Group 1 Automotive, Inc. : Group 1 Automotive Reports Record Fourth-Quarter and Best-Ever Full-Year Financial Results; Full-Year Revenues Increase to $6.1 Billion
02/09/2012| 07:00am US/Eastern
Recommend:
HOUSTON, Feb. 9, 2012 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today reported record fourth-quarter adjusted net income of $22.0 million, a 49.3 percent increase from the prior-year period, and adjusted diluted earnings per common share of $0.94 for the period ended Dec. 31, 2011. As shown in the attached reconciliation table, the company recognized $1.1 million net after-tax adjustments for non-cash asset impairment charges and an accrual for a pending legal matter in the quarter ended Dec. 31, 2011. Before adjusting for these items, reported net income was $20.9 million, and diluted earnings per common share were $0.90.
Full-year 2011 adjusted net income increased 38.3 percent, to a record $86.0 million. Adjusted diluted earnings per common share were $3.62, making this the best full-year results in the company's history.
Fourth-Quarter 2011 Highlights
-- Total revenues increased 13.1 percent to $1.6 billion, and gross profit
grew 13.3 percent to $245.9 million from the prior-year period.
-- New vehicle gross profit grew 23.6 percent on 13.5 percent higher
revenues, as unit sales were 8.1 percent higher and the average selling
price increased to $34,448.
-- Retail used vehicle gross profit grew 14.0 percent on 16.8 percent
higher revenues, as the average selling price increased 3.7 percent, to
$20,417, and the company retailed 12.7 percent more units.
-- Parts and service revenues increased 7.0 percent, reflecting increases
in customer-pay, wholesale parts and collision businesses.
-- Finance and insurance gross profit per retail unit of $1,183 set another
all-time record high for any quarter.
-- Selling, general and administrative (SG&A) expenses as a percent of
gross profit (adjusted) improved 260 basis points on a comparable basis,
to 76.1 percent, from the prior-year period.
-- Same-store operating margin (adjusted) improved to 3.2 percent, as
higher gross profit outpaced expenses.
Full-Year 2011 Results
-- Total revenues increased 10.4 percent to $6.1 billion, and gross profit
grew 9.5 percent, representing increases in all operating segments from
the prior year.
-- Finance and insurance revenues increased 16.0 percent on 5.5 percent
more retail unit sales; gross profit per unit of $1,135 was an all-time
record.
-- Same-store new vehicle gross profit grew 15.0 percent on 6.4 percent
higher revenues.
-- Same-store used vehicle gross profit was 5.6 percent higher on an 8.6
percent revenue increase.
-- Same-store parts and service revenues grew 2.5 percent.
-- Same-store SG&A expenses as a percent of gross profit (adjusted)
improved 180 basis points on a comparable basis, to 76.2 percent.
"I am proud of the record fourth-quarter and full-year results that Group 1 reported today," said Earl J. Hesterberg, Group 1's president and chief executive officer, "especially given the supply challenges we faced with most of our Japanese brand stores for the majority of the year and in a sales environment that was about 25 percent lower than our previous record year in 2006. The strong results reflect the strength of our operating team as well as the significant improvements we have made to our operating model during the past several years. These improvements should continue to deliver operating leverage as new vehicle sales increase to a more normalized 15 million to 16 million unit selling environment in the next few years. Looking ahead, we anticipate new vehicle industry sales will increase by more than one million, to 14 million, units in 2012."
Corporate Development Recap
During the fourth quarter, Group 1 added six franchises to its portfolio including Lincoln, Cadillac, Buick, GMC and two Volkswagen franchises that are expected to add $218.0 million in annual revenues.
For the full year 2011, Group 1 added 14 franchises with total estimated annual revenues of $563.0 million and disposed of two franchises with trailing-12-month revenues of $4.1 million in 2011.
Thus far in 2012, Group 1 has acquired Volkswagen and BMW franchises with estimated aggregate annual revenues of $93.4 million.
Fourth-Quarter Earnings Conference Call
Group 1's senior management will host a conference call today at 10 a.m. ET to discuss the fourth-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/news/events.aspx. 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: 1.877.317.6789
International: 1.412.317.6789
Conference ID: 10008954
Domestic: 1.877.344.7529
International: 1.412.317.0088
Conference ID: 10008954
A telephonic replay will be available following the call through Feb. 17 at 9 a.m. ET by dialing:
About Group 1 Automotive, Inc.
Group 1 owns and operates 111 automotive dealerships, 143 franchises, and 28 collision 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 vehicle financing, 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 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:
Kim Paper Canning
Manager, Investor Relations
Group 1 Automotive Inc.
713-647-5741 | kpaper@group1auto.com
Media contacts:
Pete DeLongchamps
V.P. Financial Services and Manufacturer Relations
Group 1 Automotive Inc.
713-647-5770 | pdelongchamps@group1auto.com
or
Clint Woods
Pierpont 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 December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2011 2010 % Change 2011 2010 % Change
---- ---- -------- ---- ---- --------
REVENUES:
New vehicle
retail sales $945,392 $832,714 13.5 $3,402,647 $3,086,807 10.2
Used vehicle
retail sales 362,911 310,663 16.8 1,416,520 1,271,039 11.4
Used vehicle
wholesale sales 59,434 58,877 0.9 251,043 215,530 16.5
Parts and
service 204,711 191,242 7.0 813,819 767,004 6.1
Finance and
insurance 53,481 44,256 20.8 195,736 168,789 16.0
------ ------ ---- ------- ------- ----
Total revenues 1,625,929 1,437,752 13.1 6,079,765 5,509,169 10.4
COST OF SALES:
New vehicle
retail sales 888,252 786,479 12.9 3,192,309 2,909,012 9.7
Used vehicle
retail sales 333,902 285,212 17.1 1,291,996 1,156,035 11.8
Used vehicle
wholesale sales 59,312 59,268 0.1 246,963 212,833 16.0
Parts and
service 98,602 89,772 9.8 387,897 354,256 9.5
------ ------ --- ------- ------- ---
Total cost of
sales 1,380,068 1,220,731 13.1 5,119,165 4,632,136 10.5
GROSS PROFIT 245,861 217,021 13.3 960,600 877,033 9.5
SELLING, GENERAL
AND
ADMINISTRATIVE
EXPENSES 188,109 170,839 10.1 735,229 693,635 6.0
DEPRECIATION AND
AMORTIZATION
EXPENSE 7,182 6,519 10.2 27,063 26,455 2.3
ASSET
IMPAIRMENTS 797 7,719 (89.7) 4,805 10,840 (55.7)
OPERATING INCOME 49,773 31,944 55.8 193,503 146,103 32.4
OTHER EXPENSE:
Floorplan
interest
expense (7,442) (8,890) (16.3) (27,687) (34,110) (18.8)
Other interest
expense, net (8,911) (6,952) 28.2 (33,722) (27,217) 23.9
Loss on
redemption of
long-term debt - - - - (3,872) (100.0)
INCOME BEFORE
INCOME TAXES 33,420 16,102 107.6 132,094 80,904 63.3
PROVISION FOR
INCOME TAXES (12,565) (5,533) 127.1 (49,700) (30,600) 62.4
NET INCOME $20,855 $10,569 97.3 $82,394 $50,304 63.8
======= ======= ==== ======= ======= ====
DILUTED INCOME
PER COMMON
SHARE $0.90 $0.45 101.0 $3.47 $2.09 65.8
Weighted average
dilutive common
shares
outstanding 22,040 22,467 (1.9) 22,409 22,788 (1.7)
Weighted average
participating
securities 1,276 1,284 (0.6) 1,377 1,284 7.3
----- ----- ---- ----- ----- ---
Total weighted
average shares
outstanding 23,316 23,751 (1.8) 23,786 24,072 (1.2)
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
December 31, December 31,
%
2011 2010 Change
---- ---- -------
ASSETS: (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $14,895 $19,843 (24.9)
Contracts in transit and
vehicle receivables, net 167,507 113,846 47.1
Accounts and notes
receivable, net 92,775 75,623 22.7
Inventories 867,470 777,771 11.5
Deferred income taxes 16,012 14,819 8.1
Prepaid expenses and other
current assets 16,925 17,332 (2.3)
------
Total current assets 1,175,584 1,019,234 15.3
PROPERTY AND EQUIPMENT, net 585,633 506,288 15.7
GOODWILL AND INTANGIBLE FRANCHISE
RIGHTS 702,145 666,656 5.3
OTHER ASSETS 12,981 9,786 32.6
------ ----- ----
Total assets $2,476,343 $2,201,964 12.5
========== ========== ====
LIABILITIES AND STOCKHOLDERS'
EQUITY:
CURRENT LIABILITIES:
Floorplan notes payable -
credit facility $718,945 $690,051 4.2
Offset account related to
floorplan notes payable
-credit facility (109,207) (129,211) (15.5)
Floorplan notes payable -
manufacturer affiliates 155,980 103,345 50.9
Current maturities of long-
term debt 14,663 53,189 (72.4)
Current liabilities from
interest rate risk
management activities 7,273 1,098 562.4
Accounts payable 148,048 92,799 59.5
Accrued expenses 109,245 83,663 30.6
-------
Total current liabilities 1,044,947 894,934 16.8
2.25% CONVERTIBLE SENIOR NOTES
(aggregate principal of
$182,753 at December 31, 2011 and December 31, 2010) 144,985 138,155 4.9
3.00% CONVERTIBLE SENIOR NOTES
(aggregate principal of
$115,000 at December 31, 2011 and December 31, 2010) 77,401 74,365 4.1
MORTGAGE FACILITY, net of current
maturities 38,873 - 100.0
OTHER REAL ESTATE RELATED AND
LONG-TERM DEBT,
net of current maturities 184,237 161,611 14.0
CAPITAL LEASE OBLIGATIONS RELATED
TO REAL ESTATE,
net of current maturities 37,105 38,819 (4.4)
DEFERRED INCOME TAXES 78,459 58,970 33.0
LIABILITIES FROM INTEREST RATE
RISK MANAGEMENT ACTIVITIES 26,766 16,426 62.9
OTHER LIABILITIES 36,470 34,316 6.3
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock 260 261 (0.4)
Additional paid-in capital 363,375 363,966 (0.2)
Retained earnings 591,037 519,843 13.7
Accumulated other
comprehensive loss (29,236) (18,755) 55.9
Treasury stock (118,336) (80,947) 46.2
---------
Total stockholders'
equity 807,100 784,368 2.9
------- ------- ---
Total liabilities and
stockholders' equity $2,476,343 $2,201,964 12.5
========== ========== ====
Group 1 Automotive, Inc.
Consolidated Statements of Adjusted Cash Flows from Operating
Activities
(Unaudited)
(In thousands)
Three Months Ended December Twelve Months Ended December
31, 31,
---------------------------- -----------------------------
2011 2010 % Change 2011 2010 % Change
---- ---- -------- ---- ---- --------
Net
income $20,855 $10,569 97.3 $82,394 $50,304 63.8
Adjustments
to
reconcile
net
income
to
net
cash
provided
by
operating
activities:
Asset
impairments 797 7,719 (89.7) 4,805 10,840 (55.7)
Depreciation
and
amortization 7,182 6,519 10.2 27,063 26,455 2.3
Deferred
income
taxes 8,544 1,050 713.7 24,824 23,274 6.7
Loss
on
redemption
of
long-
term
debt - - - - 3,872 (100.0)
(Gain)
loss
on
disposition
of
assets
and
franchise 6 (2,322) 100.3 (961) 848 (213.3)
Stock-
based
compensation 2,586 2,437 6.1 10,919 9,942 9.8
Amortization
of
debt
discount
and
issue
costs 3,119 3,986 (21.8) 11,990 10,322 16.2
Other 292 (30) 1,073.3 277 824 (66.4)
Changes
in
operating
assets
and
liabilities,
net
of
effects
of
acquisitions
and
dispositions:
Accounts
payable
and
accrued
expenses 37,305 6,506 473.4 77,027 16,130 377.5
Accounts
and
notes
receivable (21,783) (9,097) 139.5 (17,875) (13,844) 29.1
Inventories (119,114) (21,302) 459.2 (7,410) (174,249) (95.7)
Contracts-
in-
transit
and
vehicle
receivables (67,346) (21,330) 215.7 (53,821) (27,218) 97.7
Prepaid
expenses
and
other
assets (7,792) (138) 5,546.4 (11,246) 6,922 (262.5)
Floorplan
notes
payable
-
credit
facility
(1) 143,307 33,350 329.7 (13,350) 193,430 (106.9)
Floorplan
notes
payable
-
manufacturer
affiliates
(2) 26,595 (299) 8,994.6 19,045 (12,790) 248.9
Deferred
revenues (182) (549) (66.8) (1,427) (2,308) (38.2)
---- ---- ----- ------ ------ -----
Adjusted
net
cash
provided
by
operating
activities $34,371 $17,069 101.4 $152,254 $122,754 24.0
------- ------- ----- -------- -------- ----
Excludes net acquisition/(disposition) related activity of $41,860 for the twelve months ended
(1) December 31, 2011, and $4,729 for the twelve months ended December 31, 2010.
Excludes net acquisition/(disposition) related activity of $33,712 for the twelve months ended
(2) December 31, 2011, and $2,210 for the twelve months ended December 31, 2010.
Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
(%) (%) (%) (%)
----- ----- ----- -----
NEW
VEHICLE
UNIT
SALES
GEOGRAPHIC
MIX:
Region Geographic Market
------ -----------------
East Massachusetts 10.0 12.2 11.3 14.3
New Jersey 5.3 5.9 5.5 6.3
New York 4.2 3.9 3.8 3.8
Georgia 3.3 3.8 3.4 3.9
New Hampshire 2.8 3.7 3.0 4.0
Louisiana 2.5 3.6 2.8 3.2
Mississippi 2.0 1.7 2.0 1.7
South Carolina 1.7 1.9 1.5 1.3
Alabama 1.3 1.1 1.2 1.2
Maryland 0.8 0.8 0.8 0.8
Florida 0.8 0.7 0.7 1.2
34.7 39.3 36.0 41.7
West Texas 38.6 32.6 36.0 31.2
California 13.7 14.5 13.9 13.7
Oklahoma 8.0 7.4 8.2 7.8
Kansas 0.9 0.9 0.9 0.9
61.2 55.4 59.0 53.6
International United Kingdom 4.1 5.3 5.0 4.7
100.0 100.0 100.0 100.0
NEW
VEHICLE
UNIT
SALES
BRAND
MIX:
Toyota/
Scion/
Lexus 29.8 35.5 30.4 35.5
Nissan/
Infiniti 12.7 12.6 13.7 14.1
BMW/
MINI 12.7 13.3 13.1 11.9
Ford 9.9 7.4 8.9 7.8
Honda/
Acura 9.4 11.6 10.7 12.0
Daimler 6.8 6.3 5.9 5.8
GM 6.4 4.3 5.6 4.0
Chrysler 4.8 3.3 4.5 3.0
Other 7.5 5.7 7.2 5.9
100.0 100.0 100.0 100.0
NEW
VEHICLE
UNIT
SALES
OTHER
MIX:
Import 50.4 55.1 53.2 57.5
Luxury 29.4 30.1 28.1 27.8
Domestic 20.2 14.8 18.7 14.7
100.0 100.0 100.0 100.0
Car 51.4 56.4 54.1 58.2
Truck 48.6 43.6 45.9 41.8
100.0 100.0 100.0 100.0
Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
(Dollars in thousands, except per unit amounts)
Twelve Months Ended December
Three Months Ended December 31, 31,
------------------------------- -----------------------------
2011 2010 % Change 2011 2010 % Change
---- ---- -------- ---- ---- --------
REVENUES:
New vehicle
retail sales $945,392 $832,714 13.5 $3,402,647 $3,086,807 10.2
Used vehicle
retail sales 362,911 310,663 16.8 1,416,520 1,271,039 11.4
Used vehicle
wholesale sales 59,434 58,877 0.9 251,043 215,530 16.5
------ ------ ------- -------
Total used 422,345 369,540 14.3 1,667,563 1,486,569 12.2
Parts and
service 204,711 191,242 7.0 813,819 767,004 6.1
Finance and
insurance 53,481 44,256 20.8 195,736 168,789 16.0
------ ------ ------- -------
Total $1,625,929 $1,437,752 13.1 $6,079,765 $5,509,169 10.4
GROSS MARGIN %:
New vehicle
retail sales 6.0 5.6 6.2 5.8
Used vehicle
retail sales 8.0 8.2 8.8 9.0
Used vehicle
wholesale sales 0.2 (0.7) 1.6 1.3
Total used 6.9 6.8 7.7 7.9
Parts and
service 51.8 53.1 52.3 53.8
Finance and
insurance 100.0 100.0 100.0 100.0
Total 15.1 15.1 15.8 15.9
GROSS PROFIT:
New vehicle
retail sales $57,140 $46,235 23.6 $210,338 $177,795 18.3
Used vehicle
retail sales 29,009 25,451 14.0 124,524 115,004 8.3
Used vehicle
wholesale sales 122 (391) 131.2 4,080 2,697 51.3
--- ---- ----- -----
Total used 29,131 25,060 16.2 128,604 117,701 9.3
Parts and
service 106,109 101,470 4.6 425,922 412,748 3.2
Finance and
insurance 53,481 44,256 20.8 195,736 168,789 16.0
------ ------ ------- -------
Total $245,861 $217,021 13.3 $960,600 $877,033 9.5
UNITS SOLD:
Retail new
vehicles sold 27,444 25,383 8.1 102,022 97,511 4.6
Retail used
vehicles sold 17,775 15,771 12.7 70,475 66,001 6.8
Wholesale used
vehicles sold 8,751 8,808 (0.6) 35,997 33,524 7.4
----- ----- ------ ------
Total used 26,526 24,579 7.9 106,472 99,525 7.0
AVERAGE RETAIL
SALES PRICE:
New vehicle
retail $34,448 $32,806 5.0 $33,352 $31,656 5.4
Used vehicle
retail $20,417 $19,698 3.7 $20,100 $19,258 4.4
GROSS PROFIT PER
UNIT SOLD:
New vehicle
retail sales $2,082 $1,821 14.3 $2,062 $1,823 13.1
Used vehicle
retail sales 1,632 1,614 1.1 1,767 1,742 1.4
Used vehicle
wholesale sales 14 (44) 131.8 113 80 41.3
Total used 1,098 1,020 7.6 1,208 1,183 2.1
Finance and
insurance (per
retail unit) $1,183 $1,075 10.0 $1,135 $1,032 10.0
OTHER (1):
SG&A expenses $187,109 $170,839 9.5 $734,229 $689,320 6.5
SG&A as %
revenues 11.5 11.9 12.1 12.5
SG&A as % gross
profit 76.1 78.7 76.4 78.6
Operating margin
% 3.2 2.8 3.3 2.9
Pretax margin % 2.2 1.7 2.3 1.8
FLOORPLAN
EXPENSE:
Floorplan
interest $(7,442) $(8,890) (16.3) $(27,687) $(34,110) (18.8)
Floorplan
assistance 7,308 6,162 18.6 26,144 23,998 8.9
----- ----- ------ ------
Net floorplan
expense $(134) $(2,728) (95.1) $(1,543) $(10,112) (84.7)
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
(1) Measures for a description of the aforementioned adjustments.
Group 1 Automotive, Inc.
Additional Information - Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2011 2010 % Change 2011 2010 % Change
---- ---- -------- ---- ---- --------
REVENUES:
New vehicle
retail sales $883,288 $830,877 6.3 $3,252,960 $3,056,307 6.4
Used vehicle
retail sales 344,775 309,732 11.3 1,361,006 1,261,856 7.9
Used vehicle
wholesale
sales 55,837 58,443 (4.5) 240,467 212,631 13.1
------ ------ ------- -------
Total used 400,612 368,175 8.8 1,601,473 1,474,487 8.6
Parts and
service 191,754 190,839 0.5 776,005 757,132 2.5
Finance and
insurance 50,346 44,145 14.0 188,105 167,339 12.4
------ ------ ------- -------
Total $1,526,000 $1,434,036 6.4 $5,818,543 $5,455,265 6.7
GROSS MARGIN %:
New vehicle
retail sales 6.1 5.6 6.2 5.8
Used vehicle
retail sales 7.9 8.2 8.8 9.1
Used vehicle
wholesale
sales 0.4 (0.4) 1.8 1.4
Total used 6.9 6.8 7.7 8.0
Parts and
service 52.6 53.0 53.0 53.9
Finance and
insurance 100.0 100.0 100.0 100.0
Total 15.2 15.1 15.9 15.9
GROSS PROFIT:
New vehicle
retail sales $53,923 $46,226 16.7 $202,615 $176,202 15.0
Used vehicle
retail sales 27,313 25,390 7.6 119,568 114,305 4.6
Used vehicle
wholesale
sales 205 (229) 189.5 4,301 2,982 44.2
--- ---- ----- -----
Total used 27,518 25,161 9.4 123,869 117,287 5.6
Parts and
service 100,850 101,237 (0.4) 411,281 407,993 0.8
Finance and
insurance 50,346 44,145 14.0 188,105 167,339 12.4
------ ------ ------- -------
Total $232,637 $216,769 7.3 $925,870 $868,821 6.6
UNITS SOLD:
Retail new
vehicles sold 25,688 25,329 1.4 97,495 96,629 0.9
Retail used
vehicles sold 16,838 15,718 7.1 67,647 65,417 3.4
Wholesale used
vehicles sold 8,185 8,761 (6.6) 34,395 33,176 3.7
----- ----- ------ ------
Total used 25,023 24,479 2.2 102,042 98,593 3.5
AVERAGE RETAIL
SALES PRICE:
New vehicle
retail $34,385 $32,803 4.8 $33,365 $31,629 5.5
Used vehicle
retail $20,476 $19,706 3.9 $20,119 $19,289 4.3
GROSS PROFIT
PER UNIT SOLD:
New vehicle
retail sales $2,099 $1,825 15.0 $2,078 $1,823 14.0
Used vehicle
retail sales 1,622 1,615 0.4 1,768 1,747 1.2
Used vehicle
wholesale
sales 25 (26) 196.2 125 90 38.9
Total used 1,100 1,028 7.0 1,214 1,190 2.0
Finance and
insurance (per
retail unit) $1,184 $1,075 10.1 $1,139 $1,033 10.3
OTHER (2):
SG&A expenses $176,588 $169,978 3.9 $705,558 $677,843 4.1
SG&A as %
revenues 11.6 11.9 12.1 12.4
SG&A as % gross
profit 75.9 78.4 76.2 78.0
Operating
margin % 3.2 2.8 3.3 3.0
FLOORPLAN
EXPENSE:
Floorplan
interest $(6,917) $(8,873) (22.0) $(26,493) $(33,756) (21.5)
Floorplan
assistance 6,676 6,129 8.9 24,968 23,663 5.5
----- ----- ------ ------
Net floorplan
expense $(241) $(2,744) (91.2) $(1,525) $(10,093) (84.9)
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
(1) the activities of our corporate office.
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
(2) description of the aforementioned adjustments.
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended December Twelve Months Ended
31, December 31,
---------------------------- --------------------
NET INCOME % %
RECONCILIATION: 2011 2010 Change 2011 2010 Change
---- ---- ------- ---- ---- -------
As reported $20,855 $10,569 97.3 $82,394 $50,304 63.8
After-tax adjustments:
Non-cash asset
impairment charges (2) 461 4,947 2,994 6,930
Loss on dealership
dispositions (3) - - - 3,698
Loss on debt redemption
(4) - - - 2,458
Severance costs related
to UK-dealership
acquisitions (5) - - - 405
Income tax benefit
related to discrete
items (6) - (810) - (810)
Gain on sale of real
estate (7) - - - (761)
Accrual for pending
legal matter (11) 641 - 641 -
--- --- --- ---
Adjusted net income (1) $21,957 $14,706 49.3 $86,029 $62,224 38.3
ADJUSTED NET INCOME
ATTRIBUTABLE TO
DILUTED
COMMON SHARES
RECONCILIATION:
Adjusted net income $21,957 $14,706 49.3 $86,029 $62,224 38.3
Less: Adjusted earnings
allocated to
participating
securities 1,182 785 4,931 3,309
----- --- ----- -----
Adjusted net income
available to diluted
common shares $20,775 $13,921 49.2 $81,098 $58,915 37.7
DILUTED INCOME PER
COMMON SHARE
RECONCILIATION:
As reported $0.90 $0.45 100.0 $3.47 $2.09 66.0
After-tax adjustments:
Non-cash asset
impairment charges 0.02 0.21 0.13 0.29
Loss on dealership
dispositions - - - 0.15
Loss on debt redemption - - - 0.10
Severance costs related
to UK-dealership
acquisitions - - - 0.02
Income tax benefit
related to discrete
items - (0.04) - (0.03)
Gain on sale of real
estate - - - (0.03)
Accrual for pending
legal matter 0.02 - 0.02 -
---- --- ---- ---
Adjusted diluted income
per share (1) $0.94 $0.62 51.6 $3.62 $2.59 39.8
SG&A RECONCILIATION:
As reported $188,109 $170,839 10.1 $735,229 $693,635 6.0
Pre-tax adjustments:
Loss on dealership
dispositions - - - (5,053)
Severance costs related
to UK-dealership
acquisitions - - - (562)
Gain on sale of real
estate - - - 1,300
Accrual for pending
legal matter (1,000) - (1,000) -
------ --- ------ ---
Adjusted SG&A (1) $187,109 $170,839 9.5 $734,229 $689,320 6.5
SG&A AS % REVENUES:
Unadjusted 11.6 11.9 12.1 12.6
Adjusted (1) 11.5 11.9 12.1 12.5
SG&A AS % OF GROSS
PROFIT:
Unadjusted 76.5 78.7 76.5 79.1
Adjusted (1) 76.1 78.7 76.4 78.6
OPERATING MARGIN %:
Unadjusted 3.1 2.2 3.2 2.7
Adjusted (1), (8) 3.2 2.8 3.3 2.9
PRETAX MARGIN %:
Unadjusted 2.1 1.1 2.2 1.5
Adjusted (1), (9) 2.2 1.7 2.3 1.8
SAME STORE SG&A
RECONCILIATION:
As reported $177,588 $169,978 4.5 $706,558 $678,405 4.1
Pre-tax adjustments:
Severance costs related
to UK-dealership
acquisitions - - - (562)
Accrual for pending
legal matter (1,000) - (1,000) -
------ --- ------ ---
Adjusted Same Store
SG&A (1) $176,588 $169,978 3.9 $705,558 $677,843 4.1
SAME STORE SG&A AS %
REVENUES:
Unadjusted 11.6 11.9 12.1 12.4
Adjusted (1) 11.6 11.9 12.1 12.4
SAME STORE SG&A AS % OF
GROSS PROFIT:
Unadjusted 76.3 78.4 76.3 78.1
Adjusted (1) 75.9 78.4 76.2 78.0
SAME STORE OPERATING
MARGIN %:
Unadjusted 3.1 2.5 3.2 2.9
Adjusted (1), (10) 3.2 2.8 3.3 3.0
Three Months Ended December Twelve Months Ended
31, December 31,
---------------------------- --------------------
CASH FLOWS FROM % %
OPERATING ACTIVITIES 2011 2010 Change 2011 2010 Change
---- ---- ------- ---- ---- -------
RECONCILIATION:
Net cash provided by
(used in) operating
activities $(101,802) $(16,281) 525.3 $199,316 $(68,466) 391.1
Change in floorplan
notes payable-credit
facility, 143,307 33,350 (13,350) 193,430
excluding floorplan
offset account and net
acquisition and
disposition related
activity
Change in floorplan
notes payable-
manufacturer (7,134) - (33,712) (2,210)
affiliates associated
with net acquisition
and ------ --- ------- ------
disposition related
activity
Adjusted net cash
provided by operating $34,371 $17,069 101.4 $152,254 $122,754 24.0
activities (1)
We believe that these adjusted financial measures are relevant and useful to investors because they provide
additional information regarding the performance of our operations and improve period-to-period
comparability. These measures are not measures of financial performance under GAAP. Accordingly, they should
not be considered as substitutes for their unadjusted counterparts, which are prepared in accordance with GAAP.
Although we find these non-GAAP results useful in evaluating the performance of our business, our reliance on
these measures is limited because the adjustments often have a material impact on our financial statements
calculated in accordance with GAAP. Therefore, we typically use these adjusted numbers in conjunction with our
(1) GAAP results to address these limitations.
Adjustments are net of tax benefit of $336 and $1,811 for the three and twelve months ended December 31, 2011,
respectively, and $2,772 and $3,910 for the three and twelve months ended December 31, 2010 and are calculated
(2) utilizing the applicable federal and state tax rates for the adjustment.
Adjustment is net of tax benefit of $1,355 for the twelve months ended December 31, 2010, and is calculated
(3) utilizing the applicable federal and state tax rates for the adjustment.
Adjustment is net of tax benefit of $1,414 for the twelve months ended December 31, 2010, and is calculated
(4) utilizing the applicable federal and state tax rates for the adjustment.
Adjustment is net of a tax benefit of $157 for the twelve months ended December 31, 2010, and is calculated
(5) utilizing the applicable UK corporate tax rate for the adjustment.
The $0.8 million income tax benefit for the three and twelve months ended December 31, 2010 relates to the tax
(6) deductibility of goodwill written off in conjunction with the termination of a franchise.
Adjustment is net of a tax provision of $539 for the twelve months ended December 31, 2010, and is calculated
(7) utilizing the applicable federal and state tax rates for the adjustment.
(8) Excludes the impact of non-cash asset impairment charges.
Excludes the impact of non-cash asset impairment charges, loss on dealership dispositions, loss on debt
redemption, severance costs related to UK-dealership acquisitions, gain on sale of real estate and accrual for
(9) pending legal matter.
Excludes the impact of Same Store non-cash asset impairment charges of $341 and $4,038 and accrual for pending
legal matter of $1,000 for the three and twelve months ended December 31, 2011, respectively, and $4,823 and
$6,725 for the three and twelve months ended December 31, 2010. Adjusted Same Store operating income was
$49,126 and $194,124 for the three and twelve months ended December 31, 2011, respectively, and $40,331 and
(10) $164,744 for the three and twelve months ended December 31, 2010.
Adjustment is net of tax benefit of $359 for the three and twelve months ended December 31, 2011, and is
(11) calculated utilizing the applicable federal and state tax rates for the adjustment.
SOURCE Group 1 Automotive, Inc.
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