Market Overview

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

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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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