Penske Automotive Group, Inc. : Penske Automotive Reports Record First Quarter Results
04/25/2012| 07:10am US/Eastern
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Total Retail Unit Sales Increase 18.1%
Revenues Increase 17.9% to $3.2 Billion
Same-store Retail Revenue Increases 7.5%
Income from Continuing Operations Increases 37.3% to $50.0 Million
EPS from Continuing Operations Increases 41.0% to $0.55
Penske
Automotive Group, Inc. (NYSE:PAG), an international automotive
retailer, announced today the most profitable first quarter in Company
history. First quarter 2012 income from continuing operations
attributable to common shareholders increased 37.3% to $50.0 million and
related earnings per share increased 41.0% to $0.55 per share. This
compares to income from continuing operations attributable to common
shareholders of $36.4 million, or $0.39 per share in the same period
last year.
First quarter revenue increased by 17.9% to $3.2 billion, driven by an
improvement in total retail unit sales of 18.1% and growth in the
Company's used-to-new ratio to .89 to 1 from .78 to 1 in the same period
last year. Same-store new and used retail unit sales increased 9.5% and
total same-store retail revenue increased 7.5% with each area of the
business generating growth.
Total gross profit improved 15.3% to $506.6 million. The Company's
selling, general and administrative expenses as a percentage of gross
profit leveraged 220 basis points in the first quarter to 78.7%
contributing to a 31.3% improvement in operating income to $94.6
million. Operating income as a percent of revenue was 2.9%, representing
an improvement of 30 basis points.
Highlights of the First Quarter
Total retail unit sales increased 18.1% to 81,472
+12.3% in the United States; +30.7% Internationally
New unit retail sales +11.5%
Used unit retail sales +26.6%
Same-store retail revenue increased 7.5%
New +5.1%; Used +14.0%; Finance & Insurance +14.2%; Service and
Parts +0.7%
+8.5% in the United States; +5.9% Internationally
Average Gross Profit Per Unit
New $3,064; Gross Margin 8.4%, up 50 basis points
Used $2,043; Gross Margin 8.1%, down 10 basis points
Finance & Insurance $981
Chairman Roger Penske said, "I am extremely pleased with our team's
performance. Our results continue to demonstrate the strength and
diversity of our business in both the U.S. and international markets. We
produced another outstanding quarter of profitability while generating
same-store revenue increases in each area of our business, including
same-store retail revenue growth of 7.5%. New and used vehicle margins
were strong, and our service and parts operations gross margin added 60
basis points to 57.7%."
Penske added, "In light of perceptions surrounding our international
markets, I am particularly pleased with the performance of these
businesses. During the first quarter, our international-based same-store
retail revenue increased 5.9%."
Securities Repurchase Activity
During the first quarter the Company acquired 350,000 shares of its
common stock for an aggregate purchase price of $8.5 million, or an
average price of $24.35 per share. The Company currently has remaining
authorization from its Board of Directors to repurchase up to $98.3
million of its outstanding common stock, debt or convertible debt.
Securities may be acquired from time to time either through open market
purchases, negotiated transactions or other means.
Conference Call
Penske Automotive will host a conference call discussing financial
results relating to the first quarter of 2012 on April 25, 2012,
at 2:30 p.m.Eastern Daylight Time. To listen to the
conference call, participants must dial (800) 230-1085
[International, please dial (612) 234-9960]. The call will also be
simultaneously broadcast over the Internet through the Investors
Relations section of the Penske Automotive Group website at www.penskeautomotive.com.
About Penske Automotive
Penske
Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan,
operates 335 retail automotive franchises, representing 40 different
brands and 29 collision repair centers. Penske Automotive, which sells
new and previously owned vehicles, finance and insurance products and
replacement parts, and offers maintenance and repair services on all
brands it represents, has 168 franchises in 17 states and Puerto Rico
and 167 franchises located outside the United States, primarily in the United
Kingdom. Penske Automotive is a member of the Fortune 500 and
Russell 2000 and has approximately 16,000 employees.
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.
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 outlook. 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, 2011, 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.
Income from Continuing Operations Before Income Taxes
77,082
52,150
Income Taxes
(26,902
)
(15,670
)
Income from Continuing Operations
50,180
36,480
Loss from Discontinued Operations, Net of Tax
(3,174
)
(2,483
)
Net Income
47,006
33,997
Income Attributable to Non-Controlling Interests
(188
)
(70
)
Net Income Attributable to Common Shareholders
46,818
$
33,927
Income from Continuing Operations Per Share
$
0.55
$
0.39
Income Per Share
$
0.52
$
0.37
Weighted Average Shares Outstanding
90,338
92,554
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations
$
50,180
$
36,480
Income Attributable to Non-Controlling Interests
(188
)
(70
)
Income from Continuing Operations, net of tax
49,992
36,410
Loss from Discontinued Operations, net of tax
(3,174
)
(2,483
)
Net Income
46,818
$
33,927
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)
March 31,
December 31,
2012
2011
Assets
Cash and Cash Equivalents
$
31,768
$
28,490
Accounts Receivable, Net
492,653
440,273
Inventories
1,770,235
1,581,586
Other Current Assets
91,869
80,269
Assets Held for Sale
29,075
67,777
Total Current Assets
2,415,600
2,198,395
Property and Equipment, Net
915,081
857,587
Intangibles
1,201,566
1,134,179
Other Long-Term Assets
302,518
312,138
Total Assets
$
4,834,765
$
4,502,299
Liabilities and Equity
Floor Plan Notes Payable
$
1,114,070
$
977,547
Floor Plan Notes Payable - Non-Trade
701,242
700,572
Accounts Payable
297,705
220,708
Accrued Expenses
258,455
201,579
Current Portion Long-Term Debt
13,264
3,414
Liabilities Held for Sale
29,928
45,852
Total Current Liabilities
2,414,664
2,149,672
Long-Term Debt
848,630
846,777
Other Long-Term Liabilities
389,274
365,437
Total Liabilities
3,652,568
3,361,886
Equity
1,182,197
1,140,413
Total Liabilities and Equity
$
4,834,765
$
4,502,299
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data
(Unaudited)
Three Months Ended
March 31,
%
2012
2011
Change
Total Retail Units:
New Retail
43,099
38,668
11.5
%
Used Retail
38,373
30,299
26.6
%
Total Retail
81,472
68,967
18.1
%
Fleet
3,476
1,480
134.9
%
Wholesale
17,944
14,492
23.8
%
Total
102,892
84,939
21.1
%
Same-Store Retail Units:
New Same-Store Retail
39,437
38,368
2.8
%
Used Same-Store Retail
35,556
30,117
18.1
%
Total Same-Store Retail
74,993
68,485
9.5
%
Same-Store Retail Revenue: (Amounts in thousands)
New Vehicles
$
1,447,577
$
1,376,770
5.1
%
Used Vehicles
897,709
787,310
14.0
%
Finance and Insurance, Net
75,434
66,027
14.2
%
Service and Parts
342,000
339,466
0.7
%
Total Same-Store Retail
$
2,762,720
$
2,569,573
7.5
%
Revenue Mix:
New Vehicles
48.7
%
50.4
%
Used Vehicles
29.9
%
28.8
%
Finance and Insurance, Net
2.5
%
2.4
%
Service and Parts
11.4
%
12.4
%
Fleet and Wholesale
7.5
%
6.0
%
Average Revenue per Vehicle Retailed:
New Vehicles
$
36,621
$
35,832
2.2
%
Used Vehicles
25,271
26,131
(3.3
%)
Gross Profit per Vehicle Retailed:
New Vehicles
$
3,064
$
2,838
7.9
%
Used Vehicles
2,043
2,149
(4.9
%)
Finance and Insurance
981
964
1.8
%
Operating items as a percentage of revenue:
New Vehicle Gross Profit
8.4
%
7.9
%
Used Vehicle Gross Profit
8.1
%
8.2
%
Service and Parts Gross Profit
57.7
%
57.1
%
Total Gross Profit
15.6
%
16.0
%
Selling, General and Admin. Expenses
12.3
%
12.9
%
Operating Income
2.9
%
2.6
%
Inc. From Cont. Ops. Before Inc. Taxes
2.4
%
1.9
%
Operating items as a percentage of total gross profit:
Selling, General and Administrative Expenses
78.7
%
80.9
%
Operating Income
18.7
%
16.4
%
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)
(Unaudited)
Three Months Ended
March 31,
2012
2011
Brand Revenue Mix:
Premium:
BMW
24
%
23
%
Audi
13
%
12
%
Mercedes-Benz
10
%
9
%
Lexus
4
%
5
%
Land Rover
5
%
5
%
Porsche
4
%
4
%
Ferrari / Maserati
3
%
3
%
Acura
1
%
2
%
Other
4
%
4
%
Total Premium
68
%
67
%
Foreign:
Toyota
11
%
11
%
Honda
11
%
12
%
Nissan
1
%
2
%
Volkswagen
2
%
2
%
Other
3
%
2
%
Total Foreign
28
%
29
%
Domestic Big 3
General Motors / Chrysler / Ford
4
%
4
%
Revenue Mix:
U.S.
61
%
62
%
International
39
%
38
%
Other (Amounts in Thousands):
EBITDA *
$
102,641
$
76,951
Rent Expense
44,129
42,174
Floorplan Credits
4,888
5,202
* See the following Non-GAAP reconciliation tables
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)
(Unaudited)
Reconciliation of 2012 and 2011 net income to EBITDA:
Three Months Ended
March 31,
(Amounts in Thousands)
2012
2011
Net Income
$
47,006
$
33,997
Depreciation
13,349
11,798
Other Interest Expense
12,210
11,285
Debt Discount Amortization
-
1,718
Income Taxes
26,902
15,670
Loss from Discontinued Operations, net
3,174
2,483
EBITDA
$
102,641
$
76,951
Inquiries should contact: David K. Jones Executive Vice
President and Chief Financial Officer Penske Automotive Group,
Inc. 248-648-2800 dave.jones@penskeautomotive.com or Anthony
R. Pordon Executive Vice President Investor Relations and Corporate
Development Penske Automotive Group, Inc. 248-648-2540 tpordon@penskeautomotive.com
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