AUTONATION, INC. 
By FORT LAUDERDALE, Fla., April 17, 2014 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported 2014 first quarter adjusted net income from continuing operations of $91 million, or $0.75 per share, compared to net income from continuing operations of $83 million, or $0.68 per share, for the same period in the prior year, a 10% improvement on a per-share basis. On a GAAP basis, first quarter 2014 net income from continuing operations was $96 million, or $0.79 per share. Reconciliations of non-GAAP financial measures are included in the attached financial tables.
2014 first quarter revenue totaled $4.4 billion, compared to $4.1 billion in the year-ago period, an increase of 7%, driven by stronger performance in all business sectors - new vehicles, used vehicles, parts and service, and finance and insurance. In the first quarter of 2014, AutoNation's retail new vehicle unit sales increased 4% on a same store basis and 6% overall.
Mike Jackson, Chairman and Chief Executive Officer, said, "AutoNation delivered solid growth in EPS and operating income in the first quarter of 2014 compared to the prior year, driven by gross profit growth in all of our business sectors. We continue to expect U.S. industry new vehicle unit sales to increase 3% to 5%, bringing U.S. industry new vehicle sales above 16 million units in 2014."
During the first quarter of 2014, AutoNation repurchased 2.4 million shares of common stock for an aggregate purchase price of $115.7 million. As of April 16, 2014, AutoNation has approximately $400 million remaining Board authorization for share repurchase and 119 million shares outstanding.
Segment results((1)) for the first quarter of 2014 were as follows:
-- Domestic - Domestic segment income((2)) was $64 million compared to
year-ago segment income of $59 million, an increase of 9%.
-- Import - Import segment income((2)) was $65 million compared to year-ago
segment income of $71 million, a decrease of 8%.
-- Premium Luxury - Premium Luxury segment income((2)) was $83 million
compared to year-ago segment income of $69 million, an increase of 21%.
The first quarter conference call may be accessed by telephone at (888) 769-8515 (password: AutoNation) at 11:00 a.m. Eastern Time or on AutoNation's investor relations website at investors.autonation.com.
The webcast will also be available on our website under "Events & Presentations" following the call. A playback of the conference call will be available after 1:00 p.m. Eastern Time on April 17, 2014, through April 24, 2014 by calling (800) 839-2314 (password 75300).
(1) AutoNation has three
operating segments:
Domestic, Import, and
Premium Luxury. The
Domestic segment is
comprised of stores that
sell vehicles manufactured
by General Motors, Ford,
and Chrysler; the Import
segment is comprised of
stores that sell vehicles
manufactured primarily by
Toyota, Honda, Nissan, and
Hyundai; and the Premium
Luxury segment is comprised
of stores that sell
vehicles manufactured
primarily by Mercedes-
Benz, BMW, Lexus, and Audi.
(2) Segment income for each of
our segments is defined as
operating income less
floorplan interest expense.
About AutoNation, Inc.
AutoNation is transforming the automotive retail industry through bold leadership. We deliver a superior automotive retail experience through our customer-focused sales and service processes. Owning and operating 270 new vehicle franchises, which sell 33 new vehicle brands across 15 states, AutoNation is America's largest automotive retailer, with state-of-the-art operations and the ability to leverage economies of scale that benefit the customer. As an indication of our leadership position in our industry, AutoNation is a component of the S&P 500 Index.
Please visit investors.autonation.com, www.autonation.com, www.twitter.com/autonation, www.twitter.com/CEOMikeJackson, www.facebook.com/autonation, and www.facebook.com/CEOMikeJackson, where AutoNation discloses additional information about the Company, its business, and its results of operations.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Words such as "anticipates," "expects," "intends," "goals," "plans," "believes," "continues," "may," "will," and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements regarding our expectations for the future performance of our franchises and the automotive retail industry, as well as statements that describe our objectives, goals, or plans, are forward-looking statements. Our forward-looking statements reflect our current expectations concerning future results and events, and they involve known and unknown risks, uncertainties and other factors that are difficult to predict and may cause our actual results, performance or achievements to be materially different from any future results, performance and achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: our ability to integrate successfully acquired and awarded franchises and to attain planned sales volumes within our expected time frames; economic conditions generally; conditions in the credit markets and changes in interest rates; the success and financial viability of vehicle manufacturers and distributors with which we hold franchises; factors affecting our goodwill and other intangible asset impairment testing; natural disasters and other adverse weather events; restrictions imposed by vehicle manufacturers; the resolution of legal and administrative proceedings; regulatory factors affecting our business; and other factors described in our news releases and filings made under the securities laws, including, among others, our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Forward-looking statements contained in this news release speak only as of the date of this news release, and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
NON-GAAP FINANCIAL MEASURES
This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as adjusted net income and earnings per share from continuing operations, which exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP measures. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure, provide a meaningful presentation of the Company's results from its core business operations excluding the impact of items not related to the Company's ongoing core business operations, and improve the period-to-period comparability of the Company's results from its core business operations.
AUTONATION, INC.
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS
(In millions, except per share data)
Three Months Ended March 31,
----------------------------
2014 2013
---- ----
Revenue:
New vehicle $2,428.6 $2,257.7
Used vehicle 1,049.7 1,009.7
Parts and
service 671.0 636.6
Finance and
insurance,
net 172.4 155.6
Other 41.8 36.8
---- ----
Total
revenue 4,363.5 4,096.4
------- -------
Cost of
sales:
New vehicle 2,282.7 2,116.0
Used vehicle 955.4 923.7
Parts and
service 384.3 364.3
Other 33.7 28.4
---- ----
Total cost
of sales 3,656.1 3,432.4
------- -------
Gross profit 707.4 664.0
Selling,
general and
administrative
expenses 500.7 473.3
Depreciation
and
amortization 25.6 22.7
Other
income, net (8.0) (1.4)
---- ----
Operating
income 189.1 169.4
Non-
operating
income
(expense)
items:
Floorplan
interest
expense (13.2) (12.9)
Other
interest
expense (21.6) (22.3)
Interest
income - 0.1
Other
income, net 1.5 1.6
--- ---
Income from
continuing
operations
before
income
taxes 155.8 135.9
Income tax
provision 60.3 52.7
---- ----
Net income
from
continuing
operations 95.5 83.2
Loss from
discontinued
operations,
net of
income
taxes (0.4) (0.2)
---- ----
Net income $95.1 $83.0
===== =====
Diluted
earnings
(loss) per
share*:
Continuing
operations $0.79 $0.68
Discontinued
operations $ - $ -
Net income $0.78 $0.67
Weighted
average
common
shares
outstanding 121.3 123.0
Common
shares
outstanding,
net of
treasury
stock, at
period end 119.4 121.3
* Earnings per share amounts are calculated discretely and therefore may not add up to
the total.
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended March 31,
-------------------- ----------------------------
2014 2013 $ Variance % Variance
---- ---- ---------- ----------
Revenue:
New vehicle $2,428.6 $2,257.7 $170.9 7.6
Retail used vehicle 945.8 899.2 46.6 5.2
Wholesale 103.9 110.5 (6.6) (6.0)
----- ----- ----
Used vehicle 1,049.7 1,009.7 40.0 4.0
Finance and insurance, net 172.4 155.6 16.8 10.8
Total variable operations 3,650.7 3,423.0 227.7 6.7
------- ------- -----
Parts and service 671.0 636.6 34.4 5.4
Other 41.8 36.8 5.0
Total revenue $4,363.5 $4,096.4 $267.1 6.5
======== ======== ======
Gross profit:
New vehicle $145.9 $141.7 $4.2 3.0
Retail used vehicle 92.8 83.4 9.4 11.3
Wholesale 1.5 2.6 (1.1)
Used vehicle 94.3 86.0 8.3 9.7
Finance and insurance 172.4 155.6 16.8 10.8
Total variable operations 412.6 383.3 29.3 7.6
----- ----- ----
Parts and service 286.7 272.3 14.4 5.3
Other 8.1 8.4 (0.3)
--- --- ----
Total gross profit 707.4 664.0 43.4 6.5
Selling, general and administrative expenses 500.7 473.3 (27.4) (5.8)
Depreciation and amortization 25.6 22.7 (2.9)
Other income, net (8.0) (1.4) 6.6
---- ---- ---
Operating income 189.1 169.4 19.7 11.6
Non-operating income (expense) items:
Floorplan interest expense (13.2) (12.9) (0.3)
Other interest expense (21.6) (22.3) 0.7
Interest income - 0.1 (0.1)
Other income, net 1.5 1.6 (0.1)
----
Income from continuing operations before income taxes $155.8 $135.9 $19.9 14.6
====== ====== =====
Retail vehicle unit sales:
New 71,223 67,159 4,064 6.1
Used 52,136 50,505 1,631 3.2
-----
123,359 117,664 5,695 4.8
======= ======= =====
Revenue per vehicle retailed:
New $34,099 $33,617 $482 1.4
Used $18,141 $17,804 $337 1.9
Gross profit per vehicle retailed:
New $2,048 $2,110 $(62) (2.9)
Used $1,780 $1,651 $129 7.8
Finance and insurance $1,398 $1,322 $76 5.7
Total variable operations(1) $3,333 $3,235 $98 3.0
Operating Percentages Three Months Ended March
31,
--------------------- ------------------------
2014 (%) 2013 (%)
------- -------
Revenue mix percentages:
New vehicle 55.7 55.1
Used vehicle 24.1 24.6
Parts and service 15.4 15.5
Finance and insurance, net 4.0 3.8
Other 0.8 1.0
100.0 100.0
===== =====
Gross profit mix percentages:
New vehicle 20.6 21.3
Used vehicle 13.3 13.0
Parts and service 40.5 41.0
Finance and insurance 24.4 23.4
Other 1.2 1.3
100.0 100.0
===== =====
Operating items as a percentage of revenue:
Gross profit:
New vehicle 6.0 6.3
Used vehicle - retail 9.8 9.3
Parts and service 42.7 42.8
Total 16.2 16.2
Selling, general and administrative expenses 11.5 11.6
Operating income 4.3 4.1
Operating items as a percentage of total gross profit:
Selling, general and administrative expenses 70.8 71.3
Operating income 26.7 25.5
(1) Total variable operations gross profit per vehicle retailed is calculated by dividing the
sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total
retail vehicle unit sales.
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions)
Segment Operating Highlights Three Months Ended March 31,
---------------------------- ----------------------------
2014 2013 $ Variance % Variance
---- ---- ---------- ----------
Revenue:
Domestic $1,473.0 $1,378.0 $95.0 6.9
Import 1,549.4 1,503.7 45.7 3.0
Premium luxury 1,306.4 1,172.9 133.5 11.4
------- ------- -----
Total segment revenue 4,328.8 4,054.6 274.2 6.8
Corporate and other 34.7 41.8 (7.1) (17.0)
Total consolidated revenue $4,363.5 $4,096.4 $267.1 6.5
======== ======== ======
Segment income*
Domestic $63.8 $58.6 $5.2 8.9
Import 65.4 71.0 (5.6) (7.9)
Premium luxury 83.3 68.8 14.5 21.1
---- ---- ----
Total segment income 212.5 198.4 14.1 7.1
Corporate and other (36.6) (41.9) 5.3
Add: Floorplan interest expense 13.2 12.9 0.3
Operating income $189.1 $169.4 $19.7 11.6
====== ====== =====
* Segment income for each of our segments is defined as operating income less floorplan interest expense
Retail new vehicle unit sales:
Domestic 23,815 22,544 1,271 5.6
Import 34,925 33,032 1,893 5.7
Premium luxury 12,483 11,583 900 7.8
71,223 67,159 4,064 6.1
====== ====== =====
Brand Mix - New Vehicle Retail Units Sold
-----------------------------------------
Three Months Ended March
31,
-------------------------
2014 (%) 2013 (%)
------- -------
Domestic:
Ford, Lincoln 17.7 18.3
Chevrolet, Buick, Cadillac, GMC 10.0 10.3
Chrysler, Jeep, Dodge 5.7 5.0
Domestic total 33.4 33.6
---- ----
Import:
Honda 11.4 11.1
Toyota 19.0 20.1
Nissan 11.6 11.0
Other imports 7.1 7.0
Import total 49.1 49.2
---- ----
Premium Luxury:
Mercedes-Benz 7.5 7.4
BMW 4.6 4.7
Lexus 2.6 2.2
Audi 1.0 1.2
Other premium luxury (Land Rover, Porsche) 1.8 1.7
Premium Luxury total 17.5 17.2
---- ----
100.0 100.0
===== =====
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions)
Capital Expenditures /Stock
Repurchases Three Months Ended March 31,
--------------------------- ----------------------------
2014 2013
---- ----
Capital expenditures(1) $34.9 $23.1
Cash paid for acquisitions $ - $2.8
Proceeds from exercises of stock
options $15.3 $7.9
Stock repurchases:
$115.7 $2.2
Aggregate purchase price
2.4 0.1
Shares repurchased (in millions)
Three Months Ended March 31,
Floorplan Assistance and Expense
--------------------------------
2014 2013 Variance
---- ---- --------
Floorplan assistance earned (included
in cost of sales) $24.0 $18.6 $5.4
New vehicle floorplan interest expense (12.7) (12.3) (0.4)
----- ----- ----
$11.3 $6.3 $5.0
Net new vehicle inventory carrying
benefit
Balance Sheet and Other Highlights
----------------------------------
March 31, 2014 December 31, 2013 March 31, 2013
-------------- ----------------- --------------
Cash and cash equivalents $69.2 $69.2 $46.3
Inventory $2,712.0 $2,827.2 $2,499.8
Total floorplan notes payable $2,844.2 $3,029.0 $2,541.0
Non-vehicle debt $1,803.9 $1,839.9 $1,957.3
Equity $2,068.9 $2,061.7 $1,786.6
New days supply (industry standard of
selling days)(2) 61 days 62 days 62 days
Used days supply (trailing calendar
month days) 31 days 35 days 29 days
Key Credit Agreement Covenant
Compliance Calculations
-----------------------------
Ratio of funded indebtedness/
Adjusted EBITDA 2.16x
Covenant less than or equal to 3.75x
-------- --------------------- -----
Ratio of funded indebtedness including
floorplan/
Total capitalization including
floorplan 56.4%
Covenant less than or equal to 65.0%
-------- --------------------- ----
(1) Includes accrued construction in progress and excludes property
acquired under capital leases
(2) As of December 31, 2013, we have revised our method of calculating
new vehicle days supply to exclude fleet sales and in-transit
inventory. We have revised prior periods to conform to our revised
method of calculation
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Comparable Basis Reconciliations*
--------------------------------
Three Months Ended March 31,
----------------------------
Net Income Diluted Earnings Per Share**
---------- ---------------------------
2014 2013 2014 2013
---- ---- ---- ----
As reported $95.1 $83.0 $0.78 $0.67
Discontinued operations, net of income taxes 0.4 0.2 $ - $ -
From continuing operations, as reported 95.5 83.2 $0.79 $0.68
Net gain related to business/property dispositions (5.0) - $(0.04) $ -
Adjusted $90.5 $83.2 $0.75 $0.68
===== =====
* Please refer to the "Non-GAAP Financial Measures" section of the Press Release.
** Diluted earnings per share amounts are calculated discretely and therefore may not
add up to the total.
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended March 31,
-------------------- ----------------------------
2014 2013 $ Variance % Variance
---- ---- ---------- ----------
Revenue:
New vehicle $2,388.2 $2,257.7 $130.5 5.8
Retail used vehicle 931.5 899.2 32.3 3.6
Wholesale 102.0 110.5 (8.5) (7.7)
Used vehicle 1,033.5 1,009.7 23.8 2.4
Finance and insurance, net 170.0 155.6 14.4 9.3
Total variable operations 3,591.7 3,423.0 168.7 4.9
Parts and service 660.5 636.6 23.9 3.8
Other 40.6 36.8 3.8
Total revenue $4,292.8 $4,096.4 $196.4 4.8
======== ======== ======
Gross profit:
New vehicle $143.6 $141.7 $1.9 1.3
Retail used vehicle 91.4 83.4 8.0 9.6
Wholesale 1.4 2.6 (1.2)
Used vehicle 92.8 86.0 6.8 7.9
Finance and insurance 170.0 155.6 14.4 9.3
Total variable operations 406.4 383.3 23.1 6.0
Parts and service 282.3 272.3 10.0 3.7
Other 8.0 8.4 (0.4)
Total gross profit $696.7 $664.0 $32.7 4.9
====== ====== =====
Retail vehicle unit sales:
New 69,724 67,159 2,565 3.8
Used 51,111 50,505 606 1.2
---
120,835 117,664 3,171 2.7
======= ======= =====
Revenue per vehicle retailed:
New $34,252 $33,617 $635 1.9
Used $18,225 $17,804 $421 2.4
Gross profit per vehicle retailed:
New $2,060 $2,110 $(50) (2.4)
Used $1,788 $1,651 $137 8.3
Finance and insurance $1,407 $1,322 $85 6.4
Total variable operations(1) $3,352 $3,235 $117 3.6
Operating Percentages Three Months Ended March
31,
--------------------- -------------------------
2014 (%) 2013 (%)
------- -------
Revenue mix percentages:
New vehicle 55.6 55.1
Used vehicle 24.1 24.6
Parts and service 15.4 15.5
Finance and insurance, net 4.0 3.8
Other 0.9 1.0
100.0 100.0
===== =====
Gross profit mix percentages:
New vehicle 20.6 21.3
Used vehicle 13.3 13.0
Parts and service 40.5 41.0
Finance and insurance 24.4 23.4
Other 1.2 1.3
100.0 100.0
===== =====
Operating items as a percentage of revenue:
Gross profit:
New vehicle 6.0 6.3
Used vehicle - retail 9.8 9.3
Parts and service 42.7 42.8
Total 16.2 16.2
(1) Total variable operations gross profit per vehicle retailed is calculated by
dividing the sum of new vehicle, retail used vehicle, and finance and insurance
gross profit by total retail vehicle unit sales.
SOURCE AutoNation, Inc.
