PENSKE AUTOMOTIVE GROUP, INC. BLOOMFIELD HILLS, Mich., Oct. 29, 2014 /PRNewswire/ --
Third Quarter 2014 Nine Months 2014
------------------ ----------------
· Revenue Increases 17.5% to · Revenue Increases 19.9% to
$4.4 Billion $12.9 Billion
· Same-store Retail Revenue · Same-store Retail Revenue
Increases 11.2% Increases 12.8%
· Income from Continuing · Income from Continuing
Operations Increases 15.6% to Operations Increases 19.5% to
$76.4 Million $222.8 Million
· Earnings Per Share from · Earnings Per Share from
Continuing Operations Continuing Operations
Increases 16.4% to $0.85 Increases 19.4% to $2.46
· EBITDA Increases 17.6% to · EBITDA Increases 18.9% to
$147.3 Million $430.5 Million
----------------------------- -----------------------------
Penske Automotive Group, Inc. (NYSE: PAG), an international transportation services company, announced today the highest third quarter and nine-months income from continuing operations and earnings per share in the history of the company. For the third quarter of 2014, when compared to the same period last year, income from continuing operations attributable to common shareholders increased 15.6% to $76.4 million and related earnings per share increased 16.4% to $0.85 per share.
Total revenue increased 17.5% to $4.4 billion. The revenue increase was driven by a 10.2% increase in total retail unit sales, including a 5.3% increase on a same-store basis. Gross profit improved 15.3% to $658.7 million while operating income increased 17.1% to $128.0 million.
Commenting on the company's record results, Penske Automotive Group Chairman Roger S. Penske said, "Our business delivered another strong quarter, including an 11.2% increase in same-store retail revenue. Our results in the quarter were highlighted by another outstanding performance from our U.K. operations as our international diversification continues to complement our U.S. operations."
Highlights of the Third Quarter
-- Total Retail Unit Sales Increased 10.2% to 104,963
-- +9.2% in the United States; +12.5% Internationally
-- New unit retail sales +9.2%
-- Used unit retail sales +11.6%
-- Same-store Retail Revenue Increased 11.2%
-- New +8.3%; Used +16.6%; Finance & Insurance +12.2%; Service and
Parts +11.0%
-- +7.5% in the United States; +18.1% Internationally
-- Average Transaction Price Per Unit
-- New $38,955; +4.0%
-- Used $27,299; +8.2%
-- Average Gross Profit Per Unit
-- New $2,989, +$177/unit; Gross Margin 7.7%, +20 basis points
-- Used $1,800, -$69/unit; Gross Margin 6.6%, -80 basis points
-- Finance & Insurance $1,092, +$60/unit
For the nine months ended September 30, 2014, total revenue increased 19.9% to $12.9 billion. The revenue increase was driven by an 11.2% increase in total retail unit sales, including 6.7% on a same-store basis. Same-store retail revenue growth was 12.8%. Income from continuing operations attributable to common shareholders increased 19.5% to $222.8 million and related earnings per share increased 19.4% to $2.46 per share when compared to the same period last year.
Acquisitions
The Company has signed agreements to acquire a majority ownership interest in The Around The Clock Freightliner Group ("ATC"), a heavy-duty retail truck dealership group located in Texas, Oklahoma and New Mexico. Upon completion of the transactions, Penske Automotive Group's ownership interest would increase from 27% to approximately 86% and would become a fully consolidated entity. Upon completion of the transactions, ATC is expected to contribute an estimated $600 - $700 million in incremental revenue and incremental earnings per share of $0.12 to $0.14 on an annualized basis.
ATC currently operates fourteen locations, including eight full-service dealerships, offering Freightliner, Western Star, and Sprinter-branded trucks. The company also offers a full range of used trucks available for sale and service and parts departments that are open 24 hours a day, 7 days a week. Commenting on the acquisition, Penske Automotive Group Chairman Roger S. Penske said, "We are thrilled with the opportunity to acquire a majority ownership interest in ATC and to represent these world-class Daimler brands. ATC has a long and distinguished history as one of North America's premier full service heavy-duty truck dealerships, and provides an ideal framework for our company to begin building scale within the highly-fragmented commercial truck dealership industry."
Conference Call
Penske Automotive will host a conference call discussing financial results relating to the third quarter of 2014 on October 29, 2014, at 2:00 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial (877) 260-8896 [International, please dial (612) 332-0530]. The call will also be simultaneously broadcast over the Internet through the Investors Relations section of the Penske Automotive Group website. Additionally, an investor presentation relating to the third quarter 2014 financial results has been posted to the company's website. To access the presentation or to listen to the company's webcast, please refer to www.penskeautomotive.com.
About Penske Automotive
Penske Automotive Group, Inc., (NYSE: PAG) headquartered in Bloomfield Hills, Michigan, is an international transportation services company that operates automotive dealerships principally in the United States and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. PAG employs more than 20,000 people worldwide and is a member of the Fortune 500 and Russell 2000. For additional information, visit the company's website at www.penskeautomotive.com.
Non-GAAP Financial Measures
This release contains certain non-GAAP financial measures as defined under SEC rules, such as earnings before interest, taxes, depreciation and amortization ("EBITDA"). The company has reconciled these measures to the most directly comparable GAAP measures in the release. The company believes that these widely accepted measures of operating profitability improve the transparency of the company's disclosures and 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. These non-GAAP financial measures are not substitutes for GAAP financial results, and should only be considered in conjunction with the company's financial information that is presented in accordance with GAAP.
Caution Concerning Forward Looking Statements
Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s future sales potential and potential earnings outlook and ability to complete the transactions noted above. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others: economic conditions generally, conditions in the credit markets and changes in interest rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters or other disruptions that interrupt the supply of vehicles or parts to us; changes in consumer credit availability, the outcome of legal and administrative matters, and other factors over which management has limited control. These forward-looking statements should be evaluated together with additional information about Penske Automotive's business, markets, conditions and other uncertainties, which could affect Penske Automotive's future performance. These risks and uncertainties are addressed in Penske Automotive's Form 10-K for the year ended December 31, 2013, and its other filings with the Securities and Exchange Commission ("SEC"). This press release speaks only as of its date, and Penske Automotive disclaims any duty to update the information herein.
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Inquiries should contact:
David K. Jones Anthony R. Pordon
Executive Vice President and Executive Vice President Investor Relations
and Corporate Development
Chief Financial Officer
Penske Automotive Group, Inc.
Penske Automotive Group, Inc. 248-648-2540
248-648-2800 tpordon@penskeautomotive.com
dave.jones@penskeautomotive.com
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Statements of Income
(Amounts In Millions, Except Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2014 2013 % Increase/ 2014 2013 % Increase/
(Decrease) (Decrease)
----------
Revenues:
New Vehicle $2,231.1 $1,964.5 13.6% $6,495.5 $5,575.3 16.5%
Used Vehicle 1,301.9 1,078.5 20.7% 3,776.8 3,128.4 20.7%
Finance and Insurance, Net 114.7 98.2 16.8% 331.9 278.8 19.0%
Service and Parts 435.5 375.0 16.1% 1,288.7 1,139.6 13.1%
Fleet and Wholesale 215.9 177.0 22.0% 620.6 529.2 17.3%
Commercial Vehicle, Car Rental and Other 118.8 65.9 80.3% 359.1 87.7 309.5%
----- ---- ---- ----- ---- -----
Total Revenues $4,417.9 $3,759.1 17.5% $12,872.6 $10,739.0 19.9%
Cost of Sales:
New Vehicle $2,059.9 $1,817.0 13.4% $5,994.7 $5,152.4 16.3%
Used Vehicle 1,216.1 998.6 21.8% 3,513.7 2,891.5 21.5%
Service and Parts 176.8 149.3 18.4% 522.7 461.5 13.3%
Fleet and Wholesale 214.6 174.7 22.8% 611.8 520.1 17.6%
Commercial Vehicle, Car Rental and Other 91.8 48.4 89.7% 280.1 56.3 397.5%
---- ---- ---- ----- ---- -----
Total Cost of Sales $3,759.2 $3,188.0 17.9% $10,923.0 $9,081.8 20.3%
Gross Profit 658.7 571.1 15.3% 1,949.6 1,657.2 17.6%
SG&A Expenses 512.9 446.4 14.9% 1,513.9 1,286.2 17.7%
Depreciation 17.8 15.4 15.6% 51.8 44.4 16.7%
---- ---- ---- ---- ---- ----
Operating Income $128.0 $109.3 17.1% $383.9 $326.6 17.5%
Floor Plan Interest Expense (11.2) (10.6) 5.7% (33.9) (31.4) 8.0%
Other Interest Expense (13.3) (12.3) 8.1% (39.5) (35.7) 10.6%
Equity in Earnings of Affiliates 12.7 11.2 13.4% 28.7 22.4 28.1%
---- ---- ---- ---- ---- ----
Income from Continuing Operations Before Income Taxes $116.2 $97.6 19.1% $339.2 $281.9 20.3%
Income Taxes (39.2) (31.3) 25.2% (114.4) (94.5) 21.1%
----- ----- ---- ------ ----- ----
Income from Continuing Operations $77.0 $66.3 16.1% $224.8 $187.4 20.0%
Loss from Discontinued Operations, net of tax (1.9) (0.8) 137.5% (7.9) (1.4) 464.3%
---- ---- ----- ---- ---- -----
Net Income $75.1 $65.5 14.7% $216.9 $186.0 16.6%
Less: Income Attributable to Non-Controlling Interests 0.6 0.2 200.0% 2.0 1.0 100.0%
--- --- ----- --- --- -----
Net Income Attributable to Common Shareholders $74.5 $65.3 14.1% $214.9 $185.0 16.2%
===== ===== ==== ====== ====== ====
Income from Continuing Operations Per Share $0.85 $0.73 16.4% $2.46 $2.06 19.4%
===== ===== ==== ===== ===== ====
Income Per Share $0.83 $0.72 15.3% $2.38 $2.05 16.1%
===== ===== ==== ===== ===== ====
Weighted Average Shares Outstanding 90.3 90.2 0.1% 90.4 90.3 0.1%
==== ==== === ==== ==== ===
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations $77.0 $66.3 16.1% $224.8 $187.4 20.0%
Less: Income Attributable to Non-Controlling Interests 0.6 0.2 200.0% 2.0 1.0 100.0%
--- --- ----- --- --- -----
Income from Continuing Operations, net of tax $76.4 $66.1 15.6% $222.8 $186.4 19.5%
Loss from Discontinued Operations, net of tax (1.9) (0.8) 137.5% (7.9) (1.4) 464.3%
---- ---- ----- ---- ---- -----
Net Income Attributable to Common Shareholders $74.5 $65.3 14.1% $214.9 $185.0 16.2%
===== ===== ==== ====== ====== ====
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Millions)
(Unaudited)
September 30, December 31,
2014 2013
---- ----
Assets
Cash and
Cash
Equivalents $150.5 $49.8
Accounts
Receivable,
Net 643.8 600.8
Inventories 2,479.0 2,518.3
Other
Current
Assets 100.4 88.4
Assets
Held for
Sale 45.6 107.3
---- -----
Total
Current
Assets 3,419.3 3,364.6
Property
and
Equipment,
Net 1,375.1 1,232.2
Intangibles 1,482.7 1,439.9
Other
Long-
Term
Assets 405.2 378.8
----- -----
Total
Assets $6,682.3 $6,415.5
======== ========
Liabilities and Equity
Floor
Plan
Notes
Payable $1,606.1 $1,685.1
Floor
Plan
Notes
Payable
- Non-
Trade 893.6 901.6
Accounts
Payable 382.7 373.3
Accrued
Expenses 317.3 262.6
Current
Portion
Long-
Term
Debt 71.8 50.0
Liabilities
Held for
Sale 33.7 59.7
---- ----
Total
Current
Liabilities 3,305.2 3,332.3
Long-
Term
Debt 1,161.6 1,033.2
Other
Long-
Term
Liabilities 560.1 527.9
----- -----
Total
Liabilities 5,026.9 4,893.4
Equity 1,655.4 1,522.1
------- -------
Total
Liabilities
and
Equity $6,682.3 $6,415.5
======== ========
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Selected Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2014 2013 2014 2013
---- ---- ---- ----
Geographic Revenue Mix:
U.S. 61% 63% 60% 64%
U.K. 35% 35% 36% 35%
Other International 4% 2% 4% 1%
--- --- --- ---
Total 100% 100% 100% 100%
Revenue Mix:
Automotive Dealership 97% 98% 97% 99%
Commercial Vehicle, Car Rental and
Other 3% 2% 3% 1%
Total 100% 100% 100% 100%
Automotive Dealership Revenue Mix:
Premium:
BMW 26% 25% 26% 25%
Audi 13% 13% 13% 13%
Mercedes-Benz 11% 11% 10% 11%
Land Rover 6% 4% 6% 4%
Porsche 5% 4% 5% 5%
Lexus 4% 4% 4% 4%
Ferrari / Maserati 2% 2% 2% 2%
Bentley 1% 1% 2% 1%
Acura 1% 2% 1% 2%
Others 2% 3% 2% 2%
--- --- --- ---
Total Premium 71% 69% 71% 69%
Volume Non-U.S.:
Toyota 12% 12% 12% 12%
Honda 8% 10% 8% 10%
Volkswagen 2% 2% 2% 2%
Nissan 1% 1% 1% 1%
Others 2% 2% 2% 2%
--- --- --- ---
Total Volume Non-U.S. 25% 27% 25% 27%
U.S.:
General Motors / Chrysler / Ford 4% 4% 4% 4%
--- --- --- ---
Total Automotive Dealership Revenue 100% 100% 100% 100%
Gross Profit Mix:
New Vehicles 26.0% 25.8% 25.7% 25.5%
Used Vehicles 13.0% 14.0% 13.5% 14.3%
Finance and Insurance 17.4% 17.2% 17.0% 16.8%
Service and Parts 39.3% 39.5% 39.3% 40.9%
Fleet and Wholesale 0.2% 0.4% 0.5% 0.6%
Commercial Vehicle, Car Rental and
Other 4.1% 3.1% 4.0% 1.9%
--- --- --- ---
Total 100.0% 100.0% 100.0% 100.0%
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Selected Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2014 2013 Increase/ 2014 2013 Increase/
(Decrease) (Decrease)
----------
Operating items as a percentage of revenue:
Gross Profit:
New Vehicle 7.7% 7.5% +20 bps 7.7% 7.6% +10 bps
Used Vehicle 6.6% 7.4% -80 bps 7.0% 7.6% -60 bps
Service and Parts 59.4% 60.2% -80 bps 59.4% 59.5% -10 bps
Fleet and Wholesale 0.6% 1.3% -70 bps 1.4% 1.7% -30 bps
Commercial Vehicle, Car Rental and
Other 22.7% 26.6% nm 22.0% 35.8% nm
---- ---- --- ---- ---- ---
Total Gross Profit 14.9% 15.2% -30 bps 15.1% 15.4% -30 bps
Selling, General and Administrative
Expenses 11.6% 11.9% -30 bps 11.8% 12.0% -20 bps
Operating Income 2.9% 2.9% --- 3.0% 3.0% ---
Inc. From Cont. Ops. Before Inc. Taxes 2.6% 2.6% --- 2.6% 2.6% ---
Operating items as a percentage of total gross profit:
Selling, General and Administrative
Expenses 77.9% 78.2% -30 bps
77.7% 77.6% +10 bps
Operating Income 19.4% 19.1% +30 bps
19.7% 19.7% ---
nm - not meaningful
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2014 2013 % 2014 2013 %
Increase/ Increase/
(Decrease) (Decrease)
----------
(Amounts in Millions):
EBITDA* $147.3 $125.3 17.6% $430.5 $362.0 18.9%
Rent Expense 49.0 44.7 9.6% 146.6 132.2 10.9%
Floorplan Credits 7.9 7.4 6.8% 22.0 19.7 11.7%
* See the following Non-GAAP reconciliation tables
PENSKE AUTOMOTIVE GROUP, INC.
Automotive Retail Operations Selected Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2014 2013 % 2014 2013 %
Increase/ Increase/
(Decrease) (Decrease)
----------
Total Retail Units:
New Retail 57,273 52,463 9.2% 163,071 147,769 10.4%
Used Retail 47,690 42,751 11.6% 138,972 123,848 12.2%
------ ------ ---- ------- ------- ----
Total Retail 104,963 95,214 10.2% 302,043 271,617 11.2%
======= ====== ==== ======= ======= ====
Same-Store Retail Units:
New Same-Store Retail 54,572 52,463 4.0% 155,188 147,273 5.4%
Used Same-Store Retail 45,678 42,751 6.8% 133,123 122,898 8.3%
------ ------ --- ------- ------- ---
Total Same-Store Retail 100,250 95,214 5.3% 288,311 270,171 6.7%
======= ====== === ======= ======= ===
Same-Store Retail Revenue: (Amounts in Millions)
New Vehicles $2,127.7 $1,964.5 8.3% $6,179.2 $5,552.9 11.3%
Used Vehicles 1,257.1 1,078.5 16.6% 3,637.5 3,109.5 17.0%
Finance and Insurance, Net 110.2 98.2 12.2% 319.2 278.3 14.7%
Service and Parts 416.4 375.0 11.0% 1,232.8 1,134.1 8.7%
----- ----- ---- ------- ------- ---
Total Same-Store Retail $3,911.4 $3,516.2 11.2% $11,368.7 $10,074.8 12.8%
======== ======== ==== ========= ========= ====
Retail Revenue Mix:
New Vehicles 54.6% 55.9% -130 bps 54.6% 55.1% -50 bps
Used Vehicles 31.9% 30.7% +120 bps 31.8% 30.9% +90 bps
Finance and Insurance, Net 2.8% 2.8% --- 2.8% 2.7% +10 bps
Service and Parts 10.7% 10.6% +10 bps 10.8% 11.3% -50 bps
Average Revenue per Vehicle Retailed:
New Vehicles $38,955 $37,445 4.0% $39,832 $37,729 5.6%
Used Vehicles 27,299 25,227 8.2% 27,176 25,260 7.6%
Gross Profit per Vehicle Retailed:
New Vehicles $2,989 $2,812 6.3% $3,071 $2,861 7.3%
Used Vehicles 1,800 1,869 -3.7% 1,893 1,913 -1.0%
Finance and Insurance 1,092 1,032 5.8% 1,099 1,026 7.1%
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Non-GAAP Reconciliation
(Unaudited)
Reconciliation of reported net income to earnings before interest, taxes, depreciation and amortization ("EBITDA") for the three months and nine months ended September 30, 2014 and 2013:
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(Amounts in Millions) 2014 2013 % 2014 2013 %
Increase/ Increase/
(Decrease) (Decrease)
----------
Net Income $75.1 $65.5 14.7% $216.9 $186.0 16.6%
Depreciation 17.8 15.4 15.6% 51.8 44.4 16.7%
Other Interest Expense 13.3 12.3 8.1% 39.5 35.7 10.6%
Income Taxes 39.2 31.3 25.2% 114.4 94.5 21.1%
Loss from Discontinued
Operations, net of tax 1.9 0.8 137.5% 7.9 1.4 464.3%
--- --- ----- --- --- -----
EBITDA $147.3 $125.3 17.6% $430.5 $362.0 18.9%
====== ====== ==== ====== ====== ====
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SOURCE Penske Automotive Group, Inc.
