SOURCE: Group 1 Automotive Inc.

Group 1 Automotive Inc.

February 11, 2010 07:00 ET

Group 1 Automotive Returns to Growth Mode

Fourth-Quarter Same-Store Revenue Increases 4.1 Percent - Growth in All Business Segments; Cost Structure Reduced - Company Well Positioned for Sales Rebound

HOUSTON, TX--(Marketwire - February 11, 2010) -  Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today reported fourth-quarter adjusted net income from continuing operations of $10.3 million, or $0.43 per diluted share, for the period ended Dec. 31, 2009, as compared to the 2008 adjusted results of $0.5 million, or $0.03 per diluted share. For comparison purposes, as shown in the attached reconciliation table, the adjusted 2009 fourth-quarter results excluded net after-tax losses of $12.2 million, or $0.51 per diluted share, for non-cash asset impairment charges, primarily related to real estate holdings, and a loss on a dealership disposition. The adjusted 2008 fourth-quarter results excluded net after-tax charges of $57.9 million, or $2.55 per diluted share, comprised of non-cash asset impairment charges, partially offset by gains on debt redemptions. Unadjusted, net loss from continuing operations was $2.0 million, or $0.08 per diluted share, for the quarter ended Dec. 31, 2009.

Fourth-Quarter Operating Highlights

  • Group 1 returned to growth in the fourth quarter, with both consolidated revenue, up 1.5 percent, and same-store revenue, up 4.1 percent, over the same period a year ago. This is the first quarter since auto sales started to slow in the third quarter of 2006 that same-store revenue experienced growth.
  • Group 1's same-store gross margin was 16.5 percent for the fourth quarter, with margins improving in new and used vehicles, parts and service, and finance and insurance business segments.
  • Same-store new vehicle gross profit per unit improved, to $2,030, from both the preceding and prior-year quarters, as the mix of luxury sales increased 220 basis points, to 29.5 percent.
  • Group 1's consolidated selling, general and administrative (SG&A) expenses were reduced by $5.6 million in the quarter, improving both operating margin and SG&A as a percentage of gross profit.

Full-Year Results
For the full year, Group 1 retailed 83,182 new vehicles and 54,067 used vehicles and generated $4.5 billion of revenue. Net income from continuing operations for the full year 2009 was $34.8 million, or $1.49 per diluted share. On an adjusted basis, the company earned net income of $41.8 million, or $1.79 per diluted share, as shown in the attached reconciliation table.

On a same-store basis, Group 1 generated $4.5 billion in total revenues and gross margin improved 90 basis points, to 17.1 percent. Consolidated SG&A as a percent of gross profit was reduced 80 basis points, to 80.0 percent, and operating margin, excluding the effect of impairments, improved to 2.8 percent.

"Group 1 was profitable in perhaps the most challenging year automotive retailing has ever experienced," said Earl J. Hesterberg, Group 1's president and chief executive officer. "These results, delivered in the sharpest automotive downturn in recent history, validate the resilience of the dealership model. The work we have done since 2006 to commonize systems, reduce overhead and further leverage the business, enabled us to navigate these challenging times and has us now solidly positioned to take full advantage of improvements in sales volumes as the recovery continues to unfold."

Corporate Development Update
During the fourth quarter, Group 1 acquired a Hyundai franchise in New Orleans and a previously-announced BMW dealership in Mobile, Ala. Including these acquisitions, Group 1 added a total of five franchises with estimated annual revenues of approximately $108.4 million and disposed of eight franchises with annual revenues of $126.2 million in 2009.

In January, Group 1 added two Sprinter franchises to separate Mercedes-Benz stores. This new brand offering is expected to generate approximately $11.2 million in aggregate annual revenues.

Group 1's Balance Sheet Update
Group 1 reported its new vehicle inventory increased $129.3 million from Sept. 30 to $427.9 million on Dec. 31, as inventories were replenished after the CARS program. During 2009, the company reduced non-floorplan debt by $110.2 million, primarily reflecting the payoff of its outstanding acquisition-line borrowings of $50.0 million and repurchases of $41.7 million of its 2.25 percent convertible bonds. The company ended the quarter with overall immediately available funds of $84.8 million and overall available liquidity of $243.0 million.

Fourth-Quarter Earnings Conference Call
Group 1's senior management will host a conference call today at 10 a.m. ET to discuss the fourth-quarter financial results and the company's 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. A slide presentation will be posted to Group 1's website prior to the call.

The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:

Domestic: 888.349.9587
International: 719.325.2320
Participant Passcode: 4546846

A telephonic replay will be available following the call through Feb. 18 by dialing:

Domestic: 888.203.1112
International: 719.457.0820
Replay Passcode: 4546846

About Group 1 Automotive, Inc.
Group 1 owns and operates 98 automotive dealerships, 132 franchises, and 24 collision service 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 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 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," "may" or "will" and similar expressions. 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. 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, whether as a result of new information, future developments or otherwise, except as may be required by law.

Group 1 Automotive, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
                         
  Three Months Ended December 31, Twelve Months Ended December 31,
  2009   2008   % Change 2009   2008   % Change
REVENUES:                                  
New vehicle retail sales $ 659,058   $ 655,156   0.6 % $ 2,543,031   $ 3,392,888     (25.0) %
Used vehicle retail sales   241,269     225,528   7.0     970,614     1,090,559     (11.0)  
Used vehicle wholesale sales   40,532     39,850   1.7     153,068     233,262     (34.4)  
Parts and service   175,341     178,658   (1.9)     722,565     750,823     (3.8)  
Finance and insurance   34,216     34,543   (0.9)     136,429     186,555     (26.9)  
  Total revenues   1,150,416     1,133,735   1.5 %   4,525,707     5,654,087     (20.0) %
                                   
COST OF SALES:                                  
New vehicle retail sales   617,897     616,269   0.3 %   2,388,797     3,178,132     (24.8) %
Used vehicle retail sales   219,940     204,584   7.5     872,580     975,716     (10.6)  
Used vehicle wholesale sales   41,559     42,523   (2.3)     150,764     237,604     (36.5)  
Parts and service   80,973     83,307   (2.8)     337,729     346,974     (2.7)  
  Total cost of sales   960,369     946,683   1.4 %   3,749,870     4,738,426     (20.9) %
                                   
GROSS PROFIT   190,047     187,052   1.6 %   775,837     915,661     (15.3) %
                                   
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   154,235     159,822   (3.5)     621,048     739,430     (16.0)  
                                   
DEPRECIATION AND AMORTIZATION EXPENSE   6,287     6,603   (4.8)     25,828     25,652     0.7  
                                   
ASSET IMPAIRMENTS   18,050     114,937   (84.3)     20,887     163,023     (87.2)  
                                   
OPERATING INCOME (LOSS)   11,475     (94,310)   112.2 %   108,074     (12,444)     968.5 %
                                   
OTHER INCOME (EXPENSE):                                  
Floorplan interest expense   (8,003)     (10,741)   (25.5)     (32,345)     (46,377)     (30.3)  
                                   
Other interest expense, net   (7,218)     (8,802)   (18.0)     (29,075)     (36,783)     (21.0)  
                                   
Gain on redemption of long-term debt   -     17,222   (100.0)     8,211     18,126     (54.7)  
                                   
Other income (expense), net   (8)     29   (127.6)     (14)     302     (104.6)  
                                   
                                   
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES   (3,754)     (96,602)   (96.1) %   54,851     (77,176)     171.1 %
                                   
BENEFIT FROM (PROVISION FOR) INCOME TAXES   1,802     39,225   (95.4)     (20,006)     31,166     (164.2)  
                                   
                                   
INCOME (LOSS) FROM CONTINUING OPERATIONS   (1,952)     (57,377)   (96.6) %   34,845     (46,010)     175.7 %
                                   
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) $ (1,952)   $ (57,377)   (96.6) % $ 34,845   $ (48,013)   $ 172.6 %
                                   
DILUTED INCOME (LOSS) PER SHARE:                                  
Income (loss) per share from continuing operations $ (0.08)   $ (2.52)   (96.8) % $ 1.49   $ (2.03)     173.4 %
Loss per share related to discontinued operations   -     -   -     -     (0.09)     (100.0)  
Income (loss) per share $ (0.08)   $ (2.52)   (96.8) % $ 1.49   $ (2.12)     170.3 %
                                   
Weighted average diluted shares outstanding   23,577     22,760   3.6 %   23,325     22,671     2.9 %
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
             
  December 31,   December 31,      
  2009   2008   % Change
  (Unaudited)          
ASSETS:                
                 
CURRENT ASSETS:                
  Cash and cash equivalents $ 13,221   $ 23,144   (42.9) %
  Contracts in transit and vehicle receivables, net   86,500     102,834   (15.9)  
  Accounts and notes receivable, net   62,496     67,350   (7.2)  
  Inventories   596,743     845,944   (29.5)  
  Deferred income taxes   14,653     18,474   (20.7)  
  Prepaid expenses and other current assets   48,425     38,878   24.6  
    Total current assets   822,038     1,096,624   (25.0)  
PROPERTY AND EQUIPMENT, net   475,828     514,891   (7.6)  
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS   658,281     655,784   0.4  
OTHER ASSETS   13,267     20,815   (36.3)  
    Total assets $ 1,969,414   $ 2,288,114   (13.9) %
                 
LIABILITIES AND STOCKHOLDERS' EQUITY:                
                 
CURRENT LIABILITIES:                
  Floorplan notes payable - credit facility $ 491,892   $ 738,551   (33.4) %
    Offset account related to floorplan notes payable - credit facility   (71,573)     (44,859)   59.6  
  Floorplan notes payable - manufacturer affiliates   115,180     128,580   (10.4)  
  Current maturities of long-term debt   14,355     13,594   5.6  
  Current liabilities from interest rate risk management activities   10,412     -   100.0  
  Accounts payable   72,276     74,235   (2.6)  
  Accrued expenses   86,271     94,395   (8.6)  
    Total current liabilities   718,813     1,004,496   (28.4)  
2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $182,753 and $224,500, respectively)   131,932     155,333   (15.1)  
8.25% SENIOR SUBORDINATED NOTES   73,267     72,962   0.4  
MORTGAGE FACILITY, net of current maturities   182,216     168,583   8.1  
OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, net of current maturities   19,040     50,444   (62.3)  
CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities   37,686     39,401   (4.4)  
ACQUISITION LINE   -     50,000   (100.0)  
DEFERRED INCOME TAXES   33,932     2,768   1,125.9  
LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES   20,151     44,655   (54.9)  
OTHER LIABILITIES   26,633     27,135   (1.9)  
DEFERRED REVENUES   5,588     10,220   (45.3)  
                 
STOCKHOLDERS' EQUITY:                
  Common stock   262     261   0.4  
  Additional paid-in capital   346,055     351,405   (1.5)  
  Retained earnings   471,932     437,087   8.0  
  Accumulated other comprehensive loss   (26,256)     (38,109)   (31.1)  
  Treasury stock   (71,837)     (88,527)   (18.9)  
    Total stockholders' equity   720,156     662,117   8.8  
    Total liabilities and stockholders' equity $ 1,969,414   $ 2,288,114   (13.9) %
                 
                 
KEY DEBT COVENANT METRICS: *                
  Senior secured leverage ratio (must be less than 2.75)   1.31     1.49      
  Total leverage ratio (must be less than 4.50)   3.29     3.46      
  Fixed charge coverage ratio (must be greater than 1.25)   1.76     1.59      
  Current ratio (must be greater than 1.15)   1.34     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 December 31,   Twelve Months Ended December 31,
  2009   2008   2009   2008
                       
Income (loss) from continuing operations $ (1,952)   $ (57,377)   $ 34,845   $ (46,010)
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:                      
  Asset Impairments   18,050     114,937     20,887     163,023
  Deferred income taxes   6,568     (37,638)     29,646     (28,359)
  Depreciation and amortization   6,287     6,603     25,828     25,652
  Amortization of debt discount and issue costs   1,617     2,565     7,030     10,229
  Stock-based compensation   1,502     1,629     8,869     6,523
  Tax (benefit) shortfall from stock-based compensation   (529)     823     (181)     1,099
  Gain on redemption of long-term debt   -     (17,222)     (8,211)     (18,126)
  Other   1,240     (468)     27     (605)
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:                      
  Inventories   (130,150)     29,113     242,996     57,374
  Floorplan notes payable - credit facility   117,450     34,672     (246,659)     24,306
  Floorplan notes payable - manufacturer affiliates   25,309     (7,817)     (14,145)     (41,083)
  Contracts-in-transit and vehicle receivables   (19,409)     (13,821)     16,500     87,386
  Accounts and notes receivable   (10,014)     (587)     10,851     10,106
  Prepaid expenses and other assets   (6,459)     (16,625)     845     1,695
  Deferred revenues   (1,155)     (1,606)     (4,632)     (6,311)
  Accounts payable and accrued expenses   (1,003)     (21,804)     (16,481)     (38,847)
Adjusted net cash provided by operating activities, from continuing operations $ 7,352   $ 15,377   $ 108,015   $ 208,052
Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
                         
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2009   2008     2009     2008  
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:                      
Region Geographic Market                      
Eastern Massachusetts 14.9 %   12.3 %   15.1 %   12.1 %
  New Jersey 6.3     5.6     6.5     6.6  
  New York 4.4     4.0     4.1     4.1  
  New Hampshire 4.3     3.2     4.2     3.5  
  Georgia 3.9     3.5     3.7     3.4  
  Louisiana 2.8     3.8     3.1     3.4  
  Florida 2.0     2.3     1.7     2.5  
  Mississippi 1.7     1.2     1.8     1.5  
  Maryland 0.9     1.1     0.9     0.6  
  Alabama 0.8     0.5     0.7     0.9  
  South Carolina 0.3     0.3     0.3     0.3  
    42.3     37.8     42.1     38.9  
                         
Central Texas 31.8     35.3     32.1     32.7  
  Oklahoma 8.0     9.0     8.3     9.4  
  Kansas 1.2     1.3     1.2     1.3  
    41.0     45.6     41.6     43.4  
                         
Western California 13.9     15.1     14.0     16.0  
                         
International United Kingdom 2.8     1.5     2.3     1.7  
    100.0 %   100.0 %   100.0 %   100.0 %
                         
NEW VEHICLE UNIT SALES BRAND MIX:                      
Toyota/Scion/Lexus   38.0 %   35.7 %   36.6 %   35.1 %
Nissan/Infiniti   12.6     11.0     12.8     12.7  
Honda/Acura   11.4     13.2     12.6     14.0  
BMW/Mini   10.8     9.6     9.8     8.7  
Ford   8.8     10.0     8.7     9.5  
Mercedes-Benz   7.4     6.6     5.9     5.9  
GM   4.3     4.4     3.8     4.7  
Chrysler   2.7     6.4     5.0     6.0  
Other   4.0     3.1     4.8     3.4  
    100.0 %   100.0 %   100.0 %   100.0 %
                         
NEW VEHICLE UNIT OTHER MIX:                      
Import   55.7 %   53.0 %   57.8 %   56.1 %
Luxury   29.5     27.3     25.7     24.9  
Domestic   14.8     19.7     16.5     19.0  
    100.0 %   100.0 %   100.0 %   100.00 %
                         
Car   57.3 %   54.5 %   58.6 %   57.3 %
Truck   42.7     45.5     41.4     42.7  
    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 December 31,     Twelve Months Ended December 31,  
  2009   2008   % Change     2009   2008   % Change  
                                   
REVENUES:                                  
  New vehicle retail sales $ 659,058   $ 655,156   0.6 %   $ 2,543,031   $ 3,392,888   (25.0 )%
                                     
  Used vehicle retail sales   241,269     225,528   7.0       970,614     1,090,559   (11.0 )
  Used vehicle wholesale sales   40,532     39,850   1.7       153,068     233,262   (34.4 )
    Total used   281,801     265,378   6.2       1,123,682     1,323,821   (15.1 )
  Parts and service   175,341     178,658   (1.9 )     722,565     750,823   (3.8 )
  Finance and insurance   34,216     34,543   (0.9 )     136,429     186,555   (26.9 )
    Total $ 1,150,416   $ 1,133,735   1.5 %   $ 4,525,707   $ 5,654,087   (20.0 )%
                                   
                                   
GROSS MARGIN:                                  
  New vehicle retail sales   6.2 %   5.9 %         6.1 %   6.3    
                                     
  Used vehicle retail sales   8.8     9.3           10.1     10.5      
  Used vehicle wholesale sales   (2.5 )   (6.7 )         1.5     (1.9 )    
  Total used   7.2     6.9           8.9     8.3      
  Parts and service   53.8     53.4           53.3     53.8      
  Finance and insurance   100.0     100.0           100.0     100.0      
    Total   16.5 %   16.5 %         17.1 %   16.2 %    
                                   
                                   
GROSS PROFIT:                                  
  New vehicle retail sales $ 41,161   $ 38,887   5.8 %   $ 154,234   $ 214,756   (28.2 )%
                                     
  Used vehicle retail sales   21,329     20,944   1.8       98,034     114,843   (14.6 )
  Used vehicle wholesale sales   (1,027 )   (2,673 ) (61.6 )     2,304     (4,342 ) 153.1  
    Total used   20,302     18,271   11.1       100,338     110,501   (9.2 )
  Parts and service   94,368     95,351   (1.0 )     384,836     403,849   (4.7 )
  Finance and insurance   34,216     34,543   (0.9 )     136,429     186,555   (26.9 )
    Total $ 190,047   $ 187,052   1.6 %   $ 775,837   $ 915,661   (15.3 )%
                                   
                                   
                                   
UNITS SOLD:                                  
  Retail new vehicles sold   20,240     21,157   (4.3 )%     83,182     110,705   (24.9 )%
                                     
  Retail used vehicles sold   12,886     13,026   (1.1 )     54,067     61,971   (12.8 )
  Wholesale used vehicles sold   6,571     7,168   (8.3 )     27,793     36,819   (24.5 )
                                     
    Total used   19,457     20,194   (3.6 )%     81,860     98,790   (17.1 )%
                                   
                                   
                                   
GROSS PROFIT PER UNIT SOLD:                                  
  New vehicle retail sales $ 2,034   $ 1,838   10.7 %   $ 1,854   $ 1,940   (4.4 )%
                                     
  Used vehicle retail sales   1,655     1,608   2.9       1,813     1,853   (2.2 )
  Used vehicle wholesale sales   (156 )   (373 ) (58.2 )     83     (118 ) 170.3  
    Total used   1,043     905   15.2       1,226     1,119   9.6  
  Finance and insurance (per retail unit) $ 1,033   $ 1,011   2.2 %   $ 994   $ 1,080   (8.0 )%
                                   
                                   
                                   
OTHER:                                  
  SG&A expenses $ 154,235   $ 159,822   (3.5 )%   $ 621,048   $ 739,430   (16.0 )%
  SG&A as % revenues   13.4 %   14.1 %         13.7 %   13.1 %    
  SG&A as % gross profit   81.2 %   85.4 %         80.0 %   80.8 %    
  Operating margin   1.0 %   (8.3 )%         2.4 %   (0.2 )%    
  Operating margin, excluding impairments   2.6 %   1.8 %         2.8 %   2.7    
  Pretax margin   (0.3 )%   (8.5 )%         1.2 %   (1.4 )%    
  Pretax margin, excluding impairments   1.2 %   1.6 %         1.7 %   1.5    
                                     
  Floorplan interest $ (8,003 ) $ (10,741 ) (25.5 )%   $ (32,345 ) $ (46,377 ) (30.3 )%
  Floorplan assistance   5,009     5,364   (6.6 )     20,039     28,311   (29.2 )
    Net floorplan expense $ (2,994 ) $ (5,377 ) (44.3 )%   $ (12,306 ) $ (18,066 ) (31.9 )%
Group 1 Automotive, Inc.
Additional Information - Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
                           
  Three Months Ended December 31,     Twelve Months Ended December 31,
  2009   2008   % Change     2009   2008   % Change  
REVENUES:                                  
  New vehicle retail sales $ 657,358   $ 637,924   3.0 %   $ 2,529,020   $ 3,337,856   (24.2 )%
                                     
  Used vehicle retail sales   239,792     217,319   10.3       962,757     1,068,824   (9.9 )
  Used vehicle wholesale sales   40,437     38,323   5.5       152,011     228,761   (33.6 )
    Total used   280,229     255,642   9.6       1,114,768     1,297,585   (14.1 )
  Parts and service   174,229     173,503   0.4       716,632     735,055   (2.5 )
  Finance and insurance   34,140     33,645   1.5       135,910     184,362   (26.3 )
    Total $ 1,145,956   $ 1,100,714   4.1 %   $ 4,496,330   $ 5,554,858   (19.1 )%
                                   
GROSS MARGIN:                                  
  New vehicle retail sales   6.2 %   5.9 %         6.1 %   6.3 %    
                                     
  Used vehicle retail sales   8.8     9.3           10.1     10.5      
  Used vehicle wholesale sales   (2.4 )   (6.4 )         1.5     (1.6 )    
    Total used   7.2     6.9           8.9     8.4      
  Parts and service   53.9     53.4           53.3     53.8      
  Finance and insurance   100.0     100.0           100.0     100.0      
    Total   16.5 %   16.5 %         17.1 %   16.2 %    
                                   
GROSS PROFIT:                                  
  New vehicle retail sales $ 41,009   $ 37,952   8.1 %   $ 153,581   $ 211,624   (27.4 )%
                                     
  Used vehicle retail sales   21,178     20,211   4.8       97,201     112,484   (13.6 )
  Used vehicle wholesale sales   (965 )   (2,467 ) (60.9 )     2,350     (3,657 ) 164.3  
    Total used   20,213     17,744   13.9       99,551     108,827   (8.5 )
  Parts and service   93,862     92,671   1.3       381,623     395,431   (3.5 )
  Finance and insurance   34,140     33,645   1.5       135,910     184,362   (26.3 )
    Total $ 189,224   $ 182,012   4.0 %   $ 770,665   $ 900,244   (14.4 )%
                                   
UNITS SOLD:                                  
  Retail new vehicles sold   20,202     20,566   (1.8 )%     82,810     108,884   (23.9 )%
                                     
  Retail used vehicles sold   12,818     12,504   2.5       53,753     60,634   (11.3 )
  Wholesale used vehicles sold   6,550     6,873   (4.7 )     27,654     36,064   (23.3 )
                                     
    Total used   19,368     19,377   (0.0 )%     81,407     96,698   (15.8 )%
                                   
GROSS PROFIT PER UNIT SOLD:                                  
  New vehicle retail sales $ 2,030   $ 1,845   10.0 %   $ 1,855   $ 1,944   (4.6 )%
                                     
  Used vehicle retail sales   1,652     1,616   2.2       1,808     1,855   (2.5 )
  Used vehicle wholesale sales   (147 )   (359 ) (59.1 )     85     (101 ) 184.2  
    Total used   1,044     916   14.0       1,223     1,125   8.7  
  Finance and insurance (per retail unit) $ 1,034   $ 1,017   1.7 %   $ 995   $ 1,088   (8.5 )%
                                   
OTHER:                                  
  SG&A expenses $ 152,295   $ 154,500   (1.4 )%   $ 615,030   $ 723,166   (15.0 )%
  SG&A as % revenues   13.3 %   14.0 %         13.7 %   13.0 %    
  SG&A as % gross profit   80.5 %   84.9 %         79.8 %   80.3 %    
  Operating margin   2.3 %   (7.4 )%         2.8 %   0.0 %    
  Operating margin, excluding impairments   2.7 %   1.9 %         2.9 %   2.7 %    
                                   
  Floorplan interest $ (7,994 ) $ (10,457 ) (23.6 )%   $ (32,248 ) $ (45,547 ) (29.2 )%
  Floorplan assistance   5,002     5,152   (2.9 )     20,013     27,730   (27.8 )
    Net floorplan expense $ (2,992 ) $ (5,305 ) (43.6 )%   $ (12,235 ) $ (17,817 ) (31.3 )%
                                   
(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 December 31,   Twelve Months Ended December 31,  
  2009   2008   % Change   2009   2008   % Change  
                                 
  Reported income (loss) from continuing operations $ (1,952 ) $ (57,377 ) (96.6 )% $ 34,845   $ (46,010 ) 175.7 %
                                 
    Adjustments:                                
                                 
      Non-Cash asset impairment charges(2)   11,557     67,222         13,283     97,397      
                                 
      Mortgage debt refinance charges(3)   -     -         331     -      
                                 
      Loss on dealership disposition (4)   651     -         200     -      
                                 
      Gain on debt redemption (5)   -     (9,297 )       (5,299 )   (9,852 )    
                                 
      Income tax benefit related to tax elections for prior periods   -     -         (1,604 )   -      
                                 
      Lease termination charges (6)   -     -         -     670      
                                 
        Adjusted net income from continuing operations (1) $ 10,256   $ 548   1,771.5 % $ 41,756   $ 42,205   (1.1) %
                                 
DILUTED INCOME PER SHARE FROM CONTINUING OPERATIONS RECONCILIATION:
                                 
                                 
                                 
  Three Months Ended December 31,   Twelve Months Ended December 31,  
  2009   2008   % Change   2009   2008   % Change  
                                 
  Reported income (loss) per share from continuing operations $ (0.08 ) $ (2.52 ) (96.8 )% $ 1.49   $ (2.03 ) 173.4 %
                                 
    Adjustments:                                
                                 
      Non-Cash asset impairment charges   0.49     2.96         0.57     4.30      
                                 
      Mortgage debt refinance charges   -     -         0.01     -      
                                 
      Loss on dealership disposition   0.02     -         0.01     -      
                                 
      Gain on debt redemption   -     (0.41 )       (0.22 )   (0.44 )    
                                 
      Income tax benefit related to tax elections for prior periods   -     -         (0.07 )   -      
                                 
      Lease termination charges   -     -         -     0.03      
                                 
        Adjusted diluted income per share from continuing operations(1) $ 0.43   $ 0.03   1,333.3 % $ 1.79   $ 1.86   (3.8 )%
                                 
CASH FLOWS FROM CONTINUING OPERATIONS RECONCILIATION:
                                 
  Three Months Ended December 31,   Twelve Months Ended December 31,  
  2009   2008   % Change   2009   2008%   Change  
                                 
  Net cash provided by (used in) operating activities, from continuing operations $ (110,098 ) $ (19,295 ) 470.6 % $ 354,674   $ 183,746   93.0 %
                                 
    Change in floorplan notes payable-credit facility, excluding floorplan offset account   117,450     34,672         (246,659 )   24,306      
                                 
      Adjusted net cash provided by operating activities, from continuing operations(1) $ 7,352   $ 15,377   (52.2 )% $ 108,015   $ 208,052   (48.1) %
                                 
(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.  
   
(2)   Adjustments are net of tax benefits of $6,493 and $47,715 for the three months ended December 31, 2009 and 2008, respectively, and $7,509 and $65,626 for the twelve months ended December 31, 2009 and 2008, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.  
   
(3)   Adjustment is net of a tax benefit of $203 for the twelve months ended December 31, 2009 calculated utilizing the applicable federal and state tax rates for the adjustment.  
   
(4)   Adjustments are net of tax benefits of $351 and $99 for the three and twelve months ended December 31, 2009, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.  
   
(5)   Adjustments are net of tax provisions of $7,925 for the three months ended December 31, 2008 and $3,446 and $8,274 for the twelve months ended December 31, 2009 and 2008, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.  
   
(6)   Adjustment is net of a tax benefit of $421 for the twelve months ended December 31, 2008, calculated utilizing the applicable federal and state tax rates for the adjustment.  

Contact Information

  • Investor contacts:
    Kim Paper Canning
    Manager, Investor Relations
    Group 1 Automotive Inc.
    713-647-5741 /Email Contact
    or
    John Roper
    Fleishman-Hillard Inc.
    713-513-9505

    Media contacts:
    Pete DeLongchamps
    Vice President, Manufacturer Relations and Public Affairs
    Group 1 Automotive Inc.
    713-647-5770 /Email Contact
    or
    Clint Woods
    Pierpont Communications, Inc.
    713-627-2223