Penske Automotive Reports Record Third Quarter 2018 Results

October 25, 2018 6:59 AM | 219 min read |

Penske Automotive Reports Record Third Quarter 2018 Results

Record Income From Continuing Operations Increases 38.0% to $130.1 Million and Earnings Per Share Increases 39.1% to $1.53

Record Adjusted Income From Continuing Operations Increases 25.7% to $118.5 Million

Record Adjusted Earnings Per Share From Continuing Operations Increases 27.3% to $1.40

PR Newswire

BLOOMFIELD HILLS, Mich., Oct. 25, 2018

BLOOMFIELD HILLS, Mich., Oct. 25, 2018 /PRNewswire/ -- Penske Automotive Group, Inc. PAG, an international transportation services company consisting of franchised retail automotive dealerships, stand-alone used vehicle supercenters, heavy and medium duty retail truck dealerships, and distribution of commercial trucks and power systems, today announced record third quarter and record nine months 2018 results. For the three months ended September 30, 2018, income from continuing operations attributable to common shareholders increased 38.0% to $130.1 million, and related earnings per share increased 39.1% to $1.53 when compared to the same period last year. Total revenue increased 2.4% to $5.7 billion, while same-store retail revenue increased 0.2%. Excluding foreign exchange, total revenue increased 2.9%, while same-store retail revenue increased 0.5%. Foreign exchange rates negatively impacted earnings per share attributable to common shareholders by $0.01. As a result of tax reform enacted in 2017, the company's effective tax rate in the third quarter of 2018 was 17.3% compared to 32.2% in the third quarter of 2017.

For the three and nine months ended September 30, 2018, income and earnings per share from continuing operations attributable to common shareholders included a tax benefit of $11.6 million, or $0.14 per share. This benefit relates to the final reconciliation of the income tax benefit related to the enactment of the 2017 U.S. Tax Cuts and Jobs Act. The third quarter 2018 adjustment primarily relates to reductions in the repatriation tax. Excluding this benefit, adjusted income from continuing operations increased 25.7% to $118.5 million, and related earnings per share increased 27.3% to $1.40 for the three months ended September 30, 2018.

"I am particularly pleased to report another quarter of record revenues, income from continuing operations and earnings per share, which continue to demonstrate the benefit of our diversification," said Penske Automotive Group Chairman Roger S. Penske. "The strength of our performance in the third quarter was driven by increases in new vehicle, used vehicle and finance & insurance gross profit per retail unit sold, coupled with a 70 basis-point increase in service and parts gross margin. Further, our U.K. business produced another record quarter on the strength of its premium brand mix and stand-alone used vehicle supercenter operations. Also contributing to the company's record third quarter was the 25.4% same-store retail revenue increase in the company's North American retail commercial truck business and our investment in Penske Truck Leasing."

For the nine months ended September 30, 2018, total record revenue increased 8.5% to $17.3 billion, with a 5.0% increase in same-store retail revenue. Record income from continuing operations attributable to common shareholders increased 31.5% to $372.7 million and related earnings per share increased 32.4% to $4.37 when compared to the same period last year. Excluding foreign exchange, total revenue increased 5.8%, while same-store retail revenue increased 2.3%. Foreign exchange rates positively impacted earnings per share attributable to common shareholders by $0.08. Excluding the tax benefit noted above, record adjusted income from continuing operations increased 27.4% to $361.1 million, and related earnings per share increased 28.2% to $4.23.

Automotive Retail Highlights of the Third Quarter

  • Same-Store Retail Unit Sales -2.2% to 123,799
    • New unit retail sales -6.6%
    • Used unit retail sales +2.1%
  • Same-Store Retail Revenue +0.2%; Excluding Foreign Exchange +0.5%
    • New -4.2%; Used +6.1%; Finance & Insurance +3.5%; Service and Parts +1.7%
  • Same-Store Average Gross Profit Per Unit
    • New $3,030, +$130/unit; Gross Margin 7.6%, +10 basis points
    • Used $1,504, +$62/unit; Gross Margin 5.7%, +0 basis points
    • Finance & Insurance $1,244, +$68/unit

Stand Alone Used SuperCenter Operations

The company operates fourteen stand-alone used vehicle supercenters, five of which are located in the U.S. and nine are located in the U.K., and one vehicle preparation center in the U.K. For the three and nine months ended September 30, 2018, these supercenters retailed 18,568 and 56,073 units of the company's total automotive units retailed, and generated $329.7 million and $1.0 billion in revenue, respectively. The company is in the process of developing four new stand-alone used vehicle supercenters which are expected to open in 2019. The expansion includes two new sites in the U.S. and another two in the U.K.

Retail Commercial Truck Operations

Penske Automotive Group operates twenty-one medium and heavy-duty truck dealership locations in the U.S. and Canada offering primarily Freightliner and Western Star brands. For the three and nine months ended September 30, 2018, total medium and heavy-duty units retailed increased 35.5% (33.8% same-store) and 44.1% (42.8% same-store), respectively. Same-store revenue increased 25.4% for the three months and 35.0% for the nine months ended September 30, 2018.

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. During the third quarter of 2017, the company increased its ownership interests in PTL by 5.5%, bringing our total ownership interest in PTL to 28.9%. The company accounts for its ownership interest in PTL using the equity method of accounting. For the three and nine months ended September 30, 2018, the company recorded $40.7 million and $91.7 million in earnings from this investment compared to $30.1 million and $66.9 million for the same periods last year, respectively.

Dividend and Share Repurchases

On October 17, 2018, the company announced that its Board of Directors increased the dividend to its common stock shareholders to $0.37 per share, the 30th consecutive increase in the quarterly dividend.

For the nine months ended September 30, 2018, the company repurchased 1,252,624 shares for $55.8 million. Approximately $150.0 million remains available to repurchase shares under the company's existing share repurchase authorization.

Conference Call

Penske Automotive Group will host a conference call discussing financial results relating to the third quarter of 2018 on Thursday, October 25, 2018, at 2:00 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial (800) 230‑1074 – [International, please dial (612) 288‑0329]. The call will also be simultaneously broadcast over the Internet through the Investor's section of the Penske Automotive Group website. Additionally, an investor presentation relating to the third quarter 2018 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., 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 26,000 people worldwide and is a member of the Fortune 500 and Russell 2000, and is ranked among the World's Most Admired Companies by Fortune Magazine. For additional information, visit the company's website at www.penskeautomotive.com.

Non-GAAP Financial Measures

This release contains certain non-GAAP financial measures as defined under SEC rules, such as earnings before interest, taxes, depreciation and amortization ("EBITDA"). The company has reconciled these measures to the most directly comparable GAAP measures in the release. The company believes that these widely accepted measures of operating profitability improve the transparency of the company's disclosures and provide a meaningful presentation of the company's results from its core business operations excluding the impact of items not related to the company's ongoing core business operations, and improve the period-to-period comparability of the company's results from its core business operations. These non-GAAP financial measures are not substitutes for GAAP financial results, and should only be considered in conjunction with the company's financial information that is presented in accordance with GAAP.

Caution Concerning Forward Looking Statements

Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s future sales and earnings 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, changes in tariff rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters such as the recent hurricanes, 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 Group's business, markets, conditions and other uncertainties, which could affect Penske Automotive Group's future performance. These risks and uncertainties are addressed in Penske Automotive Group's Form 10‑K for the year ended December 31, 2017, 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.

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Inquiries should contact:





J.D. Carlson

Anthony R. Pordon

Executive Vice President and

Executive Vice President Investor Relations

Chief Financial Officer

and Corporate Development

Penske Automotive Group, Inc.

Penske Automotive Group, Inc.

248-648-2810

248-648-2540

jcarlson@penskeautomotive.com

tpordon@penskeautomotive.com

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Statements of Income

 (Amounts In Millions, Except Per Share Data)

(Unaudited)

















Three Months Ended





Nine Months Ended





September 30,





September 30,





2018



2017



Change





2018



2017



Change

Revenue



$

5,658.6



$

5,524.4



2.4

%





$

17,345.8



$

15,988.9



8.5

%

Cost of Sales





4,806.0





4,701.8



2.2

%







14,739.0





13,574.7



8.6

%

Gross Profit



$

852.6



$

822.6



3.6

%





$

2,606.8



$

2,414.2



8.0

%

SG&A Expenses





662.8





646.1



2.6

%







2,001.3





1,869.8



7.0

%

Depreciation





25.9





24.3



6.6

%







77.2





70.0



10.3

%

Operating Income



$

163.9



$

152.2



7.7

%





$

528.3



$

474.4



11.4

%

Floor Plan Interest Expense





(20.2)





(16.4)



23.2

%







(59.0)





(45.6)



29.4

%

Other Interest Expense





(28.3)





(27.8)



1.8

%







(86.7)





(79.2)



9.5

%

Equity in Earnings of Affiliates





41.7





30.9



35.0

%







95.0





70.9



34.0

%

Income from Continuing Operations Before Income Taxes



$

157.1



$

138.9



13.1

%





$

477.6



$

420.5



13.6

%

Income Taxes





(27.1)





(44.7)



(39.4)

%







(104.7)





(136.0)



(23.0)

%

Income from Continuing Operations



$

130.0



$

94.2



38.0

%





$

372.9



$

284.5



31.1

%

Income (Loss) from Discontinued Operations, net of tax





0.1





0.1



—

%







0.2





(0.3)



nm

%

Net Income



$

130.1



$

94.3



38.0

%





$

373.1



$

284.2



31.3

%

Less: (Loss) Income Attributable to Non-Controlling Interests





(0.1)





(0.1)



—

%







0.2





1.0



(80.0)

%

Net Income Attributable to Common Shareholders



$

130.2



$

94.4



37.9

%





$

372.9



$

283.2



31.7

%









































Amounts Attributable to Common Shareholders:







































Reported Income from Continuing Operations



$

130.0



$

94.2



38.0

%





$

372.9



$

284.5



31.1

%

Less: (Loss) Income Attributable to Non-Controlling Interests





(0.1)





(0.1)



—

%







0.2





1.0



(80.0)

%

Income from Continuing Operations, net of tax



$

130.1



$

94.3



38.0

%





$

372.7



$

283.5



31.5

%

Income (Loss) from Discontinued Operations, net of tax





0.1





0.1



—

%







0.2





(0.3)



nm

%

Net Income Attributable to Common Shareholders



$

130.2



$

94.4



37.9

%





$

372.9



$

283.2



31.7

%

Income from Continuing Operations Per Share



$

1.53



$

1.10



39.1

%





$

4.37



$

3.30



32.4

%

Income Per Share



$

1.53



$

1.10



39.1

%





$

4.37



$

3.30



32.4

%

Weighted Average Shares Outstanding





84.9





86.0



(1.3)

%







85.3





85.9



(0.7)

%









































nm – not meaningful







































 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Balance Sheets

(Amounts In Millions)

(Unaudited)





















September 30,



December 31,





2018



2017

Assets:













Cash and Cash Equivalents



$

37.6



$

45.7

Accounts Receivable, Net





953.4





954.9

Inventories





3,783.4





3,944.1

Other Current Assets





91.8





81.8

Total Current Assets





4,866.2





5,026.5

Property and Equipment, Net





2,178.2





2,108.6

Intangibles





2,164.5





2,134.5

Other Long-Term Assets





1,318.0





1,271.0

Total Assets



$

10,526.9



$

10,540.6















Liabilities and Equity:













Floor Plan Notes Payable



$

2,169.5



$

2,343.2

Floor Plan Notes Payable – Non-Trade





1,359.0





1,418.6

Accounts Payable





633.8





641.6

Accrued Expenses





570.2





523.5

Current Portion Long-Term Debt





92.7





72.8

Liabilities Held for Sale





0.7





0.7

Total Current Liabilities





4,825.9





5,000.4

Long-Term Debt





1,993.3





2,090.4

Other Long-Term Liabilities





1,095.7





1,021.8

Total Liabilities





7,914.9





8,112.6

Equity





2,612.0





2,428.0

Total Liabilities and Equity



$

10,526.9



$

10,540.6















Supplemental Balance Sheet Information













New vehicle days' supply





61





67

Used vehicle days' supply





48





55

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Operations

Selected Data

(Unaudited)



































Three Months Ended



Nine Months Ended







September 30,



September 30,







2018



2017



2018



2017



Geographic Revenue Mix:



























North America





57.9

%



58.9

%



55.4

%



58.6

%

U.K.





34.4

%



33.8

%



36.0

%



33.9

%

Other International





7.7

%



7.3

%



8.6

%



7.5

%

Total





100.0

%



100.0

%



100.0

%



100.0

%





























Revenue: (Amounts in Millions)



























Retail Automotive



$

5,148.5



$

5,085.4



$

15,900.0



$

14,882.5



Retail Commercial Trucks





385.3





299.6





1,016.5





739.8



Commercial Vehicles Australia/Power Systems and Other





124.8





139.4





429.3





366.6



Total



$

5,658.6



$

5,524.4



$

17,345.8



$

15,988.9































Gross Profit: (Amounts in Millions)



























Retail Automotive



$

762.2



$

744.2



$

2,338.5



$

2,198.5



Retail Commercial Trucks





57.8





44.3





156.8





120.7



Commercial Vehicles Australia/Power Systems and Other





32.6





34.1





111.5





95.0



Total



$

852.6



$

822.6



$

2,606.8



$

2,414.2































Gross Margin:



























Retail Automotive





14.8

%



14.6

%



14.7

%



14.8

%

Retail Commercial Trucks





15.0

%



14.8

%



15.4

%



16.3

%

Commercial Vehicles Australia/Power Systems and Other





26.1

%



24.5

%



26.0

%



25.9

%

Total





15.1

%



14.9

%



15.0

%



15.1

%







Three Months Ended



Nine Months Ended







September 30,



September 30,





































2018





2017





2018





2017



Operating Items as a Percentage of Revenue:



























Gross Profit





15.1

%



14.9

%



15.0

%



15.1

%

Selling, General and Administrative Expenses





11.7

%



11.7

%



11.5

%



11.7

%

Operating Income





2.9

%



2.8

%



3.0

%



3.0

%

Income from Continuing Operations Before Income Taxes





2.8

%



2.5

%



2.8

%



2.6

%





























Operating Items as a Percentage of Total Gross Profit:



























Selling, General and Administrative Expenses





77.7

%



78.5

%



76.8

%



77.5

%

Operating Income





19.2

%



18.5

%



20.3

%



19.7

%























Three Months Ended



Nine Months Ended







September 30,



September 30,



















(Amounts in Millions)



2018



2017



2018



2017































EBITDA*



$

211.3



$

191.0



$

641.5



$

569.7



Floorplan Credits



$

11.1



$

10.9



$

29.9



$

29.3



Rent Expense



$

58.4



$

59.3



$

175.3



$

168.1



Capital Expenditures



$

69.7



$

66.7



$

188.5



$

180.1



Stock Repurchases



$

—



$

10.0



$

55.8



$

18.5







* See the following Non-GAAP reconciliation table.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations

Selected Data – Revenue and Gross Profit Mix

(Unaudited)



























Three Months Ended



Nine Months Ended







September 30,



September 30,







2018



2017



2018



2017



Retail Automotive Revenue Mix:



















Premium:



















BMW / MINI



23

%

22

%

22

%

23

%

Audi



12

%

15

%

13

%

14

%

Mercedes-Benz



9

%

10

%

9

%

10

%

Land Rover / Jaguar



9

%

8

%

9

%

8

%

Porsche



5

%

6

%

6

%

6

%

Ferrari / Maserati



3

%

3

%

3

%

3

%

Lexus



3

%

3

%

3

%

3

%

Acura



1

%

1

%

1

%

1

%

Bentley



1

%

1

%

1

%

1

%

Others



2

%

1

%

2

%

1

%

Total Premium



68

%

70

%

69

%

70

%

Volume Non-U.S.:



















Toyota



11

%

10

%

10

%

10

%

Honda



7

%

7

%

6

%

7

%

Volkswagen



4

%

3

%

4

%

3

%

Nissan



1

%

1

%

1

%

1

%

Others



1

%

2

%

2

%

2

%

Total Volume Non-U.S.



24

%

23

%

23

%

23

%

U.S.:



















General Motors / Chrysler / Ford



2

%

3

%

2

%

3

%

Stand-Alone Used



6

%

4

%

6

%

4

%

Total



100

%

100

%

100

%

100

%





















Retail Automotive Geographic Revenue Mix:



















U.S.



56

%

58

%

54

%

58

%

U.K.



38

%

37

%

39

%

36

%

Other International



6

%

5

%

7

%

6

%

Total



100

%

100

%

100

%

100

%





















Retail Automotive Geographic Gross Profit Mix:



















U.S.



59

%

62

%

58

%

62

%

U.K.



35

%

33

%

36

%

32

%

Other International



6

%

5

%

6

%

6

%

Total



100

%

100

%

100

%

100

%

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations

(Unaudited)















































Three Months Ended





Nine Months Ended





September 30,





September 30,





2018



2017



Change





2018



2017



Change

Retail Automotive Units:







































New Retail





58,933





64,365



(8.4)

%







179,266





187,377



(4.3)

%

Used Retail





72,000





65,892



9.3

%







218,371





194,384



12.3

%

Total





130,933





130,257



0.5

%







397,637





381,761



4.2

%









































Retail Automotive Revenue: (Amounts in Millions)







































New Vehicles



$

2,350.2



$

2,480.8



(5.3)

%





$

7,325.6



$

7,189.9



1.9

%

Used Vehicles





1,825.2





1,669.5



9.3

%







5,588.9





4,850.6



15.2

%

Finance and Insurance, Net





158.5





152.0



4.3

%







482.2





436.6



10.4

%

Service and Parts





523.8





520.9



0.6

%







1,615.1





1,540.1



4.9

%

Fleet and Wholesale





290.8





262.2



10.9

%







888.2





865.3



2.6

%

Total Revenue



$

5,148.5



$

5,085.4



1.2

%





$

15,900.0



$

14,882.5



6.8

%









































Retail Automotive Gross Profit: (Amounts in Millions)







































New Vehicles



$

179.8



$

185.2



(2.9)

%





$

552.8



$

552.6



—

%

Used Vehicles





105.3





94.5



11.4

%







327.5





282.4



16.0

%

Finance and Insurance, Net





158.5





152.0



4.3

%







482.2





436.6



10.4

%

Service and Parts





313.2





308.0



1.7

%







959.5





911.4



5.3

%

Fleet and Wholesale





5.4





4.5



20.0

%







16.5





15.5



6.5

%

Total Gross Profit



$

762.2



$

744.2



2.4

%





$

2,338.5



$

2,198.5



6.4

%









































Retail Automotive Revenue Per Vehicle Retailed:







































New Vehicles



$

39,880



$

38,542



3.5

%





$

40,865



$

38,371



6.5

%

Used Vehicles





25,350





25,337



0.1

%







25,593





24,954



2.6

%









































Retail Automotive Gross Profit Per Vehicle Retailed:







































New Vehicles



$

3,050



$

2,877



6.0

%





$

3,084



$

2,949



4.6

%

Used Vehicles





1,462





1,434



2.0

%







1,499





1,453



3.2

%

Finance and Insurance





1,210





1,167



3.7

%







1,212





1,144



5.9

%

Total Variable Gross Profit Per Vehicle (1)





3,388





3,314



2.2

%







3,426





3,331



2.9

%









































Retail Automotive Gross Margin:







































New Vehicles





7.7

%



7.5

%

+20

bps







7.5

%



7.7

%

-20

bps

Used Vehicles





5.8

%



5.7

%

+10

bps







5.9

%



5.8

%

+10

bps

Service and Parts





59.8

%



59.1

%

+70

bps







59.4

%



59.2

%

+20

bps

Fleet and Wholesale





1.9

%



1.7

%

+20

bps







1.9

%



1.8

%

+10

bps

Total Gross Margin





14.8

%



14.6

%

+20

bps







14.7

%



14.8

%

-10

bps









































Retail Automotive Revenue Mix Percentages:







































New Vehicles





45.6

%



48.8

%

-320

bps







46.1

%



48.3

%

-220

bps

Used Vehicles





35.5

%



32.8

%

+270

bps







35.2

%



32.6

%

+260

bps

Finance and Insurance, Net





3.1

%



3.0

%

+10

bps







3.0

%



2.9

%

+10

bps

Service and Parts





10.2

%



10.2

%

---

bps







10.2

%



10.3

%

-10

bps

Fleet and Wholesale





5.6

%



5.2

%

+40

bps







5.5

%



5.9

%

-40

bps

Total





100.0

%



100.0

%











100.0

%



100.0

%













































Retail Automotive Gross Profit Mix Percentages:







































New Vehicles





23.6

%



24.9

%

-130

bps







23.6

%



25.1

%

-150

bps

Used Vehicles





13.8

%



12.7

%

+110

bps







14.0

%



12.8

%

+120

bps

Finance and Insurance, Net





20.8

%



20.4

%

+40

bps







20.6

%



19.9

%

+70

bps

Service and Parts





41.1

%



41.4

%

-30

bps







41.0

%



41.5

%

-50

bps

Fleet and Wholesale





0.7

%



0.6

%

+10

bps







0.8

%



0.7

%

+10

bps

Total





100.0

%



100.0

%











100.0

%



100.0

%









(1)

Calculated by dividing the sum of new vehicle, used vehicle, and finance and insurance gross profit by total retail automotive unit sales.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations Same-Store

(Unaudited)















































Three Months Ended





Nine Months Ended





September 30,





September 30,





2018



2017



Change





2018



2017



Change

Retail Automotive Same-Store Units:







































New Retail





58,463





62,591



(6.6)

%







174,763





179,632



(2.7)

%

Used Retail





65,336





63,986



2.1

%







158,547





155,676



1.8

%

Total





123,799





126,577



(2.2)

%







333,310





335,308



(0.6)

%









































Retail Automotive Same-Store Revenue: (Amounts in Millions)







































New Vehicles



$

2,324.3



$

2,426.9



(4.2)

%





$

7,070.3



$

6,901.2



2.5

%

Used Vehicles





1,729.5





1,630.8



6.1

%







4,617.4





4,242.7



8.8

%

Finance and Insurance, Net





154.1





148.9



3.5

%







413.1





386.1



7.0

%

Service and Parts





520.8





512.1



1.7

%







1,552.7





1,474.8



5.3

%

Fleet and Wholesale





280.4





255.7



9.7

%







738.3





764.3



(3.4)

%

Total Revenue



$

5,009.1



$

4,974.4



0.7

%





$

14,391.8



$

13,769.1



4.5

%









































Retail Automotive Same-Store Gross Profit: (Amounts in Millions)







































New Vehicles



$

177.2



$

181.5



(2.4)

%





$

528.9



$

529.8



(0.2)

%

Used Vehicles





98.3





92.3



6.5

%







256.9





234.3



9.6

%

Finance and Insurance, Net





154.1





148.9



3.5

%







413.1





386.1



7.0

%

Service and Parts





308.1





302.0



2.0

%







904.9





863.8



4.8

%

Fleet and Wholesale





5.1





4.4



15.9

%







11.9





13.8



(13.8)

%

Total Gross Profit



$

742.8



$

729.1



1.9

%





$

2,115.7



$

2,027.8



4.3

%









































Retail Automotive Same-Store Revenue Per Vehicle Retailed:







































New Vehicles



$

39,757



$

38,774



2.5

%





$

40,457



$

38,419



5.3

%

Used Vehicles





26,471





25,487



3.9

%







29,123





27,254



6.9

%









































Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:







































New Vehicles



$

3,030



$

2,900



4.5

%





$

3,027



$

2,949



2.6

%

Used Vehicles





1,504





1,442



4.3

%







1,620





1,505



7.6

%

Finance and Insurance





1,244





1,176



5.8

%







1,240





1,151



7.7

%

Total Variable Gross Profit Per Vehicle (1)





3,470





3,339



3.9

%







3,597





3,430



4.9

%









































Retail Automotive Same-Store Gross Margin:







































New Vehicles





7.6

%



7.5

%

+10

bps







7.5

%



7.7

%

-20

bps

Used Vehicles





5.7

%



5.7

%

---

bps







5.6

%



5.5

%

+10

bps

Service and Parts





59.2

%



59.0

%

+20

bps







58.3

%



58.6

%

-30

bps

Fleet and Wholesale





1.8

%



1.7

%

+10

bps







1.6

%



1.8

%

-20

bps

Total Gross Margin





14.8

%



14.7

%

+10

bps







14.7

%



14.7

%

---

bps









































Retail Automotive Revenue Mix Percentages:







































New Vehicles





46.4

%



48.8

%

-240

bps







49.1

%



50.1

%

-100

bps

Used Vehicles





34.5

%



32.8

%

+170

bps







32.1

%



30.8

%

+130

bps

Finance and Insurance, Net





3.1

%



3.0

%

+10

bps







2.9

%



2.8

%

+10

bps

Service and Parts





10.4

%



10.3

%

+10

bps







10.8

%



10.7

%

+10

bps

Fleet and Wholesale





5.6

%



5.1

%

+50

bps







5.1

%



5.6

%

-50

bps

Total





100.0

%



100.0

%











100.0

%



100.0

%













































Retail Automotive Gross Profit Mix Percentages:







































New Vehicles





23.9

%



24.9

%

-100

bps







25.0

%



26.1

%

-110

bps

Used Vehicles





13.2

%



12.7

%

+50

bps







12.1

%



11.6

%

+50

bps

Finance and Insurance, Net





20.7

%



20.4

%

+30

bps







19.5

%



19.0

%

+50

bps

Service and Parts





41.5

%



41.4

%

+10

bps







42.8

%



42.6

%

+20

bps

Fleet and Wholesale





0.7

%



0.6

%

+10

bps







0.6

%



0.7

%

-10

bps

Total





100.0

%



100.0

%











100.0

%



100.0

%









(1)

Calculated by dividing the sum of new vehicle, used vehicle, and finance and insurance gross profit by total retail automotive unit sales.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Commercial Truck Operations

 (Unaudited)













































Three Months Ended





Nine Months Ended





September 30,





September 30,





2018



2017



Change





2018



2017



Change

Retail Commercial Truck Units:







































New Retail





2,431





1,757



38.4

%







6,107





4,060



50.4

%

Used Retail





579





464



24.8

%







1,516





1,230



23.3

%

Total





3,010





2,221



35.5

%







7,623





5,290



44.1

%









































Retail Commercial Truck Revenue: (Amounts in Millions)







































New Vehicles



$

249.4



$

184.3



35.3

%





$

630.5



$

411.5



53.2

%

Used Vehicles





32.5





25.7



26.5

%







86.3





67.9



27.1

%

Finance and Insurance, Net





2.9





2.1



38.1

%







9.0





6.6



36.4

%

Service and Parts





93.1





83.3



11.8

%







275.7





244.6



12.7

%

Other





7.4





4.2



76.2

%







15.0





9.2



63.0

%

Total Revenue



$

385.3



$

299.6



28.6

%





$

1,016.5



$

739.8



37.4

%









































Retail Commercial Truck Gross Profit: (Amounts in

Millions)







































New Vehicles



$

12.0



$

7.9



51.9

%





$

28.2



$

17.4



62.1

%

Used Vehicles





4.0





2.6



53.8

%







9.8





6.1



60.7

%

Finance and Insurance, Net





2.9





2.1



38.1

%







9.0





6.6



36.4

%

Service and Parts





36.4





31.7



14.8

%







106.3





90.8



17.1

%

Other





2.5





—



nm









3.5





(0.2)



nm



Total Gross Profit



$

57.8



$

44.3



30.5

%





$

156.8



$

120.7



29.9

%









































Retail Commercial Truck Revenue Per Vehicle Retailed:







































New Vehicles



$

102,610



$

104,874



(2.2)

%





$

103,257



$

101,332



1.9

%

Used Vehicles





56,214





55,387



1.5

%







56,943





55,158



3.2

%









































Retail Commercial Truck Gross Profit Per Vehicle Retailed:







































New Vehicles



$

4,952



$

4,479



10.6

%





$

4,620



$

4,286



7.8

%

Used Vehicles





6,986





5,500



27.0

%







6,476





4,912



31.8

%

Finance and Insurance





948





959



(1.1)

%







1,183





1,244



(4.9)

%

Total Variable Gross Profit Per Vehicle (1)





6,279





5,673



10.7

%







6,166





5,690



8.4

%









































Retail Commercial Truck Gross Margin:







































New Vehicles





4.8

%



4.3

%

+50

bps







4.5

%



4.2

%

+30

bps

Used Vehicles





12.3

%



10.1

%

+220

bps







11.4

%



9.0

%

+240

bps

Service and Parts





39.1

%



38.1

%

+100

bps







38.6

%



37.1

%

+150

bps

Total Gross Margin





15.0

%



14.8

%

+20

bps







15.4

%



16.3

%

-90

bps









































Retail Commercial Truck Revenue Mix Percentages:







































New Vehicles





64.7

%



61.5

%

+320

bps







62.0

%



55.6

%

+640

bps

Used Vehicles





8.4

%



8.6

%

-20

bps







8.5

%



9.2

%

-70

bps

Finance and Insurance, Net





0.8

%



0.7

%

+10

bps







0.9

%



0.9

%

---

bps

Service and Parts





24.2

%



27.8

%

-360

bps







27.1

%



33.1

%

-600

bps

Other





1.9

%



1.4

%

+50

bps







1.5

%



1.2

%

+30

bps

Total





100.0

%



100.0

%











100.0

%



100.0

%













































Retail Commercial Truck Gross Profit Mix Percentages:







































New Vehicles





20.8

%



17.8

%

+300

bps







18.0

%



14.4

%

+360

bps

Used Vehicles





6.9

%



5.9

%

+100

bps







6.3

%



5.1

%

+120

bps

Finance and Insurance, Net





5.0

%



4.7

%

+30

bps







5.7

%



5.5

%

+20

bps

Service and Parts





63.0

%



71.6

%

-860

bps







67.8

%



75.2

%

-740

bps

Other





4.3

%



—

%

+430

bps







2.2

%



(0.2)

%

+240

bps

Total





100.0

%



100.0

%











100.0

%



100.0

%









(1)

Calculated by dividing the sum of new vehicle, used vehicle, and finance and insurance gross profit by total retail commercial truck unit sales.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Commercial Truck Operations Same-Store

 (Unaudited)













































Three Months Ended





Nine Months Ended





September 30,





September 30,





2018



2017



Change





2018



2017



Change

Retail Commercial Truck Same-Store Units:







































New Retail





2,393





1,757



36.2

%







6,039





4,060



48.7

%

Used Retail





578





464



24.6

%







1,514





1,230



23.1

%

Total





2,971





2,221



33.8

%







7,553





5,290



42.8

%









































Retail Commercial Truck Same-Store Revenue: (Amounts in

Millions)







































New Vehicles



$

243.2



$

184.3



32.0

%





$

620.7



$

411.5



50.8

%

Used Vehicles





32.5





25.7



26.5

%







86.2





67.9



27.0

%

Finance and Insurance, Net





2.8





2.1



33.3

%







7.2





6.6



9.1

%

Service and Parts





91.8





83.3



10.2

%







272.7





244.6



11.5

%

Other





5.4





4.2



28.6

%







11.8





9.2



28.3

%

Total Revenue



$

375.7



$

299.6



25.4

%





$

998.6



$

739.8



35.0

%









































Retail Commercial Truck Same-Store Gross Profit: (Amounts in

Millions)







































New Vehicles



$

11.7



$

7.9



48.1

%





$

27.6



$

17.4



58.6

%

Used Vehicles





4.0





2.6



53.8

%







9.8





6.1



60.7

%

Finance and Insurance, Net





2.8





2.1



33.3

%







7.2





6.6



9.1

%

Service and Parts





35.8





31.7



12.9

%







104.9





90.8



15.5

%

Other





0.5





—



nm









0.7





(0.2)



nm



Total Gross Profit



$

54.8



$

44.3



23.7

%





$

150.2



$

120.7



24.4

%









































Retail Commercial Truck Same-Store Revenue Per Vehicle Retailed:







































New Vehicles



$

101,629



$

104,874



(3.1)

%





$

102,786



$

101,332



1.4

%

Used Vehicles





56,270





55,387



1.6

%







56,962





55,158



3.3

%









































Retail Commercial Truck Same-Store Gross Profit Per Vehicle

Retailed:







































New Vehicles



$

4,898



$

4,479



9.4

%





$

4,572



$

4,286



6.7

%

Used Vehicles





6,995





5,500



27.2

%







6,471





4,912



31.7

%

Finance and Insurance





937





959



(2.3)

%







952





1,244



(23.5)

%

Total Variable Gross Profit Per Vehicle (1)





6,227





5,673



9.8

%







5,905





5,690



3.8

%









































Retail Commercial Truck Same-Store Gross Margin:







































New Vehicles





4.8

%



4.3

%

+50

bps







4.4

%



4.2

%

+20

bps

Used Vehicles





12.3

%



10.1

%

+220

bps







11.4

%



9.0

%

+240

bps

Service and Parts





39.0

%



38.1

%

+90

bps







38.5

%



37.1

%

+140

bps

Total Gross Margin





14.6

%



14.8

%

-20

bps







15.0

%



16.3

%

-130

bps









































Retail Commercial Truck Revenue Mix Percentages:







































New Vehicles





64.7

%



61.5

%

+320

bps







62.2

%



55.6

%

+660

bps

Used Vehicles





8.7

%



8.6

%

+10

bps







8.6

%



9.2

%

-60

bps

Finance and Insurance, Net





0.7

%



0.7

%

---

bps







0.7

%



0.9

%

-20

bps

Service and Parts





24.4

%



27.8

%

-340

bps







27.3

%



33.1

%

-580

bps

Other





1.5

%



1.4

%

+10

bps







1.2

%



1.2

%

---

bps

Total





100.0

%



100.0

%











100.0

%



100.0

%













































Retail Commercial Truck Gross Profit Mix Percentages:







































New Vehicles





21.4

%



17.8

%

+360

bps







18.4

%



14.4

%

+400

bps

Used Vehicles





7.3

%



5.9

%

+140

bps







6.5

%



5.1

%

+140

bps

Finance and Insurance, Net





5.1

%



4.7

%

+40

bps







4.8

%



5.5

%

-70

bps

Service and Parts





65.3

%



71.6

%

-630

bps







69.8

%



75.2

%

-540

bps

Other





0.9

%



—

%

+90

bps







0.5

%



(0.2)

%

+70

bps

Total





100.0

%



100.0

%











100.0

%



100.0

%









(1)

Calculated by dividing the sum of new vehicle, used vehicle, and finance and insurance gross profit by total retail commercial truck unit sales.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Non-GAAP Reconciliations

(Unaudited)





The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three and nine months ended September 30, 2018 and 2017:





Income from Continuing Operations:



































Three Months Ended





 

Nine Months Ended







September 30,





September 30,



(Amounts in Millions)



2018





2017



% Change





2018





2017



% Change













































Income from Continuing Operations



$

130.1





$

94.3



38.0

%



$

372.7





$

283.5



31.5

%

Less: Income tax benefit (1)





(11.6)







—



nm







(11.6)







—



nm



Adjusted Income from Continuing Operations



$

118.5





$

94.3



25.7

%



$

361.1





$

283.5



27.4

%





















































































Earnings Per Share:























































































Three Months Ended





Nine Months Ended







September 30,





September 30,







2018





2017



% Change





2018





2017



% Change













































Earnings Per Share from Continuing Operations



$

1.53





$

1.10



39.1

%



$

4.37





$

3.30



32.4

%

Less: Income tax benefit (1)





(0.14)







—



nm







(0.14)







—



nm



Adjusted Earnings Per Share from Continuing Operations



$

1.40

(2)



$

1.10



27.3

%



$

4.23





$

3.30



28.2

%



(1)    This benefit relates to the final reconciliation of the income tax benefit related to the enactment of the 2017 U.S. Tax Cuts and Jobs Act.

(2)     Earnings per share amounts may not sum due to rounding.





The following tables reconcile reported net income to earnings before interest, taxes, depreciation and amortization ("EBITDA") for the three and nine months ended September 30, 2018 and 2017:





























Three Months Ended

































September 30,



2018 vs. 2017

(Amounts in Millions)





















2018



2017



Change



% Change













































Net Income





















$

130.1



$

94.3



$

35.8



38.0

%

Add: Depreciation























25.9





24.3





1.6



6.6

%

Other Interest Expense























28.3





27.8





0.5



1.8

%

Income Taxes























27.1





44.7





(17.6)



(39.4)

%

(Income) from Discontinued Operations, net of tax























(0.1)





(0.1)





—



—



EBITDA





















$

211.3



$

191.0



$

20.3



10.6

%



































































Nine Months Ended



































September 30,



2018 vs. 2017

(Amounts in Millions)





















2018



2017



Change



% Change













































Net Income





















$

373.1



$

284.2



$

88.9



31.3

%

Add: Depreciation























77.2





70.0





7.2



10.3

%

Other Interest Expense























86.7





79.2





7.5



9.5

%

Income Taxes























104.7





136.0





(31.3)



(23.0)

%

(Income) Loss from Discontinued Operations, net of tax























(0.2)





0.3





(0.5)



nm



EBITDA





















$

641.5



$

569.7



$

71.8



12.6

%













































nm – not meaningful











































 

Penske Automotive Group logo. (PRNewsFoto/Penske Automotive Group)

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/penske-automotive-reports-record-third-quarter-2018-results-300737587.html

SOURCE Penske Automotive Group, Inc.

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