“SAO”) and Performance Engineered Products (“PEP”).

The SAO segment is comprised of Carpenter's major premium alloy and stainless steel manufacturing operations. This includes operations performed at mills primarily in Reading and Latrobe and surrounding areas in Pennsylvania, South Carolina, and Alabama.

The PEP segment is comprised of the Company’s differentiated operations. This segment includes the Dynamet titanium business, the Carpenter Powder Products ("CPP") business, the Amega West business, the Specialty Steel Supply business and the Latrobe and Mexico distribution businesses. The businesses in the PEP segment are managed with an entrepreneurial structure to promote speed and flexibility, and drive overall revenue and profit growth. The pounds sold data above for the PEP segment includes only the Dynamet and CPP businesses.

The service cost component of net pension expense, which represents the estimated cost of future pension liabilities earned associated with active employees, is included in the operating results of the business segments. The residual net pension expense, or pension earnings, interest and deferrals (pension EID), is comprised of the expected return on plan assets, interest costs on the projected benefit obligations of the plans, and amortization of actuarial gains and losses and prior service costs, is included under the heading "Pension earnings, interest and deferrals."

* Pounds sold excludes sales associated with the distribution businesses.

 
PRELIMINARY
NON-GAAP FINANCIAL MEASURES
(in millions)
(Unaudited)
         
OPERATING MARGIN EXCLUDING SURCHARGE AND Three Months Ended
PENSION EARNINGS, INTEREST AND DEFERRALS September 30,
2014 2013
 
Net sales $ 549.8 $ 498.6
Less: surcharge revenue   109.7     86.5  
Consolidated net sales excluding surcharge $ 440.1   $ 412.1  
 
Operating income $ 22.1 $ 55.8
Pension earnings, interest and deferrals   2.4     6.0  
Operating income excluding pension earnings, interest
and deferrals $ 24.5   $ 61.8  
 
Operating margin excluding surcharge and pension earnings, interest
and deferrals   5.6 %   15.0 %
 

Management believes that removing the impacts of raw material surcharges from operating margin provides a more consistent basis for comparing results of operations from period to period. Management believes that excluding the impact of pension earnings, interest and deferrals, which may be volatile due to changes in the financial markets, is helpful in analyzing the true operating performance of the Company.

         
Three Months Ended
September 30,
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, 2014 2013
DEPRECIATION AND AMORTIZATION (EBITDA)
 
Net income $ 13.5 $ 34.6
 
Interest expense 7.0 4.4
Income tax expense 6.5 16.9
Depreciation and amortization 30.3 26.7
Other income, net   (4.9 )   (0.1 )
EBITDA $ 52.4 $ 82.5
Net pension expense   11.5     15.0  
 
Adjusted EBITDA $ 63.9   $ 97.5  

 

Management believes that earnings before interest, taxes, depreciation and amortization adjusted to exclude net pension expense is helpful in analyzing the operating performance of the Company.

       
Three Months Ended
September 30,
FREE CASH FLOW 2014   2013
Net cash provided from operating activities $ 15.0 $ 39.5
Purchases of property, equipment and software (59.0 ) (90.4 )
Proceeds from disposals of property and equipment 0.1 -
Dividends paid   (9.6 )   (9.6 )
 
Free cash flow $ (53.5 ) $ (60.5 )

 

Management believes that the free cash flow measure provides useful information to investors regarding our financial condition because it is a measure of cash generated which management evaluates for alternative uses.

       
PRELIMINARY
SUPPLEMENTAL SCHEDULES
(in millions)
(Unaudited)
 
Three Months Ended
September 30,
NET SALES BY END USE MARKET 2014 2013
 
End Use Market Excluding Surcharge:
Aerospace and defense $ 180.7 $ 182.9
Industrial and consumer 98.6 85.8
Energy 67.8 59.1
Transportation 30.7 25.5
Medical 26.7 25.0
Distribution   35.6   33.8
 
Consolidated net sales excluding surcharge 440.1 412.1
 
Surcharge revenue   109.7   86.5
 
Consolidated net sales $ 549.8 $ 498.6
 
 
 
Three Months Ended
September 30,
NET SALES BY MAJOR PRODUCT CLASS   2014   2013
 
Net Sales by Product Class Excluding Surcharge:
Special alloys $ 163.2 $ 149.8
Stainless steel 135.6 125.2
Alloy and tool steel 45.2 49.1
Titanium products 38.6 36.9
Powder metals 14.2 10.4
Distribution and other   43.3   40.7
 
Consolidated net sales excluding surcharge 440.1 412.1
 
Surcharge revenue   109.7   86.5
 
Consolidated net sales $ 549.8 $ 498.6
 

Carpenter Technology Corporation

Media Inquiries:

William J. Rudolph Jr., +1 610-208-3892

wrudolph@cartech.com

or

Investor Inquiries:

Michael A. Hajost, +1 610-208-3476

mhajost@cartech.com

Source: Carpenter Technology Corporation


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Oct 23, 2014 07:05AM Independence Contract Drilling, Inc. Announces Timing of Third Quarter 2014 Financial Results and Conference Call
Oct 23, 2014 07:05AM Henry Schein To Webcast Third Quarter 2014 Conference Call On Thursday, November 6, 2014 At 10:00 A.M. ET
Oct 23, 2014 07:05AM Probe-Based qPCR Approaches for Detection of SNPs and Validation of Molecular Diagnostics, Live Webinar Presented by Biosearch Technologies and Hosted by Xtalks
Oct 23, 2014 07:05AM Universal Electronics to Announce Third Quarter 2014 Financial Results on November 6, 2014
Oct 23, 2014 05:47AM CIMA, AICPA Release New Global Management Accounting Principles to Drive Better Organisational Decision Making
Oct 23, 2014 07:04AM NetSphere Strategies and Yottaa Unite to Create E-Commerce Success for Retailers
Oct 23, 2014 07:04AM Mack-Cali Realty Corporation Announces Third Quarter Results
Oct 23, 2014 07:04AM Alliott Group Member NSBN LLP Host Golf Tournament to Benefit Concern Foundation for Cancer Research
Oct 23, 2014 07:04AM Nexstar Broadcasting Enters into a Definitive Agreement to Acquire CW Affiliate KASW-TV in Phoenix for $68 Million in Accretive Transaction
Oct 23, 2014 07:03AM Huck Finn Jubilee Announces New Dates for 2015 and Beyond
Oct 23, 2014 07:03AM HIPOWER SYSTEMS Conducts On-Site Training at LarMar Industries;Sessions Highlight Natural Gas Generator and Diesel Generator Technologies
Oct 23, 2014 07:03AM Kount Supports Apple Pay: Merchants and Payment Processors Rapidly Support New Payment Types with Kount Complete, Kount Central
Oct 23, 2014 07:03AM Over 7 Billion People Live on the Planet, but Even a Small Child Has the Ability to Change the World
Oct 23, 2014 07:03AM Shofner Vision Center Recently Reports a Significant Increase in New Patients Who Are Vets
Oct 23, 2014 07:02AM Bad Credit Auto Lender Shares "Five Tips to Avoid Repossession" in New Article
Oct 23, 2014 07:02AM eOriginal Announces Gold Sponsorship of eSignRecords 2014 Conference
Oct 23, 2014 07:02AM EQT Midstream Partners Reports Q3 2014 Results
Oct 23, 2014 07:02AM EquipSupply announces the addition of Tsurumi pumps to its product line
Oct 23, 2014 07:01AM Husky Energy Announces 2014 Third Quarter Dividend
Oct 23, 2014 07:02AM CSU-Global's New Online Master of Professional Accounting Degree to Develop Students as Successful CPAs
Oct 23, 2014 07:02AM Sigma-Aldrich (NASDAQ - SIAL) Reports Q3 2014 Results With Sales Of $690 Million And Adjusted Diluted EPS Of $1.06. Declares $0.23 Per Share Quarterly Dividend.
Oct 23, 2014 07:02AM IWCC Training in Communications and Marketing CoPilot co-found A Woman's Voice Matters
Oct 23, 2014 07:00AM Husky Energy On Track with Third Quarter Results
Oct 23, 2014 07:00AM MENA Hydrocarbons Announces Completion of Transaction With SacOil Holdings Limited and Announces Special Dividend Record Date
Oct 23, 2014 07:00AM Brookfield Asset Management Proposes to Acquire 30% of Brookfield Residential Properties Not Currently Owned
Oct 23, 2014 07:01AM Sonus Networks Reports 2014 Third Quarter Results
Oct 23, 2014 07:01AM West Palm Beach Plastic Surgeons Unveil New Responsive Website
Oct 23, 2014 07:01AM Comcast Declares Quarterly Dividend
Oct 23, 2014 07:01AM Home Improvement Projects Remain Cosmetic While Home Maintenance Service Requests Increase
Oct 23, 2014 07:00AM Forensic Technology: Police Chiefs Honor IBIS Ballistics System Creator
Oct 23, 2014 07:01AM Two Final Rounds of 'Get in the Ring: The North American Startup Clash' to be Livestreamed
Oct 23, 2014 07:01AM Chicagoland Singles Hosts Food Drive Benefiting Greater Chicago Food Depository
Oct 23, 2014 07:01AM Corus Entertainment Declares Monthly Dividend for Class A and Class B Shareholders
Oct 23, 2014 07:01AM HomeThangs.com Has Introduced A Guide To Asymmetrical Bathroom Vanities With Offset Sinks
Oct 23, 2014 07:01AM ProRehab Provides Medical Support at YMCA Half Marathon
Oct 23, 2014 07:00AM Penn National Gaming Reports Third Quarter Revenue of $645.9 Million and Adjusted EBITDA of $65.7 Million, Inclusive of $104.6 Million of Rent Expense
Oct 23, 2014 07:00AM NeoGenomics is First to Offer Molecular Testing for Resistance to Bruton Tyrosin Kinase Inhibitors for Chronic Lymphocytic Leukemia
Oct 23, 2014 07:00AM Occidental Petroleum Announces 3rd Quarter and Nine Months 2014 Financial Results
Oct 23, 2014 07:00AM Local Business Owner to appear on ABC's Shark Tank
Oct 23, 2014 07:00AM First American Financial Reports Third Quarter 2014 Results
Oct 23, 2014 07:00AM Benchmark Electronics Results Exceed Third Quarter Guidance
Oct 23, 2014 07:00AM IMAX Corporation Reports Third Quarter 2014 Financial Results
Oct 23, 2014 07:00AM New Government Policies Could Wipe Out Small Business Programs
Oct 23, 2014 07:00AM Stewart Reports Results for the Third Quarter 2014
Oct 23, 2014 07:00AM SBA Refusing To Release Unredacted Terry Sutherland Emails
Oct 23, 2014 07:00AM Rich Pharmaceuticals Announces Submission of Investigational New Drug (IND) Application to FDA for the Treatment of Acute Myelocytic Leukemia and Myelodysplastic Syndrome
Oct 23, 2014 07:00AM Corus Entertainment Announces Fiscal 2014 Fourth Quarter and Year-End Results
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