Group 1 Automotive Doubles Profitability in Third Quarter 2009
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HOUSTON, TX -- (MARKET WIRE) -- 10/27/09 -- Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today reported third-quarter adjusted net income from continuing operations of $16.8 million, or $0.71 per diluted share, for the period ended Sept. 30, 2009, as compared to the 2008 adjusted results of $8.2 million, or $0.37 per diluted share. For comparison purposes, as shown in the attached reconciliation table, the adjusted 2009 third-quarter results excluded net after-tax gains of $1.5 million, or $0.07 per diluted share, for an income tax benefit related to tax elections that reduced the tax liability for prior-period items; non-cash asset impairment charges, primarily related to real estate holdings; and, gains on debt redemptions. The adjusted 2008 third-quarter results excluded net after-tax charges of $30.0 million, or $1.33 per diluted share, for non-cash asset impairment and lease termination charges, and gains on debt redemptions. Including the one-time items, net income from continuing operations was $18.3 million, or $0.78 per diluted share, for the quarter ended Sept. 30, 2009.
"Our strong third-quarter performance validates that Group 1's business model is flexible enough to react quickly to changes in market conditions," said Earl J. Hesterberg, Group 1's president and chief executive officer. "The cost reductions and inventory controls we implemented in the first half of the year have positioned Group 1 to benefit from any improvement in new vehicle volumes, as demonstrated this quarter."
Third-Quarter Operating Highlights
-- Group 1 retailed 25,057 new vehicles during the quarter, including
4,874 under the government's CARS program.
-- Group 1's same-store gross margin improved 100 basis points, to 17.0
percent, from third quarter 2008. The gross margin improvement was
attributed to improved new vehicle, total used vehicle and the parts and
service margins, as well as the continued mix shift to the more profitable
segments of the business.
-- Same-store new vehicle margins expanded 90 basis points from the
second-quarter, to 6.7 percent, as lower inventory and stronger demand
combined to provide a more favorable selling environment.
-- Same-store used vehicle gross profit improved $228 per wholesale unit,
from the prior-year quarter, as limited supply increased valuations, while
retail gross margins fell 30 basis points, to 10.3 percent, as more
vehicles were sourced at auction.
-- Group 1's same-store parts and service business improved on both a
year-over-year and sequential basis, with a gross margin of 53.7 percent.
-- On a consolidated basis, Group 1's selling, general and administrative
(SG&A) expenses were reduced $26.7 million in the quarter, bringing the
total expense reduction to $112.8 million year to date.
-- Operating margin improved to 3.4 percent.
-- Generated $54.8 million in adjusted operating cash flow during the
quarter and $100.7 million year to date.
Corporate Development Update
Year to date, Group 1 has added three franchises with estimated annual revenues of approximately $46.7 million and has disposed of eight franchises with annual revenues of $126.2 million.
Group 1's Balance Sheet Strengthened
Group 1 reported its new vehicle inventory stood at $298.7 million on Sept. 30, reflecting a $75.7 million reduction from the second quarter and a $370.6 million reduction from the prior-year period. In addition, the company reduced non-floorplan debt by $37.1 million during the quarter, primarily reflecting the payoff of its outstanding acquisition line borrowings of $30.0 million and repurchases of $5.0 million of its 2.25 percent convertible bonds. The company ended the quarter with overall immediately available funds of $85.9 million and overall available liquidity of $232.8 million.
"With the strong operating cash that the company generated this year, we continued to strengthen Group 1's balance sheet by reducing total non-floorplan debt by $112.4 million during the nine-month period," said John C. Rickel, Group 1's senior vice president and chief financial officer.
2009 Full-Year Guidance Revised
Group 1 has revised its 2009 full-year earnings guidance to a range of $1.66 to $1.76 per diluted share under the following assumptions:
-- Industry seasonally adjusted annual sales rate (SAAR) of 10.0 to 10.2
million vehicles
-- Total year-over-year reduction in SG&A expenses of $120 million at
projected SAAR levels
-- Tax rate of 38.0 percent
-- Estimated average diluted shares outstanding of 23.4 million
-- Capital expenditures of approximately $20 million
-- Guidance includes the impact of APB 14-1 and excludes the impact of
future acquisitions, dispositions with their potential exit costs, and any
potential one-time items
Fourth-quarter same-store assumptions:
-- New vehicle margins of 6.0 percent to 6.5 percent
-- Used vehicle retail margins of 10.0 percent to 10.5 percent
-- Used vehicle wholesale margins at about break-even
-- Flat parts and service revenues
-- Finance and insurance gross profit of $925 to $950 per retail unit
Third-Quarter Earnings Conference Call (REPLAY NUMBER UPDATED)
Group 1's senior management will host a conference call today at 10 a.m. ET to discuss the third-quarter financial results and the company's 2009 outlook and strategy.
The conference call will be simulcast live on the Internet at www.group1auto.com through the Investor Relations section. A replay will be available for 30 days.
The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:
Domestic: 877.795.3648 International: 719.325.4752 Participant Passcode: 8845933
A telephonic replay will be available following the call through Nov. 3 by dialing:
Domestic: 888.203.1112 International: 719.457.0820 (UPDATED) Replay Passcode: 8845933
About Group 1 Automotive, Inc.
Group 1 owns and operates 96 automotive dealerships, 128 franchises, and 23 collision service centers in the United States and the United Kingdom that offer 31 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts.
Group 1 Automotive can be reached on the Internet at www.group1auto.com.
This press release contains "forward-looking statements," which are statements related to future, not past, events. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks" or "will." Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. These factors, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K under the headings "Business--Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." We urge you to carefully consider this information. We undertake no duty to update our forward-looking statements, including our earnings outlook.
Group 1 Automotive, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ------------------------------
% %
2009 2008 Change 2009 2008 Change
--------- --------- ------ ---------- ---------- ------
REVENUES:
New vehicle
retail
sales $ 728,089 $ 877,669 (17.0)% $1,883,973 $2,737,732 (31.2)%
Used
vehicle
retail
sales 254,716 262,443 (2.9) 729,345 865,031 (15.7)
Used
vehicle
wholesale
sales 43,151 58,689 (26.5) 112,536 193,412 (41.8)
Parts and
service 183,254 188,576 (2.8) 547,224 572,165 (4.4)
Finance and
insurance 37,509 46,597 (19.5) 102,213 152,012 (32.8)
--------- --------- ----- ---------- ---------- ------
Total
revenues 1,246,719 1,433,974 (13.1)% 3,375,291 4,520,352 (25.3)%
COST OF
SALES:
New vehicle
retail
sales 679,470 821,964 (17.3)% 1,770,900 2,561,863 (30.9)%
Used
vehicle
retail
sales 228,445 234,527 (2.6) 652,640 771,132 (15.4)
Used
vehicle
wholesale
sales 41,872 59,623 (29.8) 109,205 195,081 (44.0)
Parts and
service 84,911 88,241 (3.8) 256,756 263,667 (2.6)
--------- --------- ----- ---------- ---------- ------
Total
cost
of
sales 1,034,698 1,204,355 (14.1)% 2,789,501 3,791,743 (26.4)%
--------- --------- ----- ---------- ---------- ------
GROSS
PROFIT 212,021 229,619 (7.7)% 585,790 728,609 (19.6)%
SELLING,
GENERAL
AND
ADMINIST-
RATIVE
EXPENSES 162,466 189,209 (14.1) 466,813 579,608 (19.5)
DEPRECIATION
AND
AMORTIZATION
EXPENSE 6,666 6,734 (1.0) 19,541 19,049 2.6
ASSET
IMPAIRMENTS 702 48,086 (98.5) 2,837 48,086 (94.1)
--------- --------- ----- ---------- ---------- ------
OPERATING
INCOME
(LOSS) 42,187 (14,410) 392.8% 96,599 81,866 18.0%
OTHER
INCOME
(EXPENSE):
Floorplan
interest
expense (7,523) (11,236) (33.0) (24,342) (35,636) (31.7)
Other
interest
expense,
net (7,318) (9,202) (20.5) (21,857) (27,981) (21.9)
Gain on
redemption
of
long-term
debt 598 495 20.8 8,211 904 808.3
Other
income
(expense),
net (4) (41) (90.2) (6) 273 (102.2)
--------- --------- ----- ---------- ---------- ------
INCOME
(LOSS)
FROM
CONTINUING
OPERATIONS
BEFORE
INCOME
TAXES 27,940 (34,394) 181.2% 58,605 19,426 201.7%
BENEFIT
FROM
(PROVISION
FOR)
INCOME
TAXES (9,600) 12,577 (176.3) (21,808) (8,059) 170.6
--------- --------- ----- ---------- ---------- ------
INCOME
(LOSS)
FROM
CONTINUING
OPERATIONS 18,340 (21,817) 184.1% 36,797 11,367 223.7%
DISCONTINUED
OPERATIONS:
Loss
related to
discontinued
operations - - - - (3,481) (100.0)
Income tax
benefit
related to
loss on
discontinued
operations - - - - 1,478 (100.0)
--------- --------- ----- ---------- ---------- ------
LOSS
RELATED TO
DISCONTINUED
OPERATIONS - - - - (2,003) (100.0)
--------- --------- ----- ---------- ---------- ------
NET INCOME
(LOSS) $ 18,340 $ (21,817) 184.1% $ 36,797 $ 9,364 $293.0%
========= ========= ===== ========== ========== ======
DILUTED
INCOME
(LOSS) PER
SHARE:
Income
(loss) per
share from
continuing
operations $ 0.78 $ (0.96) 181.3% $ 1.58 $ 0.50 216.0%
Loss per
share
related to
discontinued
operations - - - - (0.09) (100.0)
--------- --------- ----- ---------- ---------- ------
Income
(loss)
per share $ 0.78 $ (0.96) 181.3% $ 1.58 $ 0.41 285.4%
========= ========= ===== ========== ========== ======
Weighted
average
diluted
shares
outstanding 23,503 22,716 3.5% 23,240 22,641 2.6%
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
September 30, December 31,
2009 2008 % Change
------------ ------------ -----------
(Unaudited)
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 14,882 $ 23,144 (35.7)%
Contracts in transit and
vehicle receivables, net 67,045 102,834 (34.8)
Accounts and notes receivable,
net 52,667 67,350 (21.8)
Inventories 471,189 845,944 (44.3)
Deferred income taxes 15,504 18,474 (16.1)
Prepaid expenses and other
current assets 31,781 38,878 (18.3)
------------ ------------ -----------
Total current assets 653,068 1,096,624 (40.4)
PROPERTY AND EQUIPMENT, net 492,191 514,891 (4.4)
GOODWILL AND OTHER INTANGIBLES 656,013 655,784 0.0
OTHER ASSETS 17,924 20,815 (13.9)
------------ ------------ -----------
Total assets $ 1,819,196 $ 2,288,114 (20.5)%
============ ============ ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY:
CURRENT LIABILITIES:
Floorplan notes payable -
credit facility $ 374,441 $ 738,551 (49.3)%
Offset account related to
floorplan notes payable -
credit facility (71,010) (44,859) 58.3
Floorplan notes payable -
manufacturer affiliates 89,654 128,580 (30.3)
Current maturities of
long-term debt 13,663 13,594 0.5
Accounts payable 69,633 74,235 (6.2)
Accrued expenses 89,518 94,395 (5.2)
------------ ------------ -----------
Total current liabilities 565,899 1,004,496 (43.7)
2.25% CONVERTIBLE SENIOR NOTES
(aggregate principal of
$182,753 and $224,500,
respectively) 130,449 155,333 (16.0)
8.25% SENIOR SUBORDINATED NOTES 73,189 72,962 0.3
MORTGAGE FACILITY, net of current
maturities 179,669 168,583 6.6
OTHER REAL ESTATE RELATED AND
LONG-TERM DEBT, net of current
maturities 19,670 50,444 (61.0)
CAPITAL LEASE OBLIGATIONS RELATED
TO REAL ESTATE, net of current
maturities 38,125 39,401 (3.2)
ACQUISITION LINE - 50,000 (100.0)
DEFERRED INCOME TAXES 25,643 2,768 826.4
LIABILITIES FROM INTEREST RATE
RISK MANAGEMENT ACTIVITIES 37,455 44,655 (16.1)
OTHER LIABILITIES 26,925 27,135 (0.8)
DEFERRED REVENUES 6,743 10,220 (34.0)
STOCKHOLDERS' EQUITY:
Common stock 261 261 -
Additional paid-in capital 348,913 351,405 (0.7)
Retained earnings 473,884 437,087 8.4
Accumulated other
comprehensive loss (30,615) (38,109) (19.7)
Treasury stock (77,014) (88,527) (13.0)
------------ ------------ -----------
Total stockholders' equity 715,429 662,117 8.1
------------ ------------ -----------
Total liabilities and
stockholders' equity $ 1,819,196 $ 2,288,114 (20.5)%
============ ============ ===========
KEY DEBT COVENANT METRICS: *
Senior secured leverage ratio
(must be less than 2.75) 1.11 1.49
Total leverage ratio (must be
less than 4.50) 2.80 3.46
Fixed charge coverage ratio
(must be greater than 1.25) 1.93 1.59
Current ratio (must be greater
than 1.15) 1.39 1.18
* Refer to website, www.group1auto.com, for debt covenant calculation
definitions.
Group 1 Automotive, Inc.
Consolidated Statements of Adjusted Cash Flows from Continuing Operations
(Unaudited)
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Income from continuing
operations $ 18,340 $ (21,817) $ 36,797 $ 11,367
Adjustments to reconcile income
from continuing operations to
net cash provided by operating
activities:
Asset Impairments 702 48,086 2,837 48,086
Depreciation and amortization 6,666 6,734 19,541 19,049
Deferred income taxes 8,177 (11,533) 23,078 9,279
Amortization of debt discount
and issue costs 1,270 2,593 5,413 7,664
Stock based compensation 1,940 1,508 7,367 4,894
Excess tax benefits from
stock-based compensation (175) 454 348 276
Gain on redemption of
long-term debt (598) (495) (8,211) (904)
Other 708 (426) (1,213) (137)
Changes in operating assets and
liabilities, net of effects
of acquisitions and dispositions:
Contracts-in-transit and
vehicle receivables 11,762 57,025 35,909 101,207
Inventories 69,500 72,535 373,146 28,261
Floorplan notes payable -
manufacturer affiliates 4,265 (29,744) (39,454) (33,266)
Floorplan notes payable -
credit facility (83,806) (66,949) (364,109) (10,366)
Accounts payable and accrued
expenses 2,251 (16,615) (15,478) (17,043)
Accounts and notes receivable 6,997 11,663 20,865 10,693
Deferred revenues (913) (1,867) (3,477) (4,705)
Prepaid expenses and other
assets 7,668 3,108 7,304 18,320
--------- --------- --------- ---------
Adjusted net cash provided by
operating activities, from
continuing operations $ 54,754 $ 54,260 $ 100,663 $ 192,675
--------- --------- --------- ---------
Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
Three Months Ended, Nine Months Ended,
September 30, September 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
NEW VEHICLE UNIT SALES
GEOGRAPHIC MIX:
Region Geographic Market
Eastern Massachusetts 16.6% 12.9% 15.2% 12.1%
New Jersey 6.2 7.1 6.6 6.9
New Hampshire 4.6 3.9 4.1 3.6
New York 3.5 4.0 4.1 4.2
Georgia 3.5 3.4 3.6 3.4
Louisiana 3.1 2.9 3.2 3.2
Mississippi 1.9 1.6 1.8 1.6
Florida 1.3 2.3 1.6 2.5
Maryland 0.9 0.8 0.9 0.5
Alabama 0.6 0.9 0.6 0.9
South Carolina 0.3 0.3 0.3 0.3
--------- --------- --------- ---------
42.5 40.1 42.0 39.2
Central Texas 31.6 31.0 32.1 32.1
Oklahoma 8.2 9.6 8.4 9.5
Kansas 1.2 1.4 1.2 1.3
--------- --------- --------- ---------
41.0 42.0 41.7 42.9
Western California 14.2 16.2 14.1 16.2
International United Kingdom 2.3 1.7 2.2 1.7
--------- --------- --------- ---------
100.0% 100.0% 100.0% 100.0%
NEW VEHICLE UNIT SALES BRAND
MIX:
Toyota/Scion/Lexus 38.4% 34.2% 36.2% 34.9%
Nissan/Infiniti 14.1 13.5 12.9 13.1
Honda/Acura 12.2 14.5 13.0 14.2
BMW/Mini 9.2 9.4 9.5 8.5
Ford 8.0 9.8 8.6 10.3
Mercedes-Benz 4.8 6.0 5.4 5.7
Chrysler 4.4 5.1 5.7 5.9
GM 3.4 4.9 3.7 4.8
Other 5.5 2.6 5.0 2.6
--------- --------- --------- ---------
100.0% 100.0% 100.0% 100.0%
NEW VEHICLE UNIT OTHER MIX:
Import 62.4% 56.8% 58.5% 56.8%
Luxury 22.5 25.4 24.4 24.3
Domestic 15.1 17.8 17.1 18.9
--------- --------- --------- ---------
100.0% 100.0% 100.0% 100.00%
Car 62.2% 56.4% 59.1% 57.9%
Truck 37.8 43.6 40.9 42.1
--------- --------- --------- ---------
100.0% 100.0% 100.0% 100.0%
Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
(Dollars in thousands, except per unit amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
% %
2009 2008 Change 2009 2008 Change
---------- ---------- ------ ---------- ---------- ------
REVENUES:
New vehicle
retail
sales $ 728,089 $ 877,669 (17.0)% $1,883,973 $2,737,732 (31.2)%
Used
vehicle
retail
sales 254,716 262,443 (2.9) 729,345 865,031 (15.7)
Used
vehicle
wholesale
sales 43,151 58,689 (26.5) 112,536 193,412 (41.8)
---------- ---------- ---------- ----------
Total
used 297,867 321,132 (7.2) 841,881 1,058,443 (20.5)
Parts and
service 183,254 188,576 (2.8) 547,224 572,165 (4.4)
Finance
and
insurance 37,509 46,597 (19.5) 102,213 152,012 (32.8)
---------- ---------- ---------- ----------
Total $1,246,719 $1,433,974 (13.1)% $3,375,291 $4,520,352 (25.3)%
GROSS
MARGIN:
New vehicle
retail
sales 6.7% 6.3% 6.0% 6.4%
Used vehicle
retail
sales 10.3 10.6 10.5 10.9
Used vehicle
wholesale
sales 3.0 (1.6) 3.0 (0.9)
Total
used 9.2 8.4 9.5 8.7
Parts and
service 53.7 53.2 53.1 53.9
Finance
and
insurance 100.0 100.0 100.0 100.0
Total 17.0% 16.0% 17.4% 16.1%
GROSS
PROFIT:
New vehicle
retail
sales $ 48,619 $ 55,705 (12.7)% $ 113,073 $ 175,869 (35.7)%
Used
vehicle
retail
sales 26,271 27,916 (5.9) 76,705 93,899 (18.3)
Used
vehicle
wholesale
sales 1,279 (934) 236.9 3,331 (1,669) 299.6
---------- ---------- ---------- ----------
Total
used 27,550 26,982 2.1 80,036 92,230 (13.2)
Parts and
service 98,343 100,335 (2.0) 290,468 308,498 (5.8)
Finance
and
insurance 37,509 46,597 (19.5) 102,213 152,012 (32.8)
---------- ---------- ---------- ----------
Total $ 212,021 $ 229,619 (7.7)% $ 585,790 $ 728,609 (19.6)%
UNITS
SOLD:
Retail new
vehicles
sold 25,057 28,661 (12.6)% 62,942 89,548 (29.7)%
Retail used
vehicles
sold 14,175 15,057 (5.9) 41,181 48,945 (15.9)
Wholesale
used
vehicles
sold 8,367 9,399 (11.0) 21,222 29,651 (28.4)
---------- ---------- ---------- ----------
Total
used 22,542 24,456 (7.8)% 62,403 78,596 (20.6)%
GROSS PROFIT
PER UNIT SOLD:
New vehicle
retail
sales $ 1,940 $ 1,944 (0.2)% $ 1,796 $ 1,964 (8.6)%
Used
vehicle
retail
sales 1,853 1,854 (0.1) 1,863 1,918 (2.9)
Used
vehicle
wholesale
sales 153 (99) 254.5 157 (56) 380.4
Total
used 1,222 1,103 10.8 1,283 1,173 9.4
Finance
and
insurance
(per
retail
unit) $ 956 $ 1,066 (10.3)% $ 982 $ 1,098 (10.6)%
OTHER:
SG&A
expenses $ 162,466 $ 189,209 (14.1)% $ 466,813 $ 579,608 (19.5)%
SG&A as
% revenues 13.0% 13.2% 13.8% 12.8%
SG&A as
% gross
profit 76.6% 82.4% 79.7% 79.5%
Operating
margin 3.4% (1.0)% 2.9% 1.8%
Pretax
margin 2.2% (2.4)% 1.7% 0.4%
Floorplan
interest $ (7,523) $ (11,236) (33.0)% $ (24,342) $ (35,636) (31.7)%
Floorplan
assistance 5,771 7,383 (21.8) 15,030 22,948 (34.5)
---------- ---------- ---------- ----------
Net
floor-
plan
expense $ (1,752) $ (3,853) (54.5)% $ (9,312) $ (12,688) (26.6)%
Group 1 Automotive, Inc.
Additional Information - Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
% %
2009 2008 Change 2009 2008 Change
---------- ---------- ------ ---------- ---------- ------
REVENUES:
New vehicle
retail
sales $ 728,090 $ 865,836 (15.9)% $1,871,662 $2,699,930 (30.7)%
Used
vehicle
retail
sales 254,715 257,971 (1.3) 722,965 851,505 (15.1)
Used
vehicle
wholesale
sales 43,149 57,755 (25.3) 111,574 190,438 (41.4)
---------- ---------- ---------- ----------
Total
used $ 297,864 315,726 (5.7) 834,539 1,041,943 (19.9)
Parts and
service 183,254 184,929 (0.9) 542,403 561,552 (3.4)
Finance
and
insurance 37,471 46,217 (18.9) 101,770 150,718 (32.5)
---------- ---------- ---------- ----------
Total $1,246,679 1,412,708 (11.8)% $3,350,374 4,454,143 (24.8)%
GROSS MARGIN:
New vehicle
retail
sales 6.7% 6.4% 6.0% 6.4%
Used vehicle
retail
sales 10.3 10.6 10.5 10.8
Used vehicle
wholesale
sales 3.0 (1.2) 3.0 (0.6)
Total
used 9.2 8.4 9.5 8.7
Parts and
service 53.7 53.3 53.1 53.9
Finance
and
insurance 100.0 100.0 100.0 100.0
Total 17.0% 16.0% 17.4% 16.1%
GROSS PROFIT:
New vehicle
retail
sales $ 48,620 $ 55,114 (11.8)% $ 112,572 $ 173,670 (35.2)%
Used
vehicle
retail
sales 26,273 27,363 (4.0) 76,023 92,273 (17.6)
Used
vehicle
wholesale
sales 1,277 (696) 283.5 3,315 (1,189) 378.8
---------- ---------- ---------- ----------
Total
used 27,550 26,667 3.3 79,338 91,084 (12.9)
Parts and
service 98,371 98,507 (0.1) 287,761 302,760 (5.0)
Finance
and
insurance 37,471 46,217 (18.9) 101,770 150,718 (32.5)
---------- ---------- ---------- ----------
Total 212,012 226,505 (6.4)% 581,441 718,232 (19.0)%
UNITS SOLD:
Retail new
vehicles
sold 25,057 28,269 (11.4)% 62,608 88,318 (29.1)%
Retail used
vehicles
sold 14,175 14,792 (4.2) 40,935 48,130 (14.9)
Wholesale
used
vehicles
sold 8,367 9,251 (9.6) 21,104 29,191 (27.7)
---------- ---------- ---------- ----------
Total
used 22,542 24,043 (6.2)% 62,039 77,321 (19.8)%
GROSS PROFIT
PER UNIT
SOLD:
New vehicle
retail
sales $ 1,940 $ 1,950 (0.5)% $ 1,798 $ 1,966 (8.5)%
Used
vehicle
retail
sales 1,853 1,850 0.2 1,857 1,917 (3.1)
Used
vehicle
wholesale
sales 153 (75) 304.0 157 (41) 482.9
Total
used 1,222 1,109 10.2 1,279 1,178 8.6
Finance
and
insurance
(per
retail
unit) $ 955 $ 1,073 (11.0)% $ 983 $ 1,105 (11.0)%
OTHER:
SG&A
expenses $ 162,007 $ 185,822 (12.8)% $ 462,735 $ 568,666 (18.6)%
SG&A as
% revenues 13.0% 13.2% 13.8% 12.8%
SG&A as
% gross
profit 76.4% 82.0% 79.6% 79.2%
Operating
margin 3.4% (1.0)% 2.9% 1.9%
Floorplan
interest $ (7,522) $ (11,070) (32.1)% $ (24,253) $ (35,089) (30.9)%
Floorplan
assistance 5,771 7,272 (20.6) 15,011 22,578 (33.5)
---------- ---------- ---------- ----------
Net
floor-
plan
expense $ (1,751) $ (3,798) (53.9)% $ (9,242) $ (12,511) (26.1)%
(1) Same store amounts include the results for the identical months in each
period presented in the comparison, commencing with the first full
month we owned the dealership and, in the case of dispositions, ending
with the last full month we owned it. Same store results also include
the activities of our corporate office.
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
NET INCOME FROM CONTINUING OPERATIONS RECONCILIATION:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- --------------------------
% %
2009 2008 Change 2009 2008 Change
-------- -------- ------ -------- -------- ------
Reported income
(loss) from
continuing
operations $ 18,340 $(21,817) 184.1% $ 36,797 $ 11,367 223.7%
Adjustments:
Non-Cash asset
impairment
charges 461 30,174 1,726 30,174
Mortgage debt
refinance
charges - - 331 -
Gain on
dealership
disposition - - (451) -
Gain on debt
redemption (393) (303) (5,299) (555)
Income tax
benefit
related
to tax
elections
for prior
periods (1,604) - (1,604) -
Lease
termination
charges - 135 - 670
-------- -------- -------- --------
Adjusted net
income from
continuing
operations
(1) $ 16,804 $ 8,189 105.2% $ 31,500 $ 41,656 (24.4)%
DILUTED INCOME PER SHARE FROM CONTINUING OPERATIONS RECONCILIATION:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- --------------------------
% %
2009 2008 Change 2009 2008 Change
-------- -------- ------ -------- -------- ------
Reported income
(loss) per share
from continuing
operations $ 0.78 $ (0.96) 181.3% $ 1.58 $ 0.50 216.0%
Adjustments:
Non-Cash asset
impairment
charges 0.02 1.33 0.08 1.33
Mortgage debt
refinance
charges - - 0.01 -
Gain on
dealership
disposition - - (0.02) -
Gain on debt
redemption (0.02) (0.01) (0.22) (0.02)
Income tax
benefit
related
to tax
elections
for prior
periods (0.07) - (0.07) -
Lease
termination
charges - 0.01 - 0.03
-------- -------- -------- --------
Adjusted
diluted
income
per share
from
continuing
operations
(1) $ 0.71 $ 0.37 91.9% $ 1.36 $ 1.84 (26.1)%
CASH FLOWS FROM CONTINUING OPERATIONS RECONCILIATION:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- --------------------------
% %
2009 2008 Change 2009 2008 Change
-------- -------- ------ -------- -------- ------
Net cash provided
by operating
activities, from
continuing
operations $138,560 $121,209 14.3% $464,772 $203,041 128.9%
Adjustments:
Change in
floorplan
notes
payable-credit
facility,
excluding
floorplan
offset
account (83,806) (66,949) (364,109) (10,366)
-------- -------- -------- --------
Adjusted net
cash provided
by operating
activities,
from
continuing
operations
(1) $ 54,754 $ 54,260 0.9% $100,663 $192,675 (47.8)%
(1) Adjusted net income from continuing operations, adjusted diluted
earnings per share from continuing operations and adjusted net cash
provided by operating activities, from continuing operations mean net
income from continuing operations, diluted earnings per share from
continuing operations and net cash provided by operating activities
from continuing operations in accordance with GAAP, as the case may be,
plus the adjustments noted above. We believe that these adjusted
financial measures are relevant and useful to investors because they
provide additional information regarding the performance of our
operations and improve period-to-period comparability. These measures
are not measures of financial performance under GAAP. Accordingly, they
should not be considered as substitutes for their unadjusted
counterparts, which are prepared in accordance with GAAP. Although we
find these non-GAAP results useful in evaluating the performance of our
business, our reliance on these measures is limited because the
adjustments often have a material impact on our financial statements
calculated in accordance with GAAP. Therefore, we typically use these
adjusted numbers in conjunction with our GAAP results to address these
limitations.
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AT GROUP 1: President and CEO Earl J. Hesterberg (713) 647-5700 Senior Vice President and CFO John C. Rickel (713) 647-5700 Manager, Investor Relations Kim Paper Canning (713) 647-5700 AT Fleishman-Hillard: Investors John Roper (713) 513-9505 AT Pierpont Communications: Media Clint L. Woods (713) 627-2223
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