AUTONATION, INC. FORT LAUDERDALE, Fla., April 22, 2015 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported 2015 first quarter net income from continuing operations of $112 million, or $0.97 per share, compared to adjusted net income from continuing operations of $91 million, or $0.75 per share, for the same period in the prior year, a 29% 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.
First quarter 2015 revenue totaled $4.9 billion, an increase of 13%, driven by stronger performance in all business sectors - new vehicles, used vehicles, parts and service, and finance and insurance. In the first quarter of 2015, AutoNation's retail new vehicle unit sales increased 10% overall and 9% on a same store basis, while retail used vehicle unit sales increased 12% overall and 11% on a same store basis.
Commenting on the quarterly results, Mike Jackson, Chairman, Chief Executive Officer and President, said, "AutoNation delivered its 18th consecutive quarter of double-digit year-over-year growth in EPS as we increased profitability in each of our business sectors." Mr. Jackson added, "We continue to expect U.S. industry new vehicle unit sales above 17 million in 2015."
Acquisitions
In April 2015, AutoNation completed the acquisitions of a Mercedes-Benz store in San Jose, California and a Chrysler Dodge Jeep Ram store in Valencia, California. In addition, AutoNation has signed an agreement to acquire a Jaguar, Land Rover and Volvo store in Spokane, Washington, subject to customary terms and conditions, including manufacturer approval. As previously announced, during the first quarter of 2015, AutoNation completed the acquisitions of a Mercedes-Benz store in Reno, Nevada and a Volkswagen store in the Atlanta, Georgia market. The combined annual revenue for the stores acquired since the beginning of 2015 and the Jaguar, Land Rover and Volvo store is approximately $320 million.
Segment Results
Segment results((1)) for the first quarter of 2015 were as follows:
-- Domestic - Domestic segment income((2)) was $79 million compared to
year-ago segment income of $64 million, an increase of 24%.
-- Import - Import segment income((2)) was $75 million compared to year-ago
segment income of $65 million, an increase of 15%.
-- Premium Luxury - Premium Luxury segment income((2)) was $94 million
compared to year-ago segment income of $83 million, an increase of 13%.
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 AutoNation's 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 22, 2015 through May 6, 2015 by calling (888) 568-0435 (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 FCA US (formerly 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 represents income for each of our reportable segments and 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 290 new vehicle franchises, which sell 34 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.autonationdrive.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 strategic initiatives and 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, including conditions in the credit markets and changes in interest rates; our ability to maintain and enhance our retail brands and reputation and to attract consumers to our own digital channels; the success and financial viability and the incentive and marketing programs of vehicle manufacturers and distributors with which we hold franchises; natural disasters and other adverse weather events; restrictions imposed by vehicle manufacturers; the resolution of legal and administrative proceedings; regulatory factors affecting our business, including fuel economy requirements; factors affecting our goodwill and other intangible asset impairment testing; 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,
----------------------------
2015 2014
---- ----
Revenue:
New vehicle $2,769.6 $2,428.6
Used vehicle 1,193.2 1,049.7
Parts and service 743.4 671.0
Finance and insurance, net 207.6 172.4
Other 30.4 41.8
Total revenue 4,944.2 4,363.5
------- -------
Cost of sales:
New vehicle 2,608.1 2,282.7
Used vehicle 1,089.5 955.4
Parts and service 423.4 384.3
Other 23.3 33.7
Total cost of sales 4,144.3 3,656.1
------- -------
Gross profit 799.9 707.4
Selling, general, and administrative expenses 557.6 500.7
Depreciation and amortization 28.7 25.6
Other income, net (1.3) (8.0)
---- ----
Operating income 214.9 189.1
Non-operating income (expense) items:
Floorplan interest expense (13.2) (13.2)
Other interest expense (21.4) (21.6)
Interest income 0.1 -
Other income, net 1.1 1.5
Income from continuing operations before income taxes 181.5 155.8
Income tax provision 69.8 60.3
---- ----
Net income from continuing operations 111.7 95.5
Loss from discontinued operations, net of income taxes (0.2) (0.4)
---- ----
Net income $111.5 $95.1
====== =====
Diluted earnings (loss) per share*:
Continuing operations $0.97 $0.79
Discontinued operations $ - $ -
Net income $0.97 $0.78
Weighted average common shares outstanding 115.1 121.3
Common shares outstanding, net of treasury stock, at period end 113.9 119.4
* Earnings per share amounts are calculated discretely and therefore may not add up to the total.
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended March 31,
-------------------- ----------------------------
2015 2014 $ Variance % Variance
---- ---- ---------- ----------
Revenue:
New vehicle $2,769.6 $2,428.6 $341.0 14.0
Retail used vehicle 1,094.1 945.8 148.3 15.7
Wholesale 99.1 103.9 (4.8) (4.6)
---- ----- ----
Used vehicle 1,193.2 1,049.7 143.5 13.7
Finance and insurance, net 207.6 172.4 35.2 20.4
Total variable operations 4,170.4 3,650.7 519.7 14.2
Parts and service 743.4 671.0 72.4 10.8
Other 30.4 41.8 (11.4)
Total revenue $4,944.2 $4,363.5 $580.7 13.3
======== ======== ======
Gross profit:
New vehicle $161.5 $145.9 $15.6 10.7
Retail used vehicle 102.5 92.8 9.7 10.5
Wholesale 1.2 1.5 (0.3)
Used vehicle 103.7 94.3 9.4 10.0
Finance and insurance 207.6 172.4 35.2 20.4
Total variable operations 472.8 412.6 60.2 14.6
Parts and service 320.0 286.7 33.3 11.6
Other 7.1 8.1 (1.0)
Total gross profit 799.9 707.4 92.5 13.1
Selling, general, and administrative expenses 557.6 500.7 (56.9) (11.4)
Depreciation and amortization 28.7 25.6 (3.1)
Other income, net (1.3) (8.0) (6.7)
---- ---- ----
Operating income 214.9 189.1 25.8 13.6
Non-operating income (expense) items:
Floorplan interest expense (13.2) (13.2) -
Other interest expense (21.4) (21.6) 0.2
Interest income 0.1 - 0.1
Other income, net 1.1 1.5 (0.4)
----
Income from continuing operations before income taxes $181.5 $155.8 $25.7 16.5
====== ====== =====
Retail vehicle unit sales:
New 78,560 71,223 7,337 10.3
Used 58,624 52,136 6,488 12.4
-----
137,184 123,359 13,825 11.2
======= ======= ======
Revenue per vehicle retailed:
New $35,255 $34,099 $1,156 3.4
Used $18,663 $18,141 $522 2.9
Gross profit per vehicle retailed:
New $2,056 $2,048 $8 0.4
Used $1,748 $1,780 $(32) (1.8)
Finance and insurance $1,513 $1,398 $115 8.2
Total variable operations(1) $3,438 $3,333 $105 3.2
Operating Percentages Three Months Ended March 31,
--------------------- ----------------------------
2015 (%) 2014 (%)
------- -------
Revenue mix percentages:
New vehicle 56.0 55.7
Used vehicle 24.1 24.1
Parts and service 15.0 15.4
Finance and insurance, net 4.2 4.0
Other 0.7 0.8
100.0 100.0
===== =====
Gross profit mix percentages:
New vehicle 20.2 20.6
Used vehicle 13.0 13.3
Parts and service 40.0 40.5
Finance and insurance 26.0 24.4
Other 0.8 1.2
100.0 100.0
===== =====
Operating items as a percentage of revenue:
Gross profit:
New vehicle 5.8 6.0
Used vehicle - retail 9.4 9.8
Parts and service 43.0 42.7
Total 16.2 16.2
Selling, general, and administrative expenses 11.3 11.5
Operating income 4.3 4.3
Operating items as a percentage of total gross profit:
Selling, general, and administrative expenses 69.7 70.8
Operating income 26.9 26.7
(1) Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle,
retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales.
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions)
Segment Operating Highlights Three Months Ended March 31,
---------------------------- ----------------------------
2015 2014 $ Variance % Variance
---- ---- ---------- ----------
Revenue:
Domestic $1,665.7 $1,473.0 $192.7 13.1
Import 1,678.7 1,549.4 129.3 8.3
Premium luxury 1,563.2 1,306.4 256.8 19.7
Total 4,907.6 4,328.8 578.8 13.4
Corporate and other 36.6 34.7 1.9 5.5
Total consolidated revenue $4,944.2 $4,363.5 $580.7 13.3
Segment income*:
Domestic $79.3 $63.8 $15.5 24.3
Import 75.0 65.4 9.6 14.7
Premium luxury 94.1 83.3 10.8 13.0
Total 248.4 212.5 35.9 16.9
Corporate and other (46.7) (36.6) (10.1)
Add: Floorplan interest expense 13.2 13.2 -
Operating income $214.9 $189.1 $25.8 13.6
====== ====== =====
* Segment income represents income for each of our reportable segments and is defined as operating income less floorplan interest expense.
Retail new vehicle unit sales:
Domestic 25,750 23,815 1,935 8.1
Import 36,914 34,925 1,989 5.7
Premium luxury 15,896 12,483 3,413 27.3
78,560 71,223 7,337 10.3
====== ====== =====
Brand Mix - New Vehicle Retail Units Sold
-----------------------------------------
Three Months Ended March 31,
----------------------------
2015 (%) 2014 (%)
------- -------
Domestic:
Ford, Lincoln 16.5 17.7
Chevrolet, Buick, Cadillac, GMC 9.8 10.0
Chrysler, Jeep, Dodge 6.5 5.7
Domestic total 32.8 33.4
Import:
Honda 10.9 11.4
Toyota 18.7 19.0
Nissan 10.1 11.6
Other imports 7.3 7.1
Import total 47.0 49.1
Premium Luxury:
Mercedes-Benz 8.1 7.5
BMW 4.9 4.6
Lexus 3.2 2.6
Audi 1.9 1.0
Other premium luxury (Land Rover, Porsche) 2.1 1.8
Premium Luxury total 20.2 17.5
100.0 100.0
===== =====
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions)
Capital Expenditures / Stock Repurchases Three Months Ended March 31,
---------------------------------------- ----------------------------
2015 2014
---- ----
Capital expenditures (1) $62.9 $34.9
Cash paid for acquisitions (2) $27.7 $ -
Proceeds from exercises of stock options $12.4 $15.3
Stock repurchases:
Aggregate purchase price $9.1 $115.7
Shares repurchased (in millions) 0.2 2.4
Floorplan Assistance and Expense Three Months Ended March 31,
-------------------------------- ----------------------------
2015 2014 Variance
---- ---- --------
Floorplan assistance earned (included in cost
of sales) $26.7 $24.0 $2.7
New vehicle floorplan interest expense (12.5) (12.7) 0.2
Net new vehicle inventory carrying benefit $14.2 $11.3 $2.9
===== ===== ====
Balance Sheet and Other Highlights
----------------------------------
March 31, 2015 December 31, 2014 March 31, 2014
-------------- ----------------- --------------
Cash and cash equivalents $74.1 $75.4 $69.2
Inventory $2,928.4 $2,899.0 $2,712.0
Total floorplan notes payable $3,002.4 $3,097.2 $2,844.2
Non-vehicle debt $2,055.7 $2,128.4 $1,803.9
Equity $2,205.6 $2,072.1 $2,068.9
New days supply (industry standard of selling
days) 52 days 54 days 61 days
Used days supply (trailing calendar month
days) 34 days 38 days 31 days
Key Credit Agreement Covenant Compliance Calculations
-----------------------------------------------------
Ratio of funded indebtedness/
Adjusted EBITDA 2.15x
Covenant less than or
equal to 3.75x
-------- ------------- -----
Ratio of funded indebtedness including floorplan/
Total capitalization including floorplan 57.5%
Covenant less than or
equal to 70.0%
-------- ------------- ----
(1) Includes accrued construction in progress and excludes property acquired
under capital leases
(2) Excludes capital leases
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Comparable Basis Reconciliations*
--------------------------------
Three Months Ended March 31,
----------------------------
Net Income Diluted Earnings Per Share**
---------- ---------------------------
2015 2014 2015 2014
---- ---- ---- ----
As reported $111.5 $95.1 $0.97 $0.78
Discontinued operations, net of income taxes 0.2 0.4 $ - $ -
From continuing operations, as reported 111.7 95.5 $0.97 $0.79
Net gain related to business/property dispositions - (5.0) $ - $(0.04)
Adjusted $111.7 $90.5 $0.97 $0.75
====== =====
* Please refer to the "Non-GAAP Financial Measures" section of the Press Release.
** Diluted earnings per share amounts are calculated discretely and therefore may not add up to the total.
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended March 31,
-------------------- ----------------------------
2015 2014 $ Variance % Variance
---- ---- ---------- ----------
Revenue:
New vehicle $2,692.1 $2,414.9 $277.2 11.5
Retail used vehicle 1,060.7 939.6 121.1 12.9
Wholesale 97.3 103.6 (6.3) (6.1)
Used vehicle 1,158.0 1,043.2 114.8 11.0
Finance and insurance, net 203.4 171.4 32.0 18.7
Total variable operations 4,053.5 3,629.5 424.0 11.7
Parts and service 722.7 666.3 56.4 8.5
Other 30.4 40.8 (10.4)
Total revenue $4,806.6 $4,336.6 $470.0 10.8
======== ======== ======
Gross profit:
New vehicle $154.2 $145.1 $9.1 6.3
Retail used vehicle 99.7 92.0 7.7 8.4
Wholesale 1.2 1.5 (0.3)
Used vehicle 100.9 93.5 7.4 7.9
Finance and insurance 203.4 171.4 32.0 18.7
Total variable operations 458.5 410.0 48.5 11.8
Parts and service 310.1 284.6 25.5 9.0
Other 6.8 7.9 (1.1)
Total gross profit $775.4 $702.5 $72.9 10.4
====== ====== =====
Retail vehicle unit sales:
New 76,919 70,676 6,243 8.8
Used 57,353 51,674 5,679 11.0
-----
134,272 122,350 11,922 9.7
======= ======= ======
Revenue per vehicle retailed:
New $34,999 $34,169 $830 2.4
Used $18,494 $18,183 $311 1.7
Gross profit per vehicle retailed:
New $2,005 $2,053 $(48) (2.3)
Used $1,738 $1,780 $(42) (2.4)
Finance and insurance $1,515 $1,401 $114 8.1
Total variable operations(1) $3,406 $3,339 $67 2.0
Operating Percentages Three Months Ended March 31,
--------------------- ----------------------------
2015 (%) 2014 (%)
------- -------
Revenue mix percentages:
New vehicle 56.0 55.7
Used vehicle 24.1 24.1
Parts and service 15.0 15.4
Finance and insurance, net 4.2 4.0
Other 0.7 0.8
100.0 100.0
===== =====
Gross profit mix percentages:
New vehicle 19.9 20.7
Used vehicle 13.0 13.3
Parts and service 40.0 40.5
Finance and insurance 26.2 24.4
Other 0.9 1.1
100.0 100.0
===== =====
Operating items as a percentage of revenue:
Gross profit:
New vehicle 5.7 6.0
Used vehicle - retail 9.4 9.8
Parts and service 42.9 42.7
Total 16.1 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.
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SOURCE AutoNation, Inc.
