SOURCE: Group 1 Automotive Inc.

Group 1 Automotive Inc.

October 27, 2009 07:00 ET

Group 1 Automotive Doubles Profitability in Third Quarter 2009

Operating Margins Improved; Full-Year Guidance Revised

HOUSTON, TX--(Marketwire - October 27, 2009) -  Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today reported third-quarter adjusted net income from continuing operations of $16.8 million, or $0.71 per diluted share, for the period ended Sept. 30, 2009, as compared to the 2008 adjusted results of $8.2 million, or $0.37 per diluted share. For comparison purposes, as shown in the attached reconciliation table, the adjusted 2009 third-quarter results excluded net after-tax gains of $1.5 million, or $0.07 per diluted share, for an income tax benefit related to tax elections that reduced the tax liability for prior-period items; non-cash asset impairment charges, primarily related to real estate holdings; and, gains on debt redemptions. The adjusted 2008 third-quarter results excluded net after-tax charges of $30.0 million, or $1.33 per diluted share, for non-cash asset impairment and lease termination charges, and gains on debt redemptions. Including the one-time items, net income from continuing operations was $18.3 million, or $0.78 per diluted share, for the quarter ended Sept. 30, 2009.

"Our strong third-quarter performance validates that Group 1's business model is flexible enough to react quickly to changes in market conditions," said Earl J. Hesterberg, Group 1's president and chief executive officer. "The cost reductions and inventory controls we implemented in the first half of the year have positioned Group 1 to benefit from any improvement in new vehicle volumes, as demonstrated this quarter."

Third-Quarter Operating Highlights

  • Group 1 retailed 25,057 new vehicles during the quarter, including 4,874 under the government's CARS program.
  • Group 1's same-store gross margin improved 100 basis points, to 17.0 percent, from third quarter 2008. The gross margin improvement was attributed to improved new vehicle, total used vehicle and the parts and service margins, as well as the continued mix shift to the more profitable segments of the business.
  • Same-store new vehicle margins expanded 90 basis points from the second-quarter, to 6.7 percent, as lower inventory and stronger demand combined to provide a more favorable selling environment.
  • Same-store used vehicle gross profit improved $228 per wholesale unit, from the prior-year quarter, as limited supply increased valuations, while retail gross margins fell 30 basis points, to 10.3 percent, as more vehicles were sourced at auction.
  • Group 1's same-store parts and service business improved on both a year-over-year and sequential basis, with a gross margin of 53.7 percent.
  • On a consolidated basis, Group 1's selling, general and administrative (SG&A) expenses were reduced $26.7 million in the quarter, bringing the total expense reduction to $112.8 million year to date.
  • Operating margin improved to 3.4 percent.
  • Generated $54.8 million in adjusted operating cash flow during the quarter and $100.7 million year to date.

Corporate Development Update
Year to date, Group 1 has added three franchises with estimated annual revenues of approximately $46.7 million and has disposed of eight franchises with annual revenues of $126.2 million.

Group 1's Balance Sheet Strengthened
Group 1 reported its new vehicle inventory stood at $298.7 million on Sept. 30, reflecting a $75.7 million reduction from the second quarter and a $370.6 million reduction from the prior-year period. In addition, the company reduced non-floorplan debt by $37.1 million during the quarter, primarily reflecting the payoff of its outstanding acquisition line borrowings of $30.0 million and repurchases of $5.0 million of its 2.25 percent convertible bonds. The company ended the quarter with overall immediately available funds of $85.9 million and overall available liquidity of $232.8 million.

"With the strong operating cash that the company generated this year, we continued to strengthen Group 1's balance sheet by reducing total non-floorplan debt by $112.4 million during the nine-month period," said John C. Rickel, Group 1's senior vice president and chief financial officer.

2009 Full-Year Guidance Revised
Group 1 has revised its 2009 full-year earnings guidance to a range of $1.66 to $1.76 per diluted share under the following assumptions:

  • Industry seasonally adjusted annual sales rate (SAAR) of 10.0 to 10.2 million vehicles
  • Total year-over-year reduction in SG&A expenses of $120 million at projected SAAR levels
  • Tax rate of 38.0 percent
  • Estimated average diluted shares outstanding of 23.4 million
  • Capital expenditures of approximately $20 million
  • Guidance includes the impact of APB 14-1 and excludes the impact of future acquisitions, dispositions with their potential exit costs, and any potential one-time items

    Fourth-quarter same-store assumptions:
  • New vehicle margins of 6.0 percent to 6.5 percent
  • Used vehicle retail margins of 10.0 percent to 10.5 percent
  • Used vehicle wholesale margins at about break-even
  • Flat parts and service revenues
  • Finance and insurance gross profit of $925 to $950 per retail unit

Third-Quarter Earnings Conference Call (REPLAY NUMBER UPDATED)
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 2009 outlook and strategy.

The conference call will be simulcast live on the Internet at www.group1auto.com through the Investor Relations section. 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: 877.795.3648
International: 719.325.4752
Participant Passcode: 8845933

A telephonic replay will be available following the call through Nov. 3 by dialing:

Domestic: 888.203.1112
International: 719.457.0820 (UPDATED)
Replay Passcode: 8845933

About Group 1 Automotive, Inc.
Group 1 owns and operates 96 automotive dealerships, 128 franchises, and 23 collision service centers in the United States and the United Kingdom that offer 31 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts.

Group 1 Automotive can be reached on the Internet at www.group1auto.com.

This press release contains "forward-looking statements," which are statements related to future, not past, events. 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" or "will." Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause 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. These factors, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K under the headings "Business -- Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." We urge you to carefully consider this information. We undertake no duty to update our forward-looking statements, including our earnings outlook.

 

                                 
                                
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,
        2009   2008   % Change 2009   2008   % Change
REVENUES:                                  
New vehicle retail sales     $ 728,089   $ 877,669   (17.0 ) % $ 1,883,973   $ 2,737,732     (31.2 ) %
Used vehicle retail sales       254,716     262,443   (2.9 )   729,345     865,031     (15.7 )
Used vehicle wholesale sales       43,151     58,689   (26.5 )   112,536     193,412     (41.8 )
Parts and service       183,254     188,576   (2.8 )   547,224     572,165     (4.4 )
Finance and insurance       37,509    46,597   (19.5 )   102,213     152,012     (32.8 )
  Total revenues       1,246,719     1,433,974   (13.1 ) %   3,375,291     4,520,352     (25.3 ) %
                                     
COST OF SALES:                                  
New vehicle retail sales       679,470     821,964   (17.3 ) %   1,770,900     2,561,863     (30.9 ) %
Used vehicle retail sales       228,445     234,527   (2.6 )   652,640     771,132     (15.4 )
Used vehicle wholesale sales       41,872     59,623   (29.8 )   109,205     195,081     (44.0 )
Parts and service       84,911     88,241   (3.8 )   256,756     263,667     (2.6 )
  Total cost of sales       1,034,698     1,204,355   (14.1 ) %   2,789,501     3,791,743     (26.4 ) %
                                     
GROSS PROFIT       212,021     229,619   (7.7 ) %   585,790     728,609     (19.6 )%
                                     
SELLING, GENERAL AND                                  
ADMINISTRATIVE EXPENSES     162,466     189,209   (14.1 )   466,813     579,608     (19.5 )
                                    
DEPRECIATION AND                                  
AMORTIZATION EXPENSE     6,666     6,734   (1.0 )   19,541     19,049     2.6
                                     
ASSET IMPAIRMENTS       702    48,086   (98.5 )   2,837     48,086     (94.1 )
                                     
OPERATING INCOME (LOSS)     42,187     (14,410 )   392.8 %   96,599     81,866     18.0 %
                                    
OTHER INCOME (EXPENSE):                                
Floorplan interest expense       (7,523 )     (11,236 )   (33.0 )   (24,342 )     (35,636 )     (31.7 )
                                     
Other interest expense, net       (7,318 )     (9,202 )   (20.5 )   (21,857 )     (27,981 )     (21.9 )
                                     
Gain on redemption of long-term debt   598     495   20.8   8,211     904     808.3
                                     
Other income (expense), net       (4)     (41 )   (90.2 )   (6 )     273     (102.2 )
                             
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES     27,940     (34,394 )   181.2 %   58,605     19,426     201.7 %
                                    
BENEFIT FROM (PROVISION FOR) INCOME TAXES   (9,600 )     12,577   (176.3 )   (21,808 )     (8,059 )     170.6
                                     
                                     
INCOME (LOSS) FROM CONTINUING OPERATIONS   18,340     (21,817 )   184.1 %   36,797     11,367     223.7 %
                                     
DISCONTINUED OPERATIONS:                                
Loss related to discontinued operations   -     -   -   -     (3,481 )     (100.0 )
Income tax benefit related to loss on                             
discontinued operations       -     -   -   -     1,478     (100.0 )
LOSS RELATED TO  DISCONTINUED OPERATIONS   -     -   -   -     (2,003 )     (100.0 )
                                     
NET INCOME (LOSS)     $ 18,340   $ (21,817 )   184.1 % $ 36,797   $ 9,364   $ 293.0 %
                                     
DILUTED INCOME (LOSS) PER SHARE:                              
Income (loss) per share from continuing operations $ 0.78   $ (0.96 )   181.3 % $1.58   $ 0.50     216.0 %
Loss per share related to discontinued operations   -     -   -   -     (0.09 )     (100.0 )
Income (loss) per share     $ 0.78   $ (0.96 )   181.3 % $ 1.58   $ 0.41     285.4 %
                                     
Weighted average diluted shares outstanding   23,503     22,716   3.5 %   23,240     22,641     2.6 %
                       
                       
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
                       
            September 30,   December 31,      
            2009   2008   % Change
            (Unaudited)          
ASSETS:                   
                         
CURRENT ASSETS:                
  Cash and cash equivalents   $ 14,882   $ 23,144   (35.7 ) %
  Contracts in transit and vehicle receivables, net     67,045     102,834   (34.8 )
  Accounts and notes receivable, net     52,667     67,350   (21.8 )
  Inventories       471,189     845,944   (44.3 )
  Deferred income taxes    15,504     18,474   (16.1 )
  Prepaid expenses and other current assets     31,781     38,878   (18.3 )
    Total current assets     653,068     1,096,624   (40.4 )
PROPERTY AND EQUIPMENT, net     492,191     514,891   (4.4 )
GOODWILL AND OTHER INTANGIBLES     656,013     655,784   0.0
OTHER ASSETS       17,924     20,815   (13.9 )
    Total assets   $ 1,819,196   $ 2,288,114   (20.5 ) %
                        
LIABILITIES AND STOCKHOLDERS' EQUITY:                
                         
CURRENT LIABILITIES:                
  Floorplan notes payable - credit facility   $ 374,441   $ 738,551   (49.3 ) %
    Offset account related to floorplan notes payable - credit facility     (71,010 )     (44,859 )   58.3
  Floorplan notes payable - manufacturer affiliates     89,654     128,580  (30.3 )
  Current maturities of long-term debt     13,663     13,594   0.5
  Accounts payable     69,633     74,235   (6.2 )
  Accrued expenses     89,518     94,395   (5.2 )
    Total current liabilities     565,899     1,004,496   (43.7 )
2.25% CONVERTIBLE SENIOR NOTES (aggregate principal          
  of $182,753 and $224,500, respectively)     130,449       155,333     (16.0 )  
8.25% SENIOR SUBORDINATED NOTES     73,189     72,962   0.3
MORTGAGE FACILITY, net of current maturities     179,669     168,583   6.6
OTHER REAL ESTATE RELATED AND LONG-TERM DEBT,          
  net of current maturities     19,670       50,444     (61.0 )  
CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE,          
  net of current maturities     38,125       39,401     (3.2 )  
ACQUISITION LINE     -     50,000   (100.0 )
DEFERRED INCOME TAXES     25,643     2,768   826.4
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES     37,455     44,655   (16.1 )
OTHER LIABILITIES     26,925     27,135   (0.8 )
DEFERRED REVENUES     6,743     10,220   (34.0 )
                         
STOCKHOLDERS' EQUITY:                
  Common stock     261     261   -
  Additional paid-in capital     348,913     351,405   (0.7 )
  Retained earnings     473,884    437,087   8.4
  Accumulated other comprehensive loss     (30,615 )     (38,109 )   (19.7 )
  Treasury stock     (77,014 )     (88,527 )   (13.0 )
    Total stockholders' equity     715,429     662,117   8.1
    Total liabilities and stockholders' equity   $ 1,819,196   $ 2,288,114   (20.5 ) %
                         
                         
KEY DEBT COVENANT METRICS: *                
  Senior secured leverage ratio (must be less than 2.75)     1.11     1.49    
  Total leverage ratio (must be less than 4.50)     2.80     3.46    
  Fixed charge coverage ratio (must be greater than 1.25)     1.93     1.59    
  Current ratio (must be greater than 1.15)     1.39     1.18    
                         
  * Refer to website, www.group1auto.com, for debt covenant calculation definitions.
         
 
 
Group 1 Automotive, Inc.
Consolidated Statements of Adjusted Cash Flows from Continuing Operations
(Unaudited)
(In thousands)
                   
      Three Months Ended September 30, Nine Months Ended September 30,
      2009   2008 2009   2008
                 
Income from continuing operations    

18,340
  $ (21,817 ) $ 36,797   $ 11,367
 
 
 
$
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:                      
  Asset Impairments     702     48,086   2,837     48,086
  Depreciation and amortization     6,666     6,734   19,541     19,049
  Deferred income taxes     8,177     (11,533 )   23,078     9,279
  Amortization of debt discount and issue costs     1,270     2,593   5,413     7,664
  Stock based compensation     1,940     1,508   7,367     4,894
  Excess tax benefits from stock-based compensation     (175 )     454   348     276
  Gain on redemption of long-term debt     (598 )     (495 )   (8,211 )     (904 )
  Other     708     (426 )   (1,213 )     (137 )
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:                      
  Contracts-in-transit and vehicle receivables     11,762     57,025   35,909     101,207
  Inventories     69,500     72,535   373,146     28,261
  Floorplan notes payable - manufacturer affiliates     4,265    (29,744 )   (39,454 )     (33,266 )
  Floorplan notes payable - credit facility     (83,806 )     (66,949 )   (364,109 )     (10,366 )
  Accounts payable and accrued expenses     2,251     (16,615 )   (15,478 )     (17,043 )
  Accounts and notes receivable     6,997     11,663   20,865     10,693
  Deferred revenues     (913 )     (1,867 )   (3,477 )     (4,705 )
  Prepaid expenses and other assets     7,668     3,108   7,304    18,320
Adjusted net cash provided by operating activities, from continuing operations $ 54,754   $ 54,260 $ 100,663   $ 192,675
                             
                             
                             
Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
                             
        Three Months Ended,     Nine Months Ended,  
        September 30,    September 30,  
        2009   2008     2009     2008  
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:                        
  Region Geographic Market                        
  Eastern Massachusetts   16.6 %   12.9 %   15.2 %   12.1 %
    New Jersey   6.2     7.1     6.6     6.9  
    New Hampshire   4.6     3.9     4.1     3.6  
    New York   3.5     4.0     4.1     4.2  
   Georgia   3.5     3.4     3.6     3.4  
    Louisiana   3.1     2.9     3.2     3.2  
    Mississippi   1.9     1.6     1.8     1.6  
    Florida   1.3     2.3     1.6     2.5  
    Maryland   0.9     0.8     0.9     0.5  
    Alabama   0.6     0.9     0.6     0.9  
    South Carolina   0.3     0.3     0.3     0.3  
        42.5    40.1     42.0     39.2  
                             
  Central Texas   31.6     31.0     32.1     32.1  
    Oklahoma   8.2     9.6     8.4     9.5  
    Kansas   1.2     1.4     1.2     1.3  
        41.0     42.0     41.7     42.9  
                             
  Western California   14.2     16.2     14.1    16.2  
                             
  International United Kingdom   2.3     1.7     2.2     1.7  
        100.0 %   100.0 %   100.0 %   100.0 %
                             
NEW VEHICLE UNIT SALES BRAND MIX:                        
  Toyota/Scion/Lexus     38.4 %   34.2 %   36.2 %   34.9 %
  Nissan/Infiniti     14.1     13.5     12.9     13.1  
  Honda/Acura    12.2     14.5     13.0     14.2  
  BMW/Mini     9.2     9.4     9.5     8.5  
  Ford     8.0     9.8     8.6     10.3  
  Mercedes-Benz     4.8     6.0     5.4     5.7  
  Chrysler     4.4     5.1     5.7     5.9  
  GM     3.4     4.9     3.7     4.8  
  Other     5.5     2.6     5.0     2.6  
        100.0 %   100.0%   100.0 %   100.0 %
                             
NEW VEHICLE UNIT OTHER MIX:                          
  Import     62.4 %   56.8 %   58.5 %   56.8 %
  Luxury     22.5     25.4     24.4     24.3  
  Domestic     15.1     17.8     17.1     18.9  
        100.0 %   100.0 %   100.0 %   100.00 %
                            
  Car     62.2 %   56.4 %   59.1 %   57.9 %
  Truck     37.8     43.6     40.9     42.1  
        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,
        2009   2008     % Change 2009   2008     % Change
REVENUES:                                          
  New vehicle retail sales $ 728,089     $ 877,669     (17.0 ) % $ 1,883,973     $ 2,737,732     (31.2 ) %
                                                        
  Used vehicle retail sales   254,716       262,443     (2.9 )     729,345       865,031     (15.7 )  
  Used vehicle wholesale sales   43,151       58,689     (26.5 )     112,536       193,412     (41.8 )  
    Total used   297,867       321,132     (7.2 )    841,881       1,058,443     (20.5 )  
  Parts and service   183,254       188,576     (2.8 )     547,224       572,165     (4.4 )  
  Finance and insurance   37,509       46,597     (19.5 )     102,213       152,012     (32.8 )  
    Total   $ 1,246,719     $ 1,433,974     (13.1 ) % $ 3,375,291     $ 4,520,352     (25.3 ) %
                                              
GROSS MARGIN:                                        
  New vehicle retail sales   6.7 %   6.3 %       6.0 %   6.4 %    
                                                
  Used vehicle retail sales   10.3       10.6           10.5       10.9        
  Used vehicle wholesale sales   3.0       (1.6 )           3.0       (0.9 )        
    Total used   9.2       8.4           9.5       8.7        
  Parts and service   53.7      53.2           53.1       53.9        
  Finance and insurance   100.0       100.0           100.0       100.0        
    Total     17.0 %   16.0 %       17.4 %   16.1 %    
                                              
GROSS PROFIT:                                        
  New vehicle retail sales $ 48,619     $ 55,705     (12.7 ) % $ 113,073     $ 175,869     (35.7 ) %
                                                         
  Used vehicle retail sales   26,271      27,916     (5.9 )     76,705       93,899     (18.3 )  
  Used vehicle wholesale sales   1,279       (934 )     236.9     3,331       (1,669 )     299.6  
    Total used   27,550       26,982     2.1     80,036       92,230     (13.2 )  
  Parts and service   98,343       100,335     (2.0 )     290,468      308,498     (5.8 )  
  Finance and insurance   37,509       46,597     (19.5 )     102,213       152,012     (32.8 )  
    Total   $ 212,021     $ 229,619     (7.7 ) % $ 585,790     $ 728,609     (19.6 ) %
                                               
UNITS SOLD:                                         
  Retail new vehicles sold   25,057       28,661     (12.6 ) %   62,942       89,548     (29.7 ) %
                                                         
  Retail used vehicles sold   14,175       15,057     (5.9 )     41,181       48,945     (15.9 )  
  Wholesale used vehicles sold   8,367       9,399     (11.0 )     21,222       29,651     (28.4 )  
                                                         
    Total used   22,542       24,456     (7.8 ) %   62,403       78,596     (20.6 ) %
                                               
GROSS PROFIT PER UNIT SOLD:                                        
  New vehicle retail sales $ 1,940     $ 1,944     (0.2 ) % $ 1,796     $ 1,964     (8.6 ) %
                                                        
  Used vehicle retail sales   1,853       1,854     (0.1 )     1,863       1,918     (2.9 )  
  Used vehicle wholesale sales   153       (99 )     254.5     157       (56 )     380.4  
    Total used   1,222       1,103     10.8     1,283       1,173     9.4  
  Finance and insurance (per retail unit) $ 956     $ 1,066     (10.3 ) % $ 982     $ 1,098     (10.6 ) %
                                               
OTHER:                                            
  SG&A expenses $ 162,466     $ 189,209     (14.1 ) % $ 466,813     $ 579,608     (19.5 ) %
  SG&A as % revenues   13.0 %   13.2 %       13.8 %   12.8 %    
  SG&A as % gross profit   76.6 %   82.4 %       79.7 %   79.5 %    
  Operating margin   3.4 %   (1.0 ) %       2.9 %   1.8 %    
  Pretax margin   2.2 %   (2.4 ) %       1.7 %   0.4 %    
                                               
  Floorplan interest $ (7,523 )     $ (11,236 )     (33.0 ) % $ (24,342 )     $ (35,636 )     (31.7 ) %
  Floorplan assistance   5,771       7,383     (21.8 )     15,030       22,948     (34.5 )  
   Net floorplan expense $ (1,752 )     $ (3,853 )     (54.5 ) % $ (9,312 )     $ (12,688 )     (26.6 ) %
                                         
                                         
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,
        2009     2008     % Change 2009     2008     % Change
REVENUES:                                          
  New vehicle retail sales $ 728,090     $ 865,836     (15.9 ) % $ 1,871,662     $ 2,699,930     (30.7 ) %
                                                        
  Used vehicle retail sales   254,715       257,971     (1.3 )     722,965       851,505     (15.1 )  
  Used vehicle wholesale sales   43,149       57,755     (25.3 )     111,574       190,438     (41.4 )  
    Total used $ 297,864       315,726     (5.7 )     834,539       1,041,943     (19.9 )  
  Parts and service  183,254       184,929     (0.9 )     542,403       561,552     (3.4 )  
  Finance and insurance   37,471       46,217     (18.9 )     101,770       150,718     (32.5 )  
    Total   $ 1,246,679       1,412,708     (11.8 ) % $ 3,350,374       4,454,143     (24.8 ) %
                                               
GROSS MARGIN:                                        
  New vehicle retail sales   6.7 %   6.4 %         6.0 %     6.4 %      
                                                       
  Used vehicle retail sales  10.3       10.6           10.5       10.8        
  Used vehicle wholesale sales   3.0       (1.2 )           3.0       (0.6 )        
    Total used   9.2       8.4           9.5       8.7        
  Parts and service   53.7       53.3           53.1       53.9        
  Finance and insurance   100.0       100.0           100.0       100.0        
    Total     17.0 %   16.0 %         17.4 %     16.1 %      
                                               
GROSS PROFIT:                                        
  New vehicle retail sales $ 48,620     $ 55,114     (11.8 ) % $ 112,572     $ 173,670     (35.2 ) %
                                                         
  Used vehicle retail sales   26,273       27,363     (4.0 )     76,023       92,273     (17.6 )  
  Used vehicle wholesale sales   1,277       (696 )     283.5     3,315       (1,189 )     378.8  
    Total used   27,550       26,667     3.3     79,338       91,084     (12.9 )  
  Parts and service   98,371       98,507     (0.1 )     287,761       302,760     (5.0 ) 
  Finance and insurance   37,471       46,217     (18.9 )     101,770       150,718     (32.5 )  
    Total     212,012       226,505     (6.4 ) %   581,441       718,232     (19.0 ) %
                                               
UNITS SOLD:                                          
  Retail new vehicles sold   25,057       28,269     (11.4 ) %   62,608       88,318     (29.1 ) %
                                                         
  Retail used vehicles sold   14,175       14,792     (4.2 )     40,935       48,130     (14.9 )  
  Wholesale used vehicles sold   8,367       9,251     (9.6 )     21,104       29,191     (27.7 )  
                                                           
    Total used   22,542       24,043     (6.2 ) %   62,039       77,321     (19.8 ) %
                                               
GROSS PROFIT PER UNIT SOLD:                                        
  New vehicle retail sales $ 1,940     $ 1,950     (0.5 ) % $ 1,798     $ 1,966     (8.5 ) %
                                                        
  Used vehicle retail sales   1,853       1,850     0.2     1,857       1,917     (3.1 )  
  Used vehicle wholesale sales   153       (75 )     304.0     157       (41 )     482.9  
    Total used   1,222       1,109     10.2     1,279       1,178     8.6  
  Finance and insurance (per retail unit) $ 955     $ 1,073     (11.0 ) % $ 983     $ 1,105     (11.0 ) %
                                               
OTHER:                                            
  SG&A expenses $ 162,007     $ 185,822     (12.8 ) % $ 462,735     $ 568,666     (18.6 ) %
  SG&A as % revenues   13.0 %   13.2 %         13.8 %     12.8 %      
  SG&A as % gross profit   76.4 %   82.0 %         79.6 %     79.2 %      
  Operating margin   3.4 %   (1.0 ) %         2.9 %     1.9 %      
                                               
  Floorplan interest $ (7,522 )     $ (11,070 )     (32.1 ) % $ (24,253 )     $ (35,089 )     (30.9 ) %
  Floorplan assistance   5,771       7,272     (20.6 )     15,011       22,578     (33.5 )  
    Net floorplan expense $ (1,751 )     $ (3,798 )     (53.9 ) % $ (9,242 )     $ (12,511)     (26.1 ) %
                                                 
(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.
 
 
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
                                             
  NET INCOME FROM CONTINUING OPERATIONS RECONCILIATION:                        
                           
           Three Months Ended September 30, Nine Months Ended September 30,
            2009     2008     % Change   2009     2008     % Change  
                                                   
  Reported income (loss) from continuing operations $ 18,340     $ (21,817 )     184.1 % $ 36,797     $ 11,367     223.7%
  Adjustments:                                         
    Non-Cash asset impairment charges   461       30,174           1,726       30,174        
    Mortgage debt refinance charges   -       -           331       -        
    Gain on dealership disposition   -       -           (451 )       -        
    Gain on debt redemption   (393 )      (303 )           (5,299 )       (555 )        
    Income tax benefit related to tax elections for prior periods   (1,604 )       -           (1,604 )       -        
    Lease termination charges   -       135           -       670        
                                                  
      Adjusted net income from continuing operations (1) $ 16,804     $ 8,189     105.2 % $ 31,500     $ 41,656     (24.4 ) %
                                                   
  DILUTED INCOME PER SHARE FROM CONTINUING OPERATIONS RECONCILIATION:                            
                                                   
              Three Months Ended September 30,   Nine Months Ended September 30,
              2009       2008     % Change     2009       2008     % Change  
                                                   
  Reported income (loss) per share from continuing operations $ 0.78     $ (0.96 )     181.3 % $ 1.58     $ 0.50     216.0%
  Adjustments:                                          
    Non-Cash asset impairment charges   0.02       1.33           0.08       1.33        
    Mortgage debt refinance charges   -       -           0.01       -        
    Gain on dealership disposition   -       -           (0.02 )       -        
    Gain on debt redemption   (0.02 )       (0.01 )           (0.22 )       (0.02 )        
    Income tax benefit related to tax elections for prior periods   (0.07 )       -           (0.07 )       -        
    Lease termination charges   -       0.01           -       0.03       
                                                   
      Adjusted diluted income per share from continuing operations (1) $ 0.71     $ 0.37     91.9 % $ 1.36     $ 1.84     (26.1 ) %
                                                   
  CASH FLOWS FROM CONTINUING OPERATIONS RECONCILIATION:                           
                                                   
              Three Months Ended September 30,   Nine Months Ended September 30,
              2009       2008     % Change     2009       2008     % Change  
                                                  
  Net cash provided by operating activities, from continuing operations $ 138,560     $ 121,209     14.3 % $ 464,772     $ 203,041     128.9 %
  Adjustments:                                          
                                                         
    Change in floorplan notes payable-credit facility, excluding floorplan offset account  (83,806 )       (66,949 )           (364,109 )       (10,366 )        
                                                   
      Adjusted net cash provided by operating activities, from continuing operations (1) $ 54,754     $ 54,260     0.9 % $ 100,663     $ 192,675     (47.8 ) %
                                                  
                                                     
                                                     
(1) Adjusted net income from continuing operations, adjusted diluted earnings per share from continuing operations and adjusted net cash provided by operating activities, from continuing operations mean net income from continuing operations, diluted earnings per share from continuing operations and net cash provided by operating activities from continuing operations in accordance with GAAP, as the case may be, plus the adjustments noted above.  We believe that these adjusted financial measures are relevant and useful to investors because they provide additional information regarding the performance of our operations and  improve period-to-period comparability.  These measures are not measures of financial performance under GAAP. Accordingly, they should not be considered as substitutes for their unadjusted counterparts, which are prepared in accordance with GAAP.  Although we find these non-GAAP results useful in evaluating the performance of our business, our reliance on these measures is limited because the adjustments often have a material impact on our financial statements calculated in accordance with GAAP.  Therefore, we typically use these adjusted numbers in conjunction with our GAAP results to address these limitations.  

Contact Information

  • AT GROUP 1:
    President and CEO
    Earl J. Hesterberg
    (713) 647-5700

    Senior Vice President and CFO
    John C. Rickel
    (713) 647-5700

    Manager, Investor Relations
    Kim Paper Canning
    (713) 647-5700

    AT Fleishman-Hillard:
    Investors
    John Roper
    (713) 513-9505

    AT Pierpont Communications:
    Media
    Clint L. Woods
    (713) 627-2223