Market Overview

Group 1 Automotive Reports All-Time Record Profits On 26 Percent Revenue Increase

HOUSTON, Oct. 25, 2012 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today reported record 2012 third-quarter net income of $31.3 million and record diluted earnings per common share of $1.32 for the period ended Sept. 30, 2012. Net income increased 31.6 percent from the comparable, adjusted prior-year period which, as shown in the attached reconciliation table, excluded a non-cash asset impairment charge.

Year-to-date 2012 adjusted net income increased 31.4 percent, to a record $84.2 million. Adjusted diluted earnings per common share were $3.54, making this the best first nine-month results in the company's history.

"Group 1 reported all-time, record-setting revenues, gross profit, net income and diluted earnings per common share in the third quarter, driven by strong growth in all segments of the business, including record results in finance and insurance," said Earl J. Hesterberg, Group 1's president and chief executive officer. "Group 1's new vehicle unit sales continue to outpace industry retail sales, reflecting the strength of our brand mix and strong execution by our operating team. In addition, I am especially proud of the growth our team has delivered in used retail unit sales, where we have significantly outperformed the market this year as well."

Third-Quarter 2012 Results (on a year-over-year basis unless otherwise noted)

  • Setting new all-time records, total gross profit grew 17.1 percent on 25.9 percent higher revenues of $2.0 billion.
  • New vehicle gross profit increased 18.5 percent on 32.3 percent higher revenues, as the company retailed 34.0 percent more units. Average vehicle selling price declined 1.2 percent, to $33,050, as the mix shifted from luxury and trucks to mid-line imports.
  • Retail used vehicle average selling price increased 2.6 percent, to $20,612, and the company retailed 19.5 percent more units, driving the 17.7 percent gross profit and 22.6 percent revenue growth.
  • Parts and service gross profit increased 8.1 percent on revenue growth of 7.1 percent.
  • Finance and insurance gross profit per retail unit increased $64, to an all-time record $1,220, as penetration rates improved in both finance and vehicle service contracts.
  • Selling, general and administrative expenses as a percent of revenues improved 110 basis points, to 10.9 percent.
  • Selling, general and administrative expenses as a percent of gross profit improved to 74.2 percent, from both the prior-year period and the second quarter on a comparable basis, as the company continued to leverage gross profit growth.
  • Operating margin remained flat, at 3.4 percent, from the prior-year and second-quarter periods on a comparable basis.

Corporate Development

During the third quarter, Group 1 purchased a Hyundai franchise in Houston that is estimated to generate $30.0 million in annual revenues. The company also disposed of a Lincoln franchise in Houston that generated trailing-12-month revenues of $17.6 million.

In October, Group 1 acquired a Hyundai dealership in Oklahoma City, Okla., that is estimated to generate $45.0 million in annual revenues. The company also disposed of a Nissan dealership and a Mazda dealership in the Boston area that generated $67.2 million in combined annual revenues during the last 12 months.

Year to date, Group 1 has acquired 14 franchises that are expected to generate $580.0 million in annual revenues and disposed of three franchises that generated $84.8 million of annual revenues.

Third-Quarter Earnings Conference Call

Group 1's senior management will host a conference call today at 10 a.m. ET to discuss the third-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: 10019588

A telephonic replay will be available following the call through Nov. 2 at 9 a.m. ET by dialing:

Domestic: 1.877.344.7529
International: 1.412.317.0088
Conference ID: 10019588

About Group 1 Automotive, Inc.

Group 1 owns and operates 121 automotive dealerships, 158 franchises, and 30 collision centers in the United States and the United Kingdom that offer 32 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 the 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 September 30,


Nine Months Ended September 30,


2012


2011


% Change


2012


2011


% Change

REVENUES:












New vehicle retail sales

$ 1,141,286


$ 862,660


32.3


$ 3,134,591


$ 2,457,255


27.6

Used vehicle retail sales

462,395


377,115


22.6


1,333,603


1,053,609


26.6

Used vehicle wholesale sales

78,424


69,051


13.6


218,415


191,609


14.0

Parts and service

224,990


210,067


7.1


658,404


609,108


8.1

Finance and insurance

69,477


51,496


34.9


192,130


142,255


35.1

Total revenues

1,976,572


1,570,389


25.9


5,537,143


4,453,836


24.3













COST OF SALES:












New vehicle retail sales

1,074,736


806,498


33.3


2,951,379


2,304,057


28.1

Used vehicle retail sales

424,663


345,048


23.1


1,220,628


958,094


27.4

Used vehicle wholesale sales

79,067


69,254


14.2


216,031


187,651


15.1

Parts and service

106,875


100,836


6.0


312,106


289,295


7.9

Total cost of sales

1,685,341


1,321,636


27.5


4,700,144


3,739,097


25.7













GROSS PROFIT

291,231


248,753


17.1


836,999


714,739


17.1













SELLING, GENERAL AND












ADMINISTRATIVE EXPENSES

216,082


188,185


14.8


629,521


547,120


15.1













DEPRECIATION AND












AMORTIZATION EXPENSE

8,096


6,845


18.3


23,074


19,881


16.1













ASSET IMPAIRMENTS

-


3,644


(100.0)


288


4,008


(92.8)













OPERATING INCOME

67,053


50,079


33.9


184,116


143,730


28.1













OTHER EXPENSE:












Floorplan interest expense

(7,942)


(6,964)


14.0


(23,424)


(20,245)


15.7













Other interest expense, net

(9,619)


(8,644)


11.3


(27,849)


(24,811)


12.2

INCOME BEFORE INCOME TAXES

49,492


34,471


43.6


132,843


98,674


34.6













PROVISION FOR INCOME TAXES

(18,157)


(12,977)


39.9


(49,766)


(37,135)


34.0













NET INCOME

$ 31,335


$ 21,494


45.8


$ 83,077


$ 61,539


35.0

























DILUTED INCOME PER SHARE

$ 1.32


$ 0.91


45.1


$ 3.50


$ 2.57


36.2













Weighted average dilutive common shares outstanding

22,458


22,219


1.1


22,501


22,533


(0.1)

Weighted average participating securities

1,245


1,392


(10.6)


1,257


1,392


(9.7)

Total weighted average shares outstanding

23,703


23,611


0.4


23,758


23,925


(0.7)



Group 1 Automotive, Inc.

Consolidated Balance Sheets

(Dollars in thousands)








September 30,


December 31,




2012


2011


% Change

ASSETS:

(Unaudited)











CURRENT ASSETS:






Cash and cash equivalents

$ 38,822


$ 14,895


160.6

Contracts in transit and vehicle receivables, net

150,170


167,507


(10.4)

Accounts and notes receivable, net

98,106


92,775


5.7

Inventories, net

1,107,193


867,470


27.6

Deferred income taxes

19,223


16,012


20.1

Prepaid expenses and other current assets

33,217


16,925


96.3

Total current assets

1,446,731


1,175,584


23.1

PROPERTY AND EQUIPMENT, net

649,811


585,633


11.0

GOODWILL AND INTANGIBLE FRANCHISE RIGHTS

759,068


702,145


8.1

OTHER ASSETS

11,175


12,981


(13.9)

Total assets

$ 2,866,785


$ 2,476,343


15.8







LIABILITIES AND STOCKHOLDERS' EQUITY:












CURRENT LIABILITIES:






Floorplan notes payable - credit facility

$ 910,849


$ 718,945


26.7

Offset account related to floorplan notes payable - credit facility

(128,264)


(109,207)


17.5

Floorplan notes payable - manufacturer affiliates

172,738


155,980


10.7

Current maturities of long-term debt and short-term financing

30,293


14,663


106.6

Current liabilities from interest rate risk management activities

361


7,273


(95.0)

Accounts payable

164,922


148,048


11.4

Accrued expenses

117,892


109,245


7.9

Total current liabilities

1,268,791


1,044,947


21.4

2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of






$182,753 at September 30, 2012 and December 31, 2011)

150,465


144,985


3.8

3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of






$115,000 at September 30, 2012 and December 31, 2011)

79,854


77,401


3.2

MORTGAGE FACILITY, net of current maturities

54,401


38,873


39.9

OTHER REAL ESTATE RELATED AND LONG-TERM DEBT,






net of current maturities

224,787


184,237


22.0

CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE,






net of current maturities

36,587


37,105


(1.4)

DEFERRED INCOME TAXES

90,548


78,459


15.4

LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES

44,708


26,766


67.0

OTHER LIABILITIES

41,047


36,470


12.6

COMMITMENTS AND CONTINGENCIES












TEMPORARY EQUITY - REDEEMABLE EQUITY PORTION OF THE






3.00% CONVERTIBLE SENIOR NOTES

33,313


-


100.0







STOCKHOLDERS' EQUITY:






Common stock

260


260


-

Additional paid-in capital

334,942


363,375


(7.8)

Retained earnings

664,124


591,037


12.4

Accumulated other comprehensive loss

(34,288)


(29,236)


17.3

Treasury stock

(122,754)


(118,336)


3.7

Total stockholders' equity

842,284


807,100


4.4

Total liabilities and stockholders' equity

$ 2,866,785


$ 2,476,343


15.8







KEY DEBT COVENANT METRICS:






Senior secured adjusted leverage ratio (must be less than 3.75)

2.38


2.46



Total adjusted leverage ratio (must be less than 5.50)

3.43


3.65



Fixed charge coverage ratio (must be greater than 1.35)

2.04


1.94





Group 1 Automotive, Inc.

Consolidated Statements of Adjusted Cash Flows from Operating Activities

(Unaudited)

(In thousands)














Three Months Ended September 30,


Nine Months Ended September 30,


2012


2011


% Change


2012


2011


% Change













Net income

$ 31,335


$ 21,494


45.8


$ 83,077


$ 61,539


35.0

Adjustments to reconcile net income to net cash












provided by operating activities:












Asset impairments

-


3,644


(100.0)


288


4,008


(92.8)

Depreciation and amortization

8,096


6,845


18.3


23,074


19,881


16.1

Deferred income taxes

4,680


2,170


115.7


10,755


16,280


(33.9)

Gain on disposition of assets and franchise

(543)


(181)


200.0


(2,131)


(967)


120.4

Stock-based compensation

3,028


2,775


9.1


8,943


8,333


7.3

Amortization of debt discount and issue costs

3,271


3,023


8.2


9,659


8,871


8.9

Other

537


87


517.2


594


(15)


4,060.0

Changes in operating assets and liabilities, net of












effects of acquisitions and dispositions:












Accounts payable and accrued expenses

1,671


14,833


(88.7)


19,294


39,722


(51.4)

Accounts and notes receivable

21,400


(55)


39,009.1


6,680


3,908


70.9

Inventories

(33,063)


58,901


(156.1)


(193,145)


111,704


(272.9)

Contracts-in-transit and vehicle receivables

1,264


5,398


(76.6)


25,135


13,525


85.8

Prepaid expenses and other assets

360


(4,477)


108.0


6,575


(3,454)


290.4

Floorplan notes payable - credit facility (1)

24,214


(83,371)


129.0


175,795


(156,657)


212.2

Floorplan notes payable - manufacturer affiliates (2)

(2,902)


(13,416)


(78.4)


(5,979)


(7,550)


(20.8)

Deferred revenues

(704)


(297)


137.0


(110)


(1,245)


(91.2)

Adjusted net cash provided by operating activities

$ 62,644


$ 17,373


260.6


$ 168,504


$ 117,883


42.9


 

(1)

Excludes net acquisition/(disposition) related activity of $397 and $16,109 and for the three and nine months ended September 30, 2012, respectively, and $20,476 for the nine months ended September 30, 2011.

(2)

Excludes net acquisition/(disposition) related activity of $26,578 and for the nine months ended September 30, 2011.



Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)














Three Months Ended


Nine Months Ended




September 30,


September 30,




2012 (%)


2011 (%)


2012 (%)


2011 (%)

NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:









Region

Geographic Market









East

Massachusetts


9.6


11.2


10.0


11.6


New Jersey


5.0


4.8


5.0


5.5


Georgia


3.8


3.1


3.5


3.5


New Hampshire


2.8


2.8


2.9


3.1


New York


2.5


3.5


3.0


3.7


Louisiana


2.1


2.7


2.5


3.0


Mississippi


1.8


2.0


2.0


2.0


South Carolina


1.7


1.4


1.8


1.4


Florida


1.7


0.7


1.2


0.7


Alabama


0.9


1.4


1.0


1.2


Maryland


0.6


0.7


0.6


0.8




32.5


34.3


33.5


36.5











West

Texas


36.2


38.2


36.7


34.9


California


14.5


12.9


14.5


14.0


Oklahoma


8.0


8.5


7.8


8.3


Kansas


1.4


0.9


1.4


1.0




60.1


60.5


60.4


58.2











International

United Kingdom


7.4


5.2


6.1


5.3




100.0


100.0


100.0


100.0











NEW VEHICLE UNIT SALES BRAND MIX:









Toyota/Scion/Lexus



30.8


28.7


30.9


30.6

Nissan/Infiniti



12.0


15.2


11.9


14.0

Honda/Acura



11.1


9.3


11.2


11.1

BMW/MINI



10.1


13.1


10.7


13.2

Ford



8.8


10.1


9.2


8.5

Volkswagen/Audi/Porsche


8.3


2.8


6.5


2.5

GM



5.5


6.2


5.8


5.3

Daimler



4.3


5.0


4.6


5.5

Chrysler



4.3


5.0


4.4


4.5

Other



4.8


4.6


4.8


4.8




100.0


100.0


100.0


100.0











NEW VEHICLE UNIT SALES OTHER MIX:









Import



54.7


52.1


55.0


54.3

Luxury



27.6


26.7


26.4


27.6

Domestic



17.7


21.2


18.6


18.1




100.0


100.0


100.0


100.0











Car



57.4


53.5


57.0


55.1

Truck



42.6


46.5


43.0


44.9




100.0


100.0


100.0


100.0

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)

(Dollars in thousands, except per unit amounts)
















Three Months Ended September 30,


Nine Months Ended September 30,



2012


2011


% Change


2012


2011


% Change

REVENUES:












New vehicle retail sales

$ 1,141,286


$ 862,660


32.3


$ 3,134,591


$ 2,457,255


27.6

Used vehicle retail sales

462,395


377,115


22.6


1,333,603


1,053,609


26.6

Used vehicle wholesale sales

78,424


69,051


13.6


218,415


191,609


14.0

Total used

540,819


446,166


21.2


1,552,018


1,245,218


24.6

Parts and service

224,990


210,067


7.1


658,404


609,108


8.1

Finance and insurance

69,477


51,496


34.9


192,130


142,255


35.1

Total

$ 1,976,572


$ 1,570,389


25.9


$ 5,537,143


$ 4,453,836


24.3














GROSS MARGIN %:












New vehicle retail sales

5.8


6.5




5.8


6.2



Used vehicle retail sales

8.2


8.5




8.5


9.1



Used vehicle wholesale sales

(0.8)


(0.3)




1.1


2.1



Total used

6.9


7.1




7.4


8.0



Parts and service

52.5


52.0




52.6


52.5



Finance and insurance

100.0


100.0




100.0


100.0



Total

14.7


15.8




15.1


16.0
















GROSS PROFIT:












New vehicle retail sales

$ 66,550


$ 56,162


18.5


$ 183,212


$ 153,198


19.6

Used vehicle retail sales

37,732


32,067


17.7


112,975


95,515


18.3

Used vehicle wholesale sales

(643)


(203)


216.7


2,384


3,958


(39.8)

Total used

37,089


31,864


16.4


115,359


99,473


16.0

Parts and service

118,115


109,231


8.1


346,298


319,813


8.3

Finance and insurance

69,477


51,496


34.9


192,130


142,255


35.1

Total

$ 291,231


$ 248,753


17.1


$ 836,999


$ 714,739


17.1














UNITS SOLD:












Retail new vehicles sold

34,532


25,777


34.0


95,386


74,578


27.9

Retail used vehicles sold

22,433


18,770


19.5


65,186


52,700


23.7

Wholesale used vehicles sold

12,049


9,697


24.3


33,287


27,246


22.2

Total used

34,482


28,467


21.1


98,473


79,946


23.2














AVERAGE RETAIL SALES PRICE:












New vehicle retail

$ 33,050


$ 33,466


(1.2)


$ 32,862


$ 32,949


(0.3)

Used vehicle retail

$ 20,612


$ 20,091


2.6


$ 20,458


$ 19,993


2.3














GROSS PROFIT PER UNIT SOLD:












New vehicle retail sales

$ 1,927


$ 2,179


(11.6)


$ 1,921


$ 2,054


(6.5)

Used vehicle retail sales

1,682


1,708


(1.5)


1,733


1,812


(4.4)

Used vehicle wholesale sales

(53)


(21)


152.4


72


145


(50.3)

Total used

1,076


1,119


(3.8)


1,171


1,244


(5.9)

Finance and insurance (per retail unit)

$ 1,220


$ 1,156


5.5


$ 1,197


$ 1,118


7.1














OTHER: (1)












SG&A expenses

$ 216,082


$ 188,185


14.8


$ 627,942


$ 547,120


14.8

SG&A as % revenues

10.9


12.0




11.3


12.3



SG&A as % gross profit

74.2


75.7




75.0


76.5



Operating margin %

3.4


3.4




3.4


3.3



Pretax margin %

2.5


2.4




2.4


2.3
















FLOORPLAN EXPENSE:












Floorplan interest

$ (7,942)


$ (6,964)


14.0


$ (23,424)


$ (20,245)


15.7

Floorplan assistance

9,204


6,740


36.6


25,276


18,836


34.2

Net floorplan income (expense)

$ 1,262


$ (224)


663.4


$ 1,852


$ (1,409)


231.4



 

(1)

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 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 September 30,


Nine Months Ended September 30,



2012


2011


% Change


2012


2011


% Change

REVENUES:












New vehicle retail sales

$ 1,036,633


$ 862,661


20.2


$ 2,856,681


$ 2,452,455


16.5

Used vehicle retail sales

425,287


377,115


12.8


1,228,597


1,051,812


16.8

Used vehicle wholesale sales

68,160


69,051


(1.3)


192,587


191,528


0.6

Total used

493,447


446,166


10.6


1,421,184


1,243,340


14.3

Parts and service

210,839


210,066


0.4


615,547


607,733


1.3

Finance and insurance

64,996


51,508


26.2


178,771


141,994


25.9

Total

$ 1,805,915


$ 1,570,401


15.0


$ 5,072,183


$ 4,445,522


14.1














GROSS MARGIN %:












New vehicle retail sales

5.7


6.5




5.8


6.2



Used vehicle retail sales

8.3


8.5




8.5


9.1



Used vehicle wholesale sales

(0.7)


(0.3)




1.3


2.1



Total used

7.0


7.1




7.5


8.0



Parts and service

52.3


52.0




52.5


52.5



Finance and insurance

100.0


100.0




100.0


100.0



Total

14.9


15.8




15.3


16.0
















GROSS PROFIT:












New vehicle retail sales

$ 59,171


$ 56,164


5.4


$ 165,138


$ 152,862


8.0

Used vehicle retail sales

35,141


32,066


9.6


104,090


95,246


9.3

Used vehicle wholesale sales

(453)


(203)


123.2


2,445


3,940


(37.9)

Total used

34,688


31,863


8.9


106,535


99,186


7.4

Parts and service

110,183


109,230


0.9


323,420


319,327


1.3

Finance and insurance

64,996


51,508


26.2


178,771


141,994


25.9

Total

$ 269,038


$ 248,765


8.1


$ 773,864


$ 713,369


8.5














UNITS SOLD:












Retail new vehicles sold

31,463


25,777


22.1


87,154


74,414


17.1

Retail used vehicles sold

20,808


18,770


10.9


60,398


52,606


14.8

Wholesale used vehicles sold

10,763


9,697


11.0


29,925


27,232


9.9

Total used

31,571


28,467


10.9


90,323


79,838


13.1














AVERAGE RETAIL SALES PRICE:












New vehicle retail

$ 32,948


$ 33,467


(1.6)


$ 32,777


$ 32,957


(0.5)

Used vehicle retail

$ 20,439


$ 20,092


1.7


$ 20,342


$ 19,994


1.7














GROSS PROFIT PER UNIT SOLD:












New vehicle retail sales

$ 1,881


$ 2,179


(13.7)


$ 1,895


$ 2,054


(7.7)

Used vehicle retail sales

1,689


1,708


(1.1)


1,723


1,811


(4.9)

Used vehicle wholesale sales

(42)


(21)


100.0


82


145


(43.4)

Total used

1,099


1,119


(1.8)


1,179


1,242


(5.1)

Finance and insurance (per retail unit)

$ 1,243


$ 1,156


7.5


$ 1,212


$ 1,118


8.4














OTHER: (2)












SG&A expenses

$ 198,852


$ 188,230


5.6


$ 578,619


$ 546,415


5.9

SG&A as % revenues

11.0


12.0




11.4


12.3



SG&A as % gross profit

73.9


75.7




74.8


76.6



Operating margin %

3.5


3.4




3.4


3.3
















FLOORPLAN EXPENSE:












Floorplan interest

$ (7,364)


$ (6,964)


5.7


$ (21,543)


$ (20,166)


6.8

Floorplan assistance

8,544


6,740


26.8


23,017


18,806


22.4

Net floorplan income (expense)

$ 1,180


$ (224)


626.8


$ 1,474


$ (1,360)


208.4



 

(1)

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 the activities of our corporate office.

(2)

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 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 September 30,


Nine Months Ended September 30,

NET INCOME RECONCILIATION:

2012


2011


% Change


2012


2011


% Change














As reported

$ 31,335


$ 21,494


45.8


$ 83,077


$ 61,539


35.0


After-tax adjustments:














Non-cash asset impairment charges(2)

-


2,309




115


2,534





Net gain on real estate transactions(3)

-


-




(659)


-





Insurance deductibles for hail storm damage (4)

-


-




1,658


-






Adjusted net income (1)

$ 31,335


$ 23,803


31.6


$ 84,191


$ 64,073


31.4





ADJUSTED NET INCOME
ATTRIBUTABLE TO DILUTED

COMMON SHARES
RECONCILIATION:






































Adjusted net income

$ 31,335


$ 23,803


31.6


$ 84,191


$ 64,073


31.4


Less: Adjusted earnings allocated to participating securities

1,641


1,392


17.9


4,432


3,697


19.9


Adjusted net income available to diluted common shares

$ 29,694


$ 22,411


32.5


$ 79,759


$ 60,376


32.1













DILUTED INCOME PER COMMON SHARE RECONCILIATION:

























As reported

$ 1.32


$ 0.91


45.1


$ 3.50


$ 2.57


36.2


After-tax adjustments:














Non-cash asset impairment charges

-


0.10




-


0.11





Net gain on real estate transactions

-


-




(0.03)


-





Insurance deductibles for hail storm damage

-


-




0.07


-






Adjusted diluted income per share (1)

$ 1.32


$ 1.01


30.7


$ 3.54


$ 2.68


32.1
















SG&A RECONCILIATION:

























As reported

$ 216,082


$ 188,185


14.8


$ 629,521


$ 547,120


15.1


Pre-tax adjustments:














Net gain on real estate transactions

-


-




1,071


-





Insurance deductibles for hail storm damage

-


-




(2,650)


-






Adjusted SG&A (1)

$ 216,082


$ 188,185


14.8


$ 627,942


$ 547,120


14.8














SG&A AS % REVENUES:

























Unadjusted

10.9


12.0




11.4


12.3




Adjusted (1)

10.9


12.0




11.3


12.3















SG&A AS % OF GROSS PROFIT:

























Unadjusted

74.2


75.7




75.2


76.5




Adjusted (1)

74.2


75.7




75.0


76.5















OPERATING MARGIN %:

























Unadjusted

3.4


3.2




3.3


3.2




Adjusted (1), (5)

3.4


3.4




3.4


3.3















PRETAX MARGIN %:

























Unadjusted

2.5


2.2




2.4


2.2




Adjusted (1), (5)

2.5


2.4




2.4


2.3















SAME STORE SG&A RECONCILIATION:

























As reported













Pre-tax adjustments:

$ 198,852


$ 188,230


5.6


$ 581,773


$ 546,415


6.5



Loss on real estate transaction

-


-




(504)


-





Insurance deductibles for hail storm damage

-


-




(2,650)


-






Adjusted Same Store SG&A (1)

$ 198,852


$ 188,230


5.6


$ 578,619


$ 546,415


5.9













SAME STORE SG&A AS % REVENUES:

























Unadjusted

11.0


12.0




11.5


12.3




Adjusted (1)

11.0


12.0




11.4


12.3
















SAME STORE SG&A AS % OF GROSS PROFIT:


























Unadjusted

73.9


75.7




75.2


76.6




Adjusted (1)

73.9


75.7




74.8


76.6















SAME STORE OPERATING MARGIN %:

























Unadjusted

3.5


3.2




3.4


3.2




Adjusted (1), (6)

3.5


3.4




3.4


3.3
















Three Months Ended September 30,


Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

2012


2011


% Change


2012


2011


% Change

RECONCILIATION:













Net cash provided by (used in) operating activities

$ 38,430


$ 100,744


(61.9)


$ (7,291)


$ 301,118


(102.4)



Change in floorplan notes

payable-credit facility, excluding

floorplan offset account and net

acquisition and disposition

related activity

24,214


(83,371)




175,795


(156,657)





Change in floorplan notes

payable-manufacturer affiliates

associated with net acquisition

and disposition related activity

-


-




-


(26,578)






Adjusted net cash provided by operating activities(1)

$ 62,644


$ 17,373


260.6


$ 168,504


$ 117,883


42.9


















 

(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items. These adjusted measures are not measures of financial performance under GAAP. As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures. We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations.

(2)

Adjustment is net of tax benefit of $72 for the nine months ended September 30, 2012, and $1,335 and $1,474 for the three and nine months ended September 30, 2011, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.

(3)

Adjustment is net of tax provision of $412 for the nine months ended September 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment.

(4)

Adjustment is net of tax benefit of $992 for the nine months ended September 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment.

(5)

Excludes the impact of non-cash asset impairment charges for all periods, as well as a net gain on real estate transactions and insurance deductibles for hail storm damage in 2012.

(6)

Excludes the impact of Same Store non-cash asset impairment charges of $187 for the nine months ended September 30, 2012, and $3,644 and $3,964 for the three and nine months ended September 30, 2011, respectively. In addition, this excludes the impact of Same Store loss on real estate transaction of $504 and insurance deductibles of $2,650 for the nine months ended September 30, 2012. Adjusted Same Store operating income was $62,569, $53,689, $173,287, and $147,100 for the periods presented respectively.
















 

 


 

SOURCE Group 1 Automotive, Inc.

 

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