SOURCE: Group 1 Automotive, Inc.

Group 1 Automotive, Inc.

October 26, 2010 07:00 ET

Group 1 Automotive Reports Higher Earnings Driven by 17 Percent Revenue Increase

Used Vehicle and Parts and Service Sales Exceptionally Strong

HOUSTON, TX--(Marketwire - October 26, 2010) - Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today reported a third-quarter adjusted net income increase of 14.6 percent to $19.3 million, or $0.84 per diluted share, for the period ended Sept. 30, 2010. This compares to adjusted net income of $16.8 million, or $0.71 per diluted share, for the third quarter of 2009. Including the $0.3 million net after-tax adjustments for non-cash asset impairment charges and a gain on a real estate divestiture shown in the attached reconciliation table, net income for the third quarter of 2010 was $19.0 million, or $0.83 per diluted share.

Total company revenues for the quarter were up 17.2 percent driven by new vehicle sales increasing 12.9 percent, used vehicle sales growing 34.0 percent, finance and insurance sales improving 18.1 percent, and parts and service revenues expanding 7.1 percent.

"We are pleased with our sales performance in the third quarter. Our vehicle sales increase outpaced the market with new vehicle sales facing a challenging comparison versus last year's 'Cash for Clunkers' program period," said Earl J. Hesterberg, Group 1's president and chief executive officer. "The dramatic revenue increases helped leverage the cost reductions and operating efficiencies Group 1 executed over the past two years. These results continue to demonstrate the leverage Group 1's business model can deliver as sales volumes and revenues rebound."

Third-Quarter Operating Highlights

  • Same-store new vehicle revenues increased 9.4 percent, outpacing the prior-year period when the 'Cash for Clunkers' incentive program inflated sales results.
  • Same-store total used vehicle revenues were 29.0 percent higher, reflecting 29.2 percent and 28.1 percent increases in used retail and wholesale revenues, respectively.
  • Same-store used vehicle gross profit was 9.8 percent higher, reflecting the 13.9 percent increase in profit earned on retailed units.
  • Same-store parts and service gross profit improved 8.1 percent on 7.3 percent higher revenues, reflecting Group 1's continued focus on this segment.
  • Finance and insurance same-store gross profit expanded $83, to $1,037, per retail unit.
  • Selling, general and administrative expenses as a percent of gross profit continued to show sequential improvement, down 140 basis points, to 76.6 percent from the prior quarter on a consolidated basis.

"In addition to the great job our team did in the quarter on new and used vehicle sales, I am particularly proud of the outstanding results in parts and service, where same-store revenues increased 7.3 percent," Hesterberg added. "The work we have done to improve processes surrounding customer service, parts inventory management and our collision centers, is beginning to deliver positive results."

Balance Sheet
New vehicle inventory increased $52.8 million from the prior quarter to $537.6 million as of Sept. 30. The company ended the quarter with immediately available funds of $154.1 million and available liquidity of $291.6 million.

Corporate Development Update
During the third quarter, Group 1 added a Lincoln franchise with estimated annual revenues of $3.0 million to an existing Ford store in West Texas.

Including the Lincoln franchise, Group 1 has acquired 10 franchises this year with total estimated annual revenues of $256.2 million.

Share Repurchases
During the third quarter, Group 1 repurchased 294,098 shares of its common stock at an average price of $25.56 under a board-authorized $25.0 million share repurchase program. At the end of the third quarter, $17.5 million remained under the authorization.

Third-Quarter Earnings Conference Call
Group 1's senior management will host a conference call today at 10 a.m. ET to discuss the third-quarter financial results and the company's outlook and strategy.

The conference call will be simulcast live on the Internet at www.group1auto.com, then click on 'Investor Relations' and then 'Events' or through this link: http://www.group1corp.com/news/events.aspx. A replay will be available for 30 days.

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

Domestic: 877.795.3649
International: 719.325.4753
Participant Passcode: 3452864

A telephonic replay will be available following the call through Nov. 2 by dialing:

Domestic: 888.203.1112
International: 719.457.0820
Replay Passcode: 3452864

About Group 1 Automotive, Inc.
Group 1 owns and operates 101 automotive dealerships, 137 franchises, and 25 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 September 30,
                                     ------------------------------------
                                         2010         2009      % Change
                                     -----------  -----------  ----------
REVENUES:
New vehicle retail sales             $   822,121  $   728,089        12.9%
Used vehicle retail sales                340,625      254,716        33.7
Used vehicle wholesale sales              58,463       43,151        35.5
Parts and service                        196,264      183,254         7.1
Finance and insurance                     44,282       37,509        18.1
                                     -----------  -----------  ----------
      Total revenues                   1,461,755    1,246,719        17.2

COST OF SALES:
New vehicle retail sales                 775,046      679,470        14.1
Used vehicle retail sales                310,055      228,445        35.7
Used vehicle wholesale sales              58,158       41,872        38.9
Parts and service                         89,657       84,911         5.6
                                     -----------  -----------  ----------
      Total cost of sales              1,232,916    1,034,698        19.2

                                     -----------  -----------  ----------
GROSS PROFIT                             228,839      212,021         7.9
SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                 173,925      162,466         7.1
DEPRECIATION AND
 AMORTIZATION EXPENSE                      6,772        6,666         1.6
ASSET IMPAIRMENTS                          1,639          702       133.5
                                     -----------  -----------  ----------
OPERATING INCOME                          46,503       42,187        10.2

OTHER INCOME (EXPENSE):
Floorplan interest expense                (9,021)      (7,523)       19.9
Other interest expense, net               (6,894)      (7,318)       (5.8)
Gain (loss) on redemption of
 long-term debt                                -          598      (100.0)
Other expense, net                             -           (4)     (100.0)

                                     -----------  -----------  ----------
INCOME BEFORE INCOME TAXES                30,588       27,940         9.5

PROVISION FOR INCOME TAXES               (11,603)      (9,600)       20.9

                                     -----------  -----------  ----------
NET INCOME                           $    18,985  $    18,340         3.5%
                                     ===========  ===========  ==========


DILUTED INCOME PER SHARE             $      0.83  $      0.78         6.4%

Weighted average diluted shares
 outstanding                              22,926       23,503        (2.5)%



                                        Nine Months Ended September 30,
                                     -------------------------------------
                                         2010         2009       % Change
                                     -----------  -----------  -----------
REVENUES:
New vehicle retail sales             $ 2,254,093  $ 1,883,973         19.6%
Used vehicle retail sales                960,376      729,345         31.7
Used vehicle wholesale sales             156,653      112,536         39.2
Parts and service                        575,762      547,224          5.2
Finance and insurance                    124,533      102,213         21.8
                                     -----------  -----------  -----------
      Total revenues                   4,071,417    3,375,291         20.6

COST OF SALES:
New vehicle retail sales               2,122,533    1,770,900         19.9
Used vehicle retail sales                870,823      652,640         33.4
Used vehicle wholesale sales             153,565      109,205         40.6
Parts and service                        264,484      256,756          3.0
                                     -----------  -----------  -----------
      Total cost of sales              3,411,405    2,789,501         22.3

                                     -----------  -----------  -----------
GROSS PROFIT                             660,012      585,790         12.7
SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                 522,796      466,813         12.0
DEPRECIATION AND
 AMORTIZATION EXPENSE                     19,936       19,541          2.0
ASSET IMPAIRMENTS                          3,121        2,837         10.0
                                     -----------  -----------  ----------
OPERATING INCOME                         114,159       96,599         18.2

OTHER INCOME (EXPENSE):
Floorplan interest expense               (25,220)     (24,342)         3.6
Other interest expense, net              (20,265)     (21,857)        (7.3)
Gain (loss) on redemption of
 long-term debt                           (3,872)       8,211       (147.2)
Other expense, net                             -           (6)      (100.0)

                                     -----------  -----------  -----------
INCOME BEFORE INCOME TAXES                64,802       58,605         10.6

PROVISION FOR INCOME TAXES               (25,067)     (21,808)        14.9

                                     -----------  -----------  -----------
NET INCOME                           $    39,735  $    36,797          8.0%
                                     ===========  ===========  ===========


DILUTED INCOME PER SHARE             $      1.70  $      1.58          7.6%

Weighted average diluted shares
 outstanding                              23,414       23,240          0.7%





                         Group 1 Automotive, Inc.
                        Consolidated Balance Sheets
                          (Dollars in thousands)

                                        September 30, December 31,    %
                                             2010         2009      Change
                                         -----------  -----------  -------
                                         (Unaudited)
ASSETS:

CURRENT ASSETS:
   Cash and cash equivalents             $    96,162  $    13,221    627.3%
   Contracts in transit and vehicle
    receivables, net                          92,649       86,500      7.1
   Accounts and notes receivable, net         66,492       62,496      6.4
   Inventories                               757,201      596,743     26.9
   Deferred income taxes                      15,340       14,653      4.7
   Prepaid expenses and other current
    assets                                    37,520       48,425    (22.5)
                                         -----------  -----------  -------
       Total current assets                1,065,364      822,038     29.6
PROPERTY AND EQUIPMENT, net                  458,303      475,828     (3.7)
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS     667,387      658,281      1.4
OTHER ASSETS                                  10,458       13,267    (21.2)
                                         -----------  -----------  -------
       Total assets                      $ 2,201,512  $ 1,969,414     11.8%
                                         ===========  ===========  =======

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
   Floorplan notes payable - credit
    facility                             $   656,701  $   491,892     33.5%
       Offset account related to
        floorplan notes payable - credit
        facility                             (57,963)     (71,573)   (19.0)
   Floorplan notes payable -
    manufacturer affiliates                  103,922      115,180     (9.8)
   Current maturities of long-term debt       14,304       14,355     (0.4)
   Current liabilities from interest
    rate risk management activities            4,357       10,412    (58.2)
   Accounts payable                           84,864       72,276     17.4
   Accrued expenses                           83,459       86,271     (3.3)
                                         -----------  -----------  -------
       Total current liabilities             889,644      718,813     23.8
2.25% CONVERTIBLE SENIOR NOTES (aggregate
 principal of $182,753 at September 30,
 2010 and December 31, 2009)                 136,554      131,932      3.5
3.00% CONVERTIBLE SENIOR NOTES (aggregate
 principal of $115,000 at September 30,
 2010)                                        73,645            -    100.0
8.25% SENIOR SUBORDINATED NOTES                    -       73,267   (100.0)
MORTGAGE FACILITY, net of current
 maturities                                  148,469      182,216    (18.5)
OTHER REAL ESTATE RELATED AND LONG-TERM
 DEBT, net of current maturities              34,860       19,040     83.1
CAPITAL LEASE OBLIGATIONS RELATED TO
 REAL ESTATE, net of current maturities       38,115       37,686      1.1
DEFERRED INCOME TAXES                         56,376       33,932     66.1
LIABILITIES FROM INTEREST RATE RISK
 MANAGEMENT ACTIVITIES                        19,960       20,151     (0.9)
OTHER LIABILITIES                             29,585       26,633     11.1
DEFERRED REVENUES                              3,829        5,588    (31.5)

STOCKHOLDERS' EQUITY:
   Common stock                                  263          262      0.4
   Additional paid-in capital                371,112      346,055      7.2
   Retained earnings                         511,667      471,932      8.4
   Accumulated other comprehensive loss      (22,162)     (26,256)   (15.6)
   Treasury stock                            (90,405)     (71,837)    25.8
                                         -----------  -----------  -------
       Total stockholders' equity            770,475      720,156      7.0
                                         -----------  -----------  -------
       Total liabilities and
        stockholders' equity             $ 2,201,512  $ 1,969,414     11.8%
                                         ===========  ===========  =======


KEY DEBT COVENANT METRICS:
   Senior secured leverage ratio (must
    be less than 2.75)                          1.24         1.31
   Total leverage ratio (must be less
    than 4.50)                                  3.61         3.29
   Fixed charge coverage ratio (must be
    greater than 1.25)                          1.70         1.76
   Current ratio (must be greater than
    1.15)                                       1.35         1.34




                         Group 1 Automotive, Inc.
 Consolidated Statements of Adjusted Cash Flows from Operating Activities
                        (Unaudited, In thousands)

                                                  Three Months Ended
                                                     September 30,
                                              ---------------------------
                                                2010      2009    % Change
                                              --------  --------  -------

Net income                                    $ 18,985  $ 18,340      3.5%
Adjustments to reconcile net income to net
 cash provided by operating activities:
  Asset Impairments                              1,639       702    133.5
  Depreciation and amortization                  6,772     6,666      1.6
  Deferred income taxes                         10,062     8,177     23.1
  (Gain) loss on redemption of long-term debt        -      (598)  (100.0)
  (Gain) loss on sale of assets                 (1,282)      842   (252.3)
  Stock-based compensation                       2,329     1,940     20.1
  Amortization of debt discount and issue
   costs                                         2,379     1,270     87.3
  Other                                            416      (309)   234.6
Changes in operating assets and liabilities,
 net of effects of acquisitions and
 dispositions:
  Inventories                                  (59,922)   69,500   (186.2)
  Floorplan notes payable - credit facility     52,865   (83,806)   163.1
  Floorplan notes payable - manufacturer
   affiliates                                    3,029     4,265    (29.0)
  Contracts-in-transit and vehicle receivables  18,600    11,762     58.1
  Accounts and notes receivable                  1,381     6,997    (80.3)
  Prepaid expenses and other assets              3,294     7,668    (57.0)
  Deferred revenues                               (816)     (913)   (10.6)
  Accounts payable and accrued expenses         (5,175)    2,251   (329.9)
                                              --------  --------  -------
Adjusted net cash provided by operating
 activities                                   $ 54,556  $ 54,754     (0.4)%
                                              --------  --------  -------



                                                   Nine Months Ended
                                                      September 30,
                                              ----------------------------
                                                2010      2009    % Change
                                              --------  --------  --------

Net income                                    $ 39,735  $ 36,797       8.0%
Adjustments to reconcile net income to net
 cash provided by operating activities:
  Asset Impairments                              3,121     2,837      10.0
  Depreciation and amortization                 19,936    19,541       2.0
  Deferred income taxes                         22,224    23,078      (3.7)
  (Gain) loss on redemption of long-term debt    3,872    (8,211)    147.2
  (Gain) loss on sale of assets                  3,170        (6) 52,933.3
  Stock-based compensation                       7,505     7,367       1.9
  Amortization of debt discount and issue costs  6,336     5,413      17.1
  Other                                            854      (859)    199.4
Changes in operating assets and liabilities,
 net of effects of acquisitions and
 dispositions:
  Inventories                                 (154,299)  373,146    (141.4)
  Floorplan notes payable - credit facility    164,809  (364,109)    145.3
  Floorplan notes payable - manufacturer
   affiliates                                   (9,548)  (39,454)    (75.8)
  Contracts-in-transit and vehicle receivables  (6,181)   35,909    (117.2)
  Accounts and notes receivable                 (4,938)   20,865    (123.7)
  Prepaid expenses and other assets              5,088     7,304     (30.3)
  Deferred revenues                             (1,759)   (3,477)    (49.4)
  Accounts payable and accrued expenses         10,524   (15,478)    168.0
                                              --------  --------  --------
Adjusted net cash provided by operating
 activities                                   $110,449  $100,663       9.7%
                                              --------  --------  --------





                         Group 1 Automotive, Inc.
                  Additional Information - Consolidated
                                (Unaudited)

                                                Three Months  Nine Months
                                                    Ended         Ended
                                                September 30, September 30,
                                                ------------  ------------
                                                 2010   2009   2010   2009
                                                -----  -----  -----  -----
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
   Region                 Geographic Market
   Eastern                Massachusetts          14.6%  16.6%  14.8%  15.2%
                          New Jersey              6.1    6.2    6.5    6.6
                          Georgia                 4.1    3.5    3.9    3.6
                          New Hampshire           4.0    4.6    4.2    4.1
                          New York                3.7    3.5    3.8    4.1
                          Louisiana               3.3    3.1    3.1    3.2
                          Mississippi             1.7    1.9    1.7    1.8
                          South Carolina          1.6    0.3    1.1    0.3
                          Alabama                 1.2    0.6    1.3    0.6
                          Florida                 0.8    1.3    1.4    1.6
                          Maryland                0.8    0.9    0.8    0.9
                                                -----  -----  -----  -----
                                                 41.9   42.5   42.6   42.0

   Central                Texas                  30.9   31.6   30.8   32.1
                          Oklahoma                7.7    8.2    7.9    8.4
                          Kansas                  0.8    1.2    0.9    1.2
                                                -----  -----  -----  -----
                                                 39.4   41.0   39.6   41.7

   Western                California             14.0   14.2   13.4   14.1

   International          United Kingdom          4.7    2.3    4.4    2.2
                                                -----  -----  -----  -----
                                                100.0% 100.0% 100.0% 100.0%

NEW VEHICLE UNIT SALES BRAND MIX:
   Toyota/Scion/Lexus                            36.5%  38.4%  35.5%  36.2%
   Nissan/Infiniti                               14.1   14.1   14.6   12.9
   BMW/Mini                                      11.9    9.2   11.3    9.5
   Honda/Acura                                   11.8   12.2   12.2   13.0
   Ford                                           7.2    7.4    8.0    7.8
   Mercedes-Benz                                  5.7    4.8    5.6    5.4
   GM                                             3.9    3.4    4.0    3.7
   Chrysler                                       3.0    4.4    2.9    5.7
   Other                                          5.9    6.1    5.9    5.8
                                                -----  -----  -----  -----
                                                100.0% 100.0% 100.0% 100.0%

NEW VEHICLE UNIT SALES OTHER MIX:
   Import                                        58.8%  62.4%  58.3%  58.5%
   Luxury                                        27.1   22.5   27.0   24.4
   Domestic                                      14.1   15.1   14.7   17.1
                                                -----  -----  -----  -----
                                                100.0% 100.0% 100.0% 100.0%

   Car                                           59.4%  62.2%  58.8%  59.1%
   Truck                                         40.6   37.8   41.2   40.9
                                                -----  -----  -----  -----
                                                100.0% 100.0% 100.0% 100.0%








                         Group 1 Automotive, Inc.
                  Additional Information - Consolidated
                                (Unaudited)
              (Dollars in thousands, except per unit amounts)

                                         Three Months Ended September 30,
                                        ---------------------------------
                                           2010        2009      % Change
                                        ----------  ----------  ---------
REVENUES:
   New vehicle retail sales             $  822,121  $  728,089       12.9%
   Used vehicle retail sales               340,625     254,716       33.7
   Used vehicle wholesale sales             58,463      43,151       35.5
                                        ----------  ----------
       Total used                          399,088     297,867       34.0
   Parts and service                       196,264     183,254        7.1
   Finance and insurance                    44,282      37,509       18.1
                                        ----------  ----------
       Total                            $1,461,755  $1,246,719       17.2%

GROSS MARGIN:
   New vehicle retail sales                    5.7%        6.7%
   Used vehicle retail sales                   9.0        10.3
   Used vehicle wholesale sales                0.5         3.0
       Total used                              7.7         9.2
   Parts and service                          54.3        53.7
   Finance and insurance                     100.0       100.0
       Total                                  15.7%       17.0%

GROSS PROFIT:
   New vehicle retail sales             $   47,075  $   48,619       (3.2)%
   Used vehicle retail sales                30,570      26,271       16.4
   Used vehicle wholesale sales                305       1,279      (76.2)
                                        ----------  ----------
       Total used                           30,875      27,550       12.1
   Parts and service                       106,607      98,343        8.4
   Finance and insurance                    44,282      37,509       18.1
                                        ----------  ----------
       Total                            $  228,839  $  212,021        7.9%

UNITS SOLD:
   Retail new vehicles sold                 26,396      25,057        5.3%
   Retail used vehicles sold                17,601      14,175       24.2
   Wholesale used vehicles sold              9,308       8,367       11.2
                                        ----------  ----------
       Total used                           26,909      22,542       19.4%

GROSS PROFIT PER UNIT SOLD:
   New vehicle retail sales             $    1,783  $    1,940       (8.1)%
   Used vehicle retail sales                 1,737       1,853       (6.3)
   Used vehicle wholesale sales                 33         153      (78.4)
       Total used                            1,147       1,222       (6.1)
   Finance and insurance (per retail
    unit)                               $    1,006  $      956        5.2%

OTHER (1):
   SG&A expenses                        $  175,225  $  162,466        7.9%
   SG&A as % revenues                         12.0%       13.0%
   SG&A as % gross profit                     76.6%       76.6%
   Operating margin                            3.2%        3.4%
   Pretax margin                               2.1%        2.2%

FLOORPLAN EXPENSE:
   Floorplan interest                   $   (9,021) $   (7,523)      19.9%
   Floorplan assistance                      6,512       5,771       12.8
                                        ----------  ----------
       Net floorplan expense            $   (2,509) $   (1,752)      43.2%




                                          Nine Months Ended September 30,
                                        ---------------------------------
                                           2010        2009      % Change
                                        ----------  ----------  ---------
REVENUES:
   New vehicle retail sales             $2,254,093  $1,883,973       19.6%
   Used vehicle retail sales               960,376     729,345       31.7
   Used vehicle wholesale sales            156,653     112,536       39.2
                                        ----------  ----------
       Total used                        1,117,029     841,881       32.7
   Parts and service                       575,762     547,224        5.2
   Finance and insurance                   124,533     102,213       21.8
                                        ----------  ----------
       Total                            $4,071,417  $3,375,291       20.6%

GROSS MARGIN:
   New vehicle retail sales                    5.8%        6.0%
   Used vehicle retail sales                   9.3        10.5
   Used vehicle wholesale sales                2.0         3.0
       Total used                              8.3         9.5
   Parts and service                          54.1        53.1
   Finance and insurance                     100.0       100.0
       Total                                  16.2%       17.4%

GROSS PROFIT:
   New vehicle retail sales             $  131,560  $  113,073       16.3%
   Used vehicle retail sales                89,553      76,705       16.7
   Used vehicle wholesale sales              3,088       3,331       (7.3)
                                        ----------  ----------
       Total used                           92,641      80,036       15.7
   Parts and service                       311,278     290,468        7.2
   Finance and insurance                   124,533     102,213       21.8
                                        ----------  ----------
       Total                            $  660,012  $  585,790       12.7%

UNITS SOLD:
   Retail new vehicles sold                 72,128      62,942       14.6%
   Retail used vehicles sold                50,230      41,181       22.0
   Wholesale used vehicles sold             24,716      21,222       16.5
                                        ----------  ----------
       Total used                           74,946      62,403       20.1%

GROSS PROFIT PER UNIT SOLD:
   New vehicle retail sales             $    1,824  $    1,796        1.6%
   Used vehicle retail sales                 1,783       1,863       (4.3)
   Used vehicle wholesale sales                125         157      (20.4)
       Total used                            1,236       1,283       (3.7)
   Finance and insurance (per retail
    unit)                               $    1,018  $      982        3.7%

OTHER (1):
   SG&A expenses                        $  518,481  $  467,516       10.9%
   SG&A as % revenues                         12.7%       13.9%
   SG&A as % gross profit                     78.6%       79.8%
   Operating margin                            3.0%        2.9%
   Pretax margin                               1.9%        1.6%

FLOORPLAN EXPENSE:
   Floorplan interest                   $  (25,220) $  (24,342)       3.6%
   Floorplan assistance                     17,836      15,030       18.7
                                        ----------  ----------
       Net floorplan expense            $   (7,384) $   (9,312)     (20.7)%

(1) These amounts have been adjusted to exclude the impact of certain
    items to provide additional information regarding the performance of
    our operations and improve period-to-period comparability. Refer to
    our Reconciliation of Certain Non-GAAP Financial Measures for a
    description of the aforementioned adjustments.





                         Group 1 Automotive, Inc.
                  Additional Information - Same Store(1)
                                (Unaudited)
              (Dollars in thousands, except per unit amounts)

                                         Three Months Ended September 30,
                                        ----------------------------------
                                           2010        2009      % Change
                                        ----------  ----------  ---------
REVENUES:
   New vehicle retail sales             $  783,782  $  716,630        9.4%
   Used vehicle retail sales               321,260     248,718       29.2
   Used vehicle wholesale sales             54,092      42,213       28.1
                                        ----------  ----------
       Total used                          375,352     290,931       29.0
   Parts and service                       190,157     177,285        7.3
   Finance and insurance                    43,337      36,661       18.2
                                        ----------  ----------
       Total                            $1,392,628  $1,221,507       14.0%

GROSS MARGIN:
   New vehicle retail sales                    5.7%        6.7%
   Used vehicle retail sales                   9.1        10.3
   Used vehicle wholesale sales                0.7         3.1
       Total used                              7.9         9.3
   Parts and service                          54.3        53.9
   Finance and insurance                     100.0       100.0
       Total                                  15.9%       17.0%

GROSS PROFIT:
   New vehicle retail sales             $   44,514  $   47,959       (7.2)%
   Used vehicle retail sales                29,217      25,657       13.9
   Used vehicle wholesale sales                401       1,307      (69.3)
                                        ----------  ----------
       Total used                           29,618      26,964        9.8
   Parts and service                       103,278      95,515        8.1
   Finance and insurance                    43,337      36,661       18.2
                                        ----------  ----------
       Total                            $  220,747  $  207,099        6.6%

UNITS SOLD:
   Retail new vehicles sold                 25,155      24,665        2.0%
   Retail used vehicles sold                16,641      13,774       20.8
   Wholesale used vehicles sold              8,790       8,123        8.2
                                        ----------  ----------
       Total used                           25,431      21,897       16.1%

GROSS PROFIT PER UNIT SOLD:
   New vehicle retail sales             $    1,770  $    1,944       (9.0)%
   Used vehicle retail sales                 1,756       1,863       (5.7)
   Used vehicle wholesale sales                 46         161      (71.4)
       Total used                            1,165       1,231       (5.4)
   Finance and insurance (per retail
    unit)                               $    1,037  $      954        8.7%

OTHER:
   SG&A expenses                        $  167,571  $  157,662        6.3%
   SG&A as % revenues                         12.0%       12.9%
   SG&A as % gross profit                     75.9%       76.1%
   Operating margin                            3.2%        3.5%

FLOORPLAN EXPENSE:
   Floorplan interest                   $   (8,851) $   (7,458)      18.7%
   Floorplan assistance                      6,394       5,654       13.1
                                        ----------  ----------
       Net floorplan expense            $   (2,457) $   (1,804)      36.2%


                                          Nine Months Ended September 30,
                                        ---------------------------------
                                           2010        2009      % Change
                                        ----------  ----------  ---------
REVENUES:
   New vehicle retail sales             $2,170,481  $1,846,689       17.5%
   Used vehicle retail sales               914,386     710,784       28.6
   Used vehicle wholesale sales            147,124     109,691       34.1
                                        ----------  ----------
       Total used                        1,061,510     820,475       29.4
   Parts and service                       560,192     531,810        5.3
   Finance and insurance                   122,408      99,983       22.4
                                        ----------  ----------
       Total                            $3,914,591  $3,298,957       18.7%

GROSS MARGIN:
   New vehicle retail sales                    5.8%        6.0%
   Used vehicle retail sales                   9.4        10.5
   Used vehicle wholesale sales                2.2         3.1
       Total used                              8.4         9.5
   Parts and service                          54.1        53.2
   Finance and insurance                     100.0       100.0
       Total                                  16.4%       17.4%

GROSS PROFIT:
   New vehicle retail sales             $  125,967  $  111,517       13.0%
   Used vehicle retail sales                86,344      74,679       15.6
   Used vehicle wholesale sales              3,298       3,364       (2.0)
                                        ----------  ----------
       Total used                           89,642      78,043       14.9
   Parts and service                       302,920     282,887        7.1
   Finance and insurance                   122,408      99,983       22.4
                                        ----------  ----------
       Total                            $  640,937  $  572,430       12.0%

UNITS SOLD:
   Retail new vehicles sold                 69,411      61,680       12.5%
   Retail used vehicles sold                48,096      39,955       20.4
   Wholesale used vehicles sold             23,626      20,661       14.4
                                        ----------  ----------
       Total used                           71,722      60,616       18.3%

GROSS PROFIT PER UNIT SOLD:
   New vehicle retail sales             $    1,815  $    1,808        0.4%
   Used vehicle retail sales                 1,795       1,869       (4.0)
   Used vehicle wholesale sales                140         163      (14.1)
       Total used                            1,250       1,287       (2.9)
   Finance and insurance (per retail
    unit)                               $    1,042  $      984        5.9%

OTHER:
   SG&A expenses                        $  500,160  $  453,650       10.3%
   SG&A as % revenues                         12.8%       13.8%
   SG&A as % gross profit                     78.0%       79.2%
   Operating margin                            3.1%        3.0%

FLOORPLAN EXPENSE:
   Floorplan interest                   $  (24,785) $  (24,093)       2.9%
   Floorplan assistance                     17,636      14,622       20.6
                                        ----------  ----------
       Net floorplan expense            $   (7,149) $   (9,471)     (24.5)%


(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)

                                                  Three Months Ended
                                                     September 30,
                                              ----------------------------
NET INCOME RECONCILIATION:                      2010      2009    % Change
                                              --------  --------  --------
   As reported                                $ 18,985  $ 18,340       3.5%
     After-tax Adjustments:
       Non-Cash asset impairment charges (2)     1,033       461
       Mortgage debt refinance charges (3)           -         -
       Loss (gain) on dealership
        dispositions (4)                             -         -
       Loss (gain) on debt redemption (5)            -      (393)
       Severance costs related to
        UK-dealership acquisitions (6)               -         -
       Income tax benefit related to tax
        elections for prior periods                  -    (1,604)
       Gain on sale of real estate (7)            (761)        -
                                              --------  --------
         Adjusted net income (1)              $ 19,257  $ 16,804      14.6%


                                                   Nine Months Ended
                                                      September 30,
                                              ----------------------------
NET INCOME RECONCILIATION:                      2010      2009    % Change
                                              --------  --------  --------
   As reported                                $ 39,735  $ 36,797       8.0%
     After-tax Adjustments:
       Non-Cash asset impairment charges (2)     1,983     1,726
       Mortgage debt refinance charges (3)           -       331
       Loss (gain) on dealership
        dispositions (4)                         3,698      (451)
       Loss (gain) on debt redemption (5)        2,458    (5,299)
       Severance costs related to
        UK-dealership acquisitions (6)             405         -
       Income tax benefit related to tax
        elections for prior periods                  -    (1,604)
       Gain on sale of real estate (7)            (761)        -
                                              --------  --------
         Adjusted net income (1)              $ 47,518  $ 31,500      50.9%


                                                  Three Months Ended
                                                     September 30,
                                              ----------------------------
DILUTED INCOME PER SHARE RECONCILIATION (10):   2010      2009    % Change
                                              --------  --------  --------
   As reported                                $   0.83  $   0.78       6.4%
     After-tax Adjustments:
       Non-Cash asset impairment charges          0.04      0.02
       Mortgage debt refinance charges               -         -
       Loss (gain) on dealership disposition         -         -
       Loss (gain) on debt redemption                -     (0.02)
       Severance costs related to
        UK-dealership acquisitions                   -         -
       Income tax benefit related to tax
        elections for prior periods                  -     (0.07)
       Gain on sale of real estate               (0.03)        -
                                              --------  --------
         Adjusted diluted income per
          share (1)                           $   0.84  $   0.71      18.3%


                                                   Nine Months Ended
                                                      September 30,
                                              ----------------------------
DILUTED INCOME PER SHARE RECONCILIATION (10):   2010      2009    % Change
                                              --------  --------  --------
   As reported                                $   1.70  $   1.58       7.6%
     After-tax Adjustments:
       Non-Cash asset impairment charges          0.09      0.08
       Mortgage debt refinance charges               -      0.01
       Loss (gain) on dealership disposition      0.15     (0.02)
       Loss (gain) on debt redemption             0.10     (0.22)
       Severance costs related to
        UK-dealership acquisitions                0.02         -
       Income tax benefit related to tax
        elections for prior periods                  -     (0.07)
       Gain on sale of real estate               (0.03)        -
                                              --------  --------
         Adjusted diluted income per
          share (1)                           $   2.03  $   1.36      49.3%


                                                  Three Months Ended
                                                     September 30,
                                              ----------------------------
SG&A RECONCILIATION:                            2010      2009    % Change
                                              --------  --------  --------
   As reported                                $173,925  $162,466       7.1%
     Pre-tax Adjustments:
       Gain (loss) on dealership dispositions        -         -
       Severance costs related to
        UK-dealership acquisitions                   -         -
       Gain on sale of real estate               1,300         -
                                              --------  --------
         Adjusted SG&A (1)                    $175,225  $162,466       7.9%


                                                   Nine Months Ended
                                                      September 30,
                                              ----------------------------
SG&A RECONCILIATION:                            2010      2009    % Change
                                              --------  --------  --------
   As reported                                $522,796  $466,813      12.0%
     Pre-tax Adjustments:
       Gain (loss) on dealership dispositions   (5,053)      703
       Severance costs related to
        UK-dealership acquisitions                (562)        -
       Gain on sale of real estate               1,300         -
                                              --------  --------
         Adjusted SG&A (1)                    $518,481  $467,516      10.9%


                                              Three Months Ended
                                                 September 30,
                                              ------------------
SG&A AS % REVENUES:                             2010      2009
                                              --------  --------
   Unadjusted                                     11.9%     13.0%
   Adjusted (1)                                   12.0%     13.0%


                                               Nine Months Ended
                                                 September 30,
                                              ------------------
SG&A AS % REVENUES:                             2010      2009
                                              --------  --------
   Unadjusted                                     12.8%     13.8%
   Adjusted (1)                                   12.7%     13.9%


                                              Three Months Ended
                                                 September 30,
                                              ------------------
SG&A AS % OF GROSS PROFIT:                      2010      2009
                                              --------  --------
   Unadjusted                                     76.0%     76.6%
   Adjusted (1)                                   76.6%     76.6%


                                               Nine Months Ended
                                                 September 30,
                                              ------------------
SG&A AS % OF GROSS PROFIT:                      2010      2009
                                              --------  --------
   Unadjusted                                     79.2%     79.7%
   Adjusted (1)                                   78.6%     79.8%


                                              Three Months Ended
                                                 September 30,
                                              ------------------
OPERATING MARGIN:                               2010      2009
                                              --------  --------
   Unadjusted                                      3.2%      3.4%
   Adjusted (1), (8)                               3.2%      3.4%


                                               Nine Months Ended
                                                 September 30,
                                              ------------------
OPERATING MARGIN:                               2010      2009
                                              --------  --------
   Unadjusted                                      2.8%      2.9%
   Adjusted (1), (8)                               3.0%      2.9%


                                              Three Months Ended
                                                 September 30,
                                              ------------------
PRETAX MARGIN:                                  2010      2009
                                              --------  --------
   Unadjusted                                      2.1%      2.2%
   Adjusted (1), (9)                               2.1%      2.2%


                                               Nine Months Ended
                                                 September 30,
                                              ------------------
PRETAX MARGIN:                                  2010      2009
                                              --------  --------
   Unadjusted                                      1.6%      1.7%
   Adjusted (1), (9)                               1.9%      1.6%


                                                  Three Months Ended
                                                      September 30,
                                              ---------------------------
CASH FLOWS FROM OPERATING ACTIVITIES                                  %
 RECONCILIATION:                                2010      2009     Change
                                              --------- --------  -------

   Net cash provided by (used in) operating
    activities                                $   1,691 $138,560    (98.8)%
       Change in floorplan notes
        payable-credit facility, excluding
        floorplan offset account                 52,865  (83,806)
                                              --------- --------
         Adjusted net cash provided by
          operating activities (1)            $  54,556 $ 54,754     (0.4)%


                                                  Nine Months Ended
                                                     September 30,
                                              ----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES                                  %
 RECONCILIATION:                                2010      2009     Change
                                              --------  --------  -------

   Net cash provided by (used in) operating
    activities                                $(54,360) $464,772   (111.7)%
       Change in floorplan notes
        payable-credit facility, excluding
        floorplan offset account               164,809  (364,109)
                                              --------  --------
         Adjusted net cash provided by
          operating activities (1)            $110,449  $100,663      9.7%

 (1)  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 benefit of $606 and $1,138 for the three
 and nine months ended September 30, 2010, and $241 and $1,111 for the
 three and nine months ended September 30, 2009, 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 nine months ended
 September 30, 2009, calculated utilizing the applicable federal and state
 tax rates for the adjustment.

 (4)  Adjustments are net of tax benefit of $1,355 for the nine months
 ended September 30, 2010 and tax provision of $252 for the nine months
 ended September 30, 2009, calculated utilizing the applicable federal and
 state tax rates for the adjustment.

 (5)  Adjustments are net of tax benefit of $1,414 for the nine months
 ended September 30, 2010 and tax provision of $205 and $3,446 for the
 three and nine months ended September 30, 2009, respectively, calculated
 utilizing the applicable federal and state tax rates for the adjustment.

 (6)  Adjustment is net of a tax benefit of $157 for the nine months ended
 September 30, 2010, calculated utilizing the applicable UK corporate tax
 rate for the adjustment.

 (7)  Adjustment is net of a tax provision of $539 for the three and nine
 months ended September 30, 2010, calculated utilizing the applicable
 federal and state tax rate for the adjustment.

 (8)  Excludes the impact of non-cash asset impairment charges, gain/loss
 on dealership dispositions, severance costs related to UK-dealership
 acquisitions, and gain/loss on sale of real estate.

 (9)  Excludes the impact of non-cash asset impairment charges, mortgage
 debt refinance charges, gain/loss on dealership dispositions, gain/loss on
 debt redemption, severance costs related to UK-dealership acquisitions,
 and gain/loss on sale of real estate.

 (10)  The sum of the quarterly income per share amounts may not equal the
 year-to-date amount reported, as per share amounts are computed
 independently for each quarter and for the year-to-date, based on the
 respective weighted average common shares outstanding.

Contact Information

  • Investor contacts:
    Kim Paper Canning, Manager, Investor Relations | Group 1 Automotive, Inc. |
    713-647-5741 | Email Contact

    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 |
    Email Contact