PENSKE AUTOMOTIVE GROUP, INC. BLOOMFIELD HILLS, Mich., April 26, 2017 /PRNewswire/ --
First Quarter 2017 Highlights
-----------------------------
--Revenue Increases 5.3% to $5.1
Billion; Excluding Foreign Exchange
+11.3%
-- Same-Store Retail Revenue
Decreases 2.2%; Excluding Foreign
Exchange +3.7%
--Income from Continuing Operations
Attributable to Common Shareholders
Increases 4.9% to $83.2 Million;
Excluding Foreign Exchange +14.4% to
$90.7 Million
--Earnings Per Share from Continuing
Operations Attributable to Common
Shareholders Increases 7.8% to
$0.97; Excluding Foreign Exchange
+17.8% to $1.06
------------------------------------
Penske Automotive Group, Inc. (NYSE: PAG), an international transportation services company, today announced record first quarter results, including record revenue, income from continuing operations and earnings per share. For the three months ended March 31, 2017, income from continuing operations attributable to common shareholders increased 4.9% to $83.2 million, and related earnings per share increased 7.8% to $0.97, when compared to the same period last year. Foreign exchange negatively impacted income from continuing operations attributable to common shareholders by $7.5 million, and earnings per share attributable to common shareholders by $0.09. Excluding the foreign exchange impact, income from continuing operations attributable to common shareholders would have increased 14.4% to $90.7 million and earnings per share would have increased 17.8% to $1.06.
For the three months ended March 31, 2017, total automotive units retailed increased 11.6%, driven by strength in the company's U.K. operations and acquisitions. Total same-store units retailed declined 0.4%. Total revenue increased 5.3% to $5.1 billion, and same-store retail revenue declined 2.2%. Foreign exchange rates negatively impacted revenues by approximately $287.6 million. Excluding the foreign exchange impact, total revenue would have increased 11.3% to $5.4 billion and same-store retail revenue would have increased 3.7%.
Commenting on the company's results, Penske Automotive Group Chairman Roger S. Penske said, "Our diversified transportation services business delivered another outstanding quarter of record results despite foreign currency headwinds. I am pleased to see increases in average gross profit per transaction for new vehicles, used vehicles and finance and insurance when excluding the impact from foreign exchange, coupled with another strong quarter of record results by our U.K. business. As we look to the future our recent acquisitions combined with the continued performance of our existing business provide a solid foundation for growth and profitability."
Automotive Retail Highlights - Note: f/x = foreign exchange
-- Retail Unit Sales +11.6% to 124,472
-- New unit retail sales +5.8%
-- Used unit retail sales +18.1%
-- Same-Store Retail Unit Sales -0.4% to 110,577
-- New unit retail sales +0.6%
-- Used unit retail sales -1.5%
-- Same-Store Retail Revenue -2.2%; excluding f/x +3.7%
-- New -2.9%; Used -2.7%; Finance & Insurance +4.9%; Service and Parts
+0.9%
-- Excluding f/x: New +2.8%; Used +4.1%; Finance & Insurance
+11.2%; Service and Parts +4.9%
-- Average Gross Profit Per Unit
-- New $2,848, -$140/unit; Gross Margin 7.7%, flat
-- Excluding f/x $3,025, +$37/unit
-- Used $1,512, -$86/unit; Gross Margin 6.1%, +10 basis points
-- Excluding f/x $1,606, +$8/uni
-- Finance & Insurance $1,104, +$42/unit
-- Excluding f/x $1,174, +$112/unit
Automotive retail results include the company's recently acquired used vehicle superstores, which are located in the U.S. and in the U.K. During the first quarter of 2017, these used vehicle dealerships retailed 8,200 units, generating $143.1 million in revenue and $24.6 million in gross profit. The average transaction price was $14,372, generating a gross profit per unit of $1,382. Finance and insurance gross profit per unit was $1,147.
Retail Commercial Truck Operations
The company operates twenty locations in the U.S. and Canada under the "Premier Truck Group" brand name, offering primarily the Freightliner and Western Star brands. For the three months ended March 31, 2017, Premier Truck Group retailed 1,507 units, generated $211.7 million of revenue, and $36.4 million of gross profit, principally through the retail sale of new/used medium-and heavy-duty trucks and service/parts sales. For the three months ended March 31, 2017, gross profit per used truck retailed improved to $2,589 from a loss of $1,471 per unit in the same period last year, as used truck prices stabilized. Service and parts gross profit represented approximately 79% of Premier Truck Group's gross profit for the three months ended March 31, 2017.
Penske Truck Leasing
Penske Truck Leasing Co., L.P. ("PTL") is a leading provider of full-service truck leasing, truck rental, contract maintenance and logistics services. For the three months ended March 31, 2017, we recorded $11.9 million as part of equity in earnings of affiliates compared to $3.5 million for the three months ended March 31, 2016. The company acquired an additional 14.4% ownership interest in PTL in July 2016, increasing our ownership to 23.4%. Accordingly, the company accounts for its ownership interest in PTL using the equity method of accounting.
Acquisitions
During the three months ended March 31, 2017, the company completed acquisitions representing approximately $900 million in estimated annualized revenue. These acquisitions include a Jaguar and Land Rover dealership in Paramus, New Jersey, U.S.-based CarSense and U.K.-based CarShop, both of which are stand-alone specialty retailers of used vehicles.
In April 2017, the company announced that it had acquired Schumacher European, LTD., an 88,000 square foot Mercedes-Benz and Sprinter dealership with 67 service bays located in Phoenix, Arizona. Schumacher European is expected to add approximately $250 million in estimated annualized revenue. The Schumacher dealership is located contiguous to the company's Scottsdale 101 Auto Collection which includes 15 franchises, over 220 service bays and generates over $800 million in annual revenues.
Conference Call
Penske Automotive will host a conference call discussing financial results relating to the first quarter of 2017 on Wednesday, April 26, 2017, at 2:00 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial (800) 700-7860 - [International, please dial (612) 332-0720]. The call will also be simultaneously broadcast over the Internet through the Investor Relations section of the Penske Automotive Group website. Additionally, an investor presentation relating to the first quarter 2017 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 and commercial truck dealerships principally in the United States, Canada, 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 25,000 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 adjusted income from continuing operations and related earnings per share, and 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. 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 and foreign currency exchange rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters, recall 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, 2016, and its other filings with the Securities and Exchange Commission ("SEC"). This press release speaks only as of its date, and Penske Automotive Group disclaims any duty to update the information herein.
Find a vehicle: http://www.penskecars.com
Engage Penske Automotive: http://www.penskesocial.com
Like Penske Automotive on Facebook: https://facebook.com/PenskeCars
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Inquiries should contact:
J.D. Carlson Anthony R. Pordon
Executive Vice President and Executive Vice President Investor Relations and Corporate Development
Chief Financial Officer Penske Automotive Group, Inc.
248-648-2540
Penske Automotive Group, Inc.
248-648-2810 tpordon@penskeautomotive.com
jcarlson@penskeautomotive.com
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Statements of Income
(Amounts In Millions, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
---------
2017 2016 Increase/
(Decrease)
----------
Revenue $5,081.1 $4,824.6 5.3%
Cost of Sales 4,306.8 4,100.8
5.0%
----
Gross Profit $774.3 $723.8
7.0%
SG&A Expenses 601.7 558.9
7.7%
Depreciation 22.4 20.8
7.7%
----
Operating Income $150.2 $144.1
4.2%
Floor Plan Interest Expense (13.7) (12.8)
7.0%
Other Interest Expense (25.0) (17.2)
45.3%
Equity in Earnings of Affiliates 13.2 5.5
140.0%
Income from Continuing Operations Before Income Taxes $124.7 $119.6
4.3%
Income Taxes (41.1) (39.4)
4.3%
----
Income from Continuing Operations $83.6 $80.2
4.2%
Loss from Discontinued Operations, net of tax (0.6) ---
nm
---
Net Income $83.0 $80.2
3.5%
Less: Income Attributable to Non-Controlling Interests 0.4 0.9
(55.6%)
-------
Net Income Attributable to Common Shareholders $79.3
$82.6 4.2%
===== ===
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations $83.6 $80.2
4.2%
Less: Income Attributable to Non-Controlling Interests 0.4 0.9
(55.6%)
-------
Income from Continuing Operations, net of tax $83.2 $79.3
4.9%
Loss from Discontinued Operations, net of tax (0.6) ---
nm
---
Net Income Attributable to Common Shareholders $82.6 $79.3
4.2%
====
Income from Continuing Operations Per Share $0.97 $0.90
7.8%
====
Income Per Share $0.96 $0.90
6.7%
====
Weighted Average Shares Outstanding 85.6 88.3
(3.1%)
======
nm - not meaningful
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Millions)
(Unaudited)
March 31, December 31,
2017 2016
---- ----
Assets:
Cash and
Cash
Equivalents $72.2 $24.0
Accounts
Receivable,
Net 852.2 879.0
Inventories 3,565.8 3,408.2
Other
Current
Assets 99.3 73.9
Assets
Held for
Sale --- 8.4
--- ---
Total
Current
Assets 4,589.5 4,393.5
Property
and
Equipment,
Net 1,874.7 1,806.5
Intangibles 1,985.4 1,711.3
Other
Long-
Term
Assets 945.8 921.7
----- -----
Total
Assets $9,395.4 $8,833.0
======== ========
Liabilities and Equity:
Floor Plan
Notes
Payable $2,104.8 $2,084.5
Floor Plan
Notes
Payable -
Non-
Trade 1,296.4 1,233.3
Accounts
Payable 555.9 497.4
Accrued
Expenses 413.9 360.0
Current
Portion
Long-
Term Debt 48.4 48.3
Liabilities
Held for
Sale 0.8 6.1
--- ---
Total
Current
Liabilities 4,420.2 4,229.6
Long-Term
Debt 1,989.0 1,828.8
Other
Long-
Term
Liabilities 1,089.3 995.1
------- -----
Total
Liabilities 7,498.5 7,053.5
Equity 1,896.9 1,779.5
------- -------
Total
Liabilities
and
Equity $9,395.4 $8,833.0
======== ========
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Operations
Selected Data
(Unaudited)
Three Months Ended
March 31,
---------
2017 2016
---- ----
Geographic Revenue Mix:
North America 56.5% 57.3%
U.K. 35.9% 35.4%
Other International 7.6% 7.3%
--- ---
Total 100.0% 100.0%
===== =====
Revenue: (Amounts in Millions)
Retail Automotive $4,756.4 $4,512.9
Retail Commercial Trucks 211.7 206.7
Commercial Vehicles Australia/Power Systems and Other 113.0 105.0
Total $5,081.1 $4,824.6
======== ========
Gross Profit: (Amounts in Millions)
Retail Automotive $708.3 $665.0
Retail Commercial Trucks 36.4 33.2
Commercial Vehicles Australia/Power Systems and Other 29.6 25.6
---- ----
Total $774.3 $723.8
====== ======
Gross Margin:
Retail Automotive 14.9% 14.7%
Retail Commercial Trucks 17.2% 16.1%
Commercial Vehicles Australia/Power Systems and Other 26.2% 24.4%
---- ----
Total 15.2% 15.0%
==== ====
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Operations
Selected Data
(Unaudited)
Three Months Ended
March 31,
---------
2017 2016 Increase/
(Decrease)
----------
Operating Items as a Percentage of Revenue:
Gross Profit 15.2% 15.0% 20 bps
Selling, General and Administrative Expenses 11.8% 11.6% 20 bps
Operating Income 3.0% 3.0% --- bps
Inc. From Cont. Ops. Before Inc. Taxes 2.5% 2.5% --- bps
Operating Items as a Percentage of Total Gross Profit:
Selling, General and Administrative Expenses 77.7% 77.2% 50 bps
Operating Income 19.4% 19.9% (50 bps)
Three Months Ended
March 31,
---------
2017 2016 Increase/
(Decrease)
---------
(Amounts in Millions)
EBITDA* $172.1 $157.6 9.2%
Floorplan Credits $8.3 $8.9 (6.7%)
Rent Expense $53.4 $51.5 3.7%
* See the following Non-GAAP reconciliation table.
PENSKE AUTOMOTIVE GROUP, INC.
Retail Automotive Operations
Selected
Data
(Unaudited)
Three Months Ended
March 31,
---------
2017 2016
---- ----
Retail Automotive Units:
New Retail 62,188 58,753
Used Retail 62,284 52,741
Total 124,472 111,494
======= =======
Retail Automotive Revenue:
(Amounts in Millions)
New
Vehicles $2,307.4 $2,268.2
Used
Vehicles 1,541.0 1,412.4
Finance and
Insurance,
Net 137.4 118.4
Service and
Parts 498.9 478.1
Fleet and
Wholesale 271.7 235.8
Total
Revenue $4,756.4 $4,512.9
======== ========
Retail Automotive Gross Profit:
(Amounts in Millions)
New
Vehicles $177.1 $175.5
Used
Vehicles 94.1 84.3
Finance and
Insurance,
Net 137.4 118.4
Service and
Parts 293.7 281.4
Fleet and
Wholesale 6.0 5.4
--- ---
Total Gross
Profit $708.3 $665.0
====== ======
Retail Automotive Revenue Per
Vehicle Retailed:
New
Vehicles $37,103 $38,607
Used
Vehicles 24,742 26,780
Retail Automotive Gross Profit Per
Vehicle Retailed:
New
Vehicles $2,848 $2,988
Used
Vehicles 1,512 1,598
Finance &
Insurance 1,104 1,062
PENSKE AUTOMOTIVE GROUP, INC.
Retail Automotive Operations
Selected Data
(Unaudited)
Three Months Ended
March 31,
---------
2017 2016
---- ----
Retail Automotive Revenue Mix Percentages:
New Vehicles 48.5% 50.3%
Used Vehicles 32.4% 31.3%
Finance and Insurance, Net 2.9% 2.6%
Service and Parts 10.5% 10.6%
Fleet and Wholesale 5.7% 5.2%
--- ---
Total 100.0% 100.0%
===== =====
Retail Automotive Gross Profit Mix Percentages:
New Vehicles 25.0% 26.4%
Used Vehicles 13.3% 12.7%
Finance and Insurance, Net 19.4% 17.8%
Service and Parts 41.5% 42.3%
Fleet and Wholesale 0.8% 0.8%
Total 100.0% 100.0%
===== =====
Three Months Ended
March 31,
---------
2017 2016 Increase/
(Decrease)
---------
Retail Automotive Gross Margin:
New Vehicles 7.7% 7.7% --- bps
Used Vehicles 6.1% 6.0% 10 bps
Service and Parts 58.9% 58.9% --- bps
Fleet and Wholesale 2.2% 2.3% (10 bps)
--- --- -------
Total Gross Margin 14.9% 14.7% 20 bps
==== ==== ======
PENSKE AUTOMOTIVE GROUP, INC.
Retail Automotive Operations
Selected Data
(Unaudited)
Three Months Ended
March 31,
---------
2017 2016
---- ----
Retail Automotive Revenue Mix:
Premium:
BMW / MINI 23% 25%
Audi 14% 14%
Mercedes-Benz 10% 10%
Land Rover 7% 7%
Porsche 6% 5%
Lexus 3% 4%
Ferrari / Maserati 3% 2%
Acura 1% 1%
Bentley 1% 1%
Others 2% 3%
--- ---
Total Premium 70% 72%
Volume Non-U.S.:
Toyota 10% 11%
Honda 7% 7%
Volkswagen 4% 3%
Nissan 1% 1%
Others 2% 2%
--- ---
Total Volume Non-U.S. 24% 24%
U.S.:
General Motors / Chrysler / Ford 3% 4%
--- ---
Stand-Alone Used 3% ---
=== ===
Total 100% 100%
=== ===
Retail Automotive Geographic Revenue Mix:
U.S. 55.8% 56.6%
U.K. 38.4% 37.8%
Other International 5.8% 5.6%
--- ---
Total 100.0% 100.0%
===== =====
Retail Automotive Geographic Gross Profit Mix:
U.S. 60.7% 61.2%
U.K. 33.9% 33.5%
Other International 5.4% 5.3%
--- ---
Total 100.0% 100.0%
===== =====
PENSKE AUTOMOTIVE GROUP, INC.
Retail Automotive Operations
Same-Store
Selected Data
(Unaudited)
Three Months Ended
March 31,
---------
2017 2016
---- ----
Retail Automotive Same-Store Units:
New Retail 58,725 58,387
Used Retail 51,852 52,615
Total 110,577 111,002
======= =======
Retail Automotive Same-Store Revenue: (Amounts in Millions)
New Vehicles $2,194.6 $2,260.8
Used Vehicles 1,371.9 1,410.2
Finance and Insurance, Net 124.1 118.3
Service and Parts 481.2 477.1
Fleet and Wholesale 246.1 235.6
Total Revenue $4,417.9 $4,502.0
======== ========
Retail Automotive Same-Store Gross Profit: (Amounts in Millions)
New Vehicles $166.4
$175.0
Used Vehicles 80.3 84.2
Finance and Insurance, Net 124.1 118.3
Service and Parts 282.8 281.1
Fleet and Wholesale 5.3 5.5
--- ---
Total Gross Profit $658.9 $664.1
====== ======
Retail Automotive Same-Store Revenue Per Vehicle Retailed:
New Vehicles $37,370
$38,721
Used Vehicles 26,457 26,802
Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:
New Vehicles $2,833 $2,997
Used Vehicles 1,549 1,601
Finance & Insurance 1,123 1,066
PENSKE AUTOMOTIVE GROUP, INC.
Retail Commercial Truck Operations
Selected Data
(Unaudited)
Three Months Ended
March 31,
---------
Retail Commercial Truck Units: 2017 2016
---- ----
New Retail 1,126 1,160
Used Retail 381 271
Total 1,507 1,431
===== =====
Retail Commercial Truck Revenue: (Amounts in Millions)
New Vehicles $110.7 $116.7
Used Vehicles 19.0 13.5
Finance and Insurance, Net 2.1 1.9
Service and Parts 78.0 71.4
Lease, Rental & Wholesale 1.9 3.2
Total Revenue $211.7 $206.7
====== ======
Retail Commercial Truck Gross Profit: (Amounts in Millions)
New Vehicles $4.5 $4.9
Used Vehicles 1.0 (0.4)
Finance and Insurance, Net 2.2 1.9
Service and Parts 28.8 26.4
Lease, Rental & Wholesale (0.1) 0.4
Total Gross Profit $36.4 $33.2
===== =====
Retail Commercial Truck Revenue Per Vehicle Retailed:
New Vehicles $98,271 $100,618
Used Vehicles 49,845 49,727
Retail Commercial Truck Gross Profit Per Vehicle Retailed:
New Vehicles $3,981 $4,201
Used Vehicles 2,589 (1,471)
Finance & Insurance 1,426 1,311
Retail Commercial Truck Gross Profit as a Percentage of Revenue
Gross Profit:
New Vehicles 4.1% 4.2%
Used Vehicles 5.3% (3.0%)
Service and Parts 36.9% 37.0%
Lease, Rental & Wholesale (5.3%) 12.5%
----- ----
Total Gross Profit 17.2% 16.1%
PENSKE AUTOMOTIVE GROUP, INC.
Retail Commercial Truck Operations
Same-Store
Selected Data
(Unaudited)
Three Months Ended
March 31,
---------
Retail Commercial Truck Same-Store Units: 2017 2016
---- ----
New Retail 959 1,160
Used Retail 320 271
Total 1,279 1,431
===== =====
Retail Commercial Truck Same-Store Revenue: (Amounts in Millions)
New Vehicles $92.5 $116.7
Used Vehicles 16.2 13.5
Finance and Insurance, Net 1.9 1.9
Service and Parts 67.6 71.4
Lease, Rental & Wholesale 1.9 3.2
Total Revenue $180.1 $206.7
====== ======
Retail Commercial Truck Same-Store Gross Profit: (Amounts in Millions)
New Vehicles $4.1 $4.9
Used Vehicles 0.9 (0.4)
Finance and Insurance, Net 1.9 1.9
Service and Parts 25.4 26.4
Lease, Rental & Wholesale (0.1) 0.4
Total Gross Profit $32.2 $33.2
===== =====
Retail Commercial Truck Same-Store Revenue Per Vehicle Retailed:
New Vehicles $96,461 $100,618
Used Vehicles 50,607 49,727
Retail Commercial Truck Same-Store Gross Profit Per Vehicle Retailed:
New Vehicles $4,279 $4,201
Used Vehicles 2,660 (1,471)
Finance & Insurance 1,523 1,311
Retail Commercial Truck Same-Store Gross Profit as a Percentage of Revenue
Gross Profit:
New Vehicles 4.4% 4.2%
Used Vehicles 5.6% (3.0%)
Service and Parts 37.6% 37.0%
Lease, Rental & Wholesale (5.3%) 12.5%
----- ----
Total Gross Profit 17.9% 16.1%
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Non-GAAP Reconciliations
(Unaudited)
The following table reconciles reported net income to earnings before interest, taxes, depreciation and amortization ("EBITDA") for the three months ended March 31, 2017 and 2016:
Three Months Ended
March 31,
---------
2017 2016 Increase/
(Decrease)
----------
(Amounts in Millions)
Net Income $83.0 $80.2 3.5%
Add: Depreciation 22.4 20.8 7.7%
Other Interest Expense 25.0 17.2 45.3%
Income Taxes 41.1 39.4 4.3%
Loss from Discontinued Operations, net of tax 0.6 --- nm
--- --- ---
EBITDA $172.1 $157.6 9.2%
====== ====== ===
nm - not meaningful
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SOURCE Penske Automotive Group, Inc.
