SOURCE: Group 1 Automotive, Inc.

Group 1 Automotive, Inc.

July 26, 2011 06:00 ET

Group 1 Automotive Reports Record Second-Quarter Results

Higher Gross Profits, Expense Control Overcome Japanese Brand Supply Shortage

HOUSTON, TX--(Marketwire - Jul 26, 2011) - Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today reported record second-quarter earnings of $1.06 per diluted share on net income of $24.7 million for the period ended June 30.

"Despite an industry SAAR nearly one million units below the first quarter and severe supply shortages in the 62 percent of our business normally represented by Japanese brands, Group 1's operating team turned in one of the best profit performances in our company's history," said Earl J. Hesterberg, Group 1's president and chief executive officer. "We were able to generate revenue increases in every business segment, significantly increase our new and used vehicle margins and maintain strong expense controls in a constrained vehicle sales market."

Group 1 reported second-quarter total revenues of $1.5 billion, a 3.9 percent increase from the prior-year period. Gross profit grew 7.7 percent to $244.2 million, as the company successfully managed through the low-inventory sales environment. Selling, general and administrative expense as a percent of gross profit improved significantly to 75.0 percent, as the combination of continued cost control and expanding gross profit significantly leveraged the cost structure.

Second-Quarter Highlights

  • Earnings per diluted share of $1.06 is the best second-quarter results ever posted and the second-best quarter in the history of Group 1.
  • Pretax income of $39.7 million is the second highest ever for Group 1.
  • New vehicle revenues increased 3.1 percent on 4.0 percent fewer unit sales.
  • New vehicle gross profit grew 20.3 percent, as gross profit increased $455 to $2,252 per retail unit sold.
  • Retail used vehicle gross profit increased 6.2 percent on 3.8 percent higher revenues, as gross profit increased $164, to $2,009 per retail unit.
  • Parts and service revenues increased 5.2 percent, reflecting increases in all segments of the business.
  • Finance and insurance gross profit per retail unit increased $125 to $1,126, on higher finance income per contract and vehicle service contract penetration rates.
  • Selling, general and administrative expense as a percent of gross profit improved significantly to 75.0 percent, as total gross profit notably outpaced expenses in the quarter.
  • Operating margin increased to 3.7 percent -- matching the best ever quarterly result.

Year-to-Date Results
On a same-store basis, Group 1 reported 7.1 percent growth in gross profit on 9.1 percent higher revenues, reflecting increases in all operating segments from the prior year. New vehicle gross profit grew 13.8 percent on 10.3 percent higher revenues; used vehicle gross profit was 7.4 percent higher on a 9.1 percent revenue increase; finance and insurance revenues increased 12.3 percent on 3.9 percent more retail unit sales; and, parts and service revenues were 3.7 percent higher. Selling, general and administrative expenses as a percent of revenues improved 60 basis points to 12.5 percent, as expenses grew at a slower pace than revenues.

Share Repurchases
During the second quarter, Group 1 repurchased 381,610 shares of its common stock at an average price of $36.69 under a board-authorized $25.0 million share repurchase program. At the end of the second quarter, $3.5 million remained under the authorization.

Corporate Development Update
As previously announced, in the second quarter Group 1 acquired BMW, MINI, Ford, Buick and GMC franchises that are expected to generate $245.0 million in total estimated annualized revenues. Year to date, the company has acquired seven franchises estimated to generate $340.0 million in annualized revenues including the second-quarter acquisitions.

Group 1 also announced that it disposed of a Mitsubishi and a Lincoln franchise during the second quarter. In total, the two franchises generated $4.1 million in trailing-12-month revenues.

Hesterberg added, "In addition to delivering very strong operating results in the first half of 2011, Group 1 has used its cash to acquire attractive brands in growing markets, increase our dividend and repurchase shares to return value to our shareholders."

Second-Quarter Earnings Conference Call
Group 1's senior management will host a conference call today at 10 a.m. ET to discuss the second-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: 888.395.3241
International: 719.457.2647
Participant Passcode: 3942401

A telephonic replay will be available following the call through Aug. 25 by dialing:

Domestic: 888.203.1112
International: 719.457.0820
Replay Passcode: 3942401

About Group 1 Automotive, Inc.
Group 1 owns and operates 105 automotive dealerships, 134 franchises, and 28 collision service centers in the United States and the United Kingdom that offer 29 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 June 30,
                                     -------------------------------------
                                         2011         2010       % Change
                                     -----------  -----------  ----------
REVENUES:
New vehicle retail sales             $   809,881  $   785,851         3.1 %
Used vehicle retail sales                353,047      340,142         3.8
Used vehicle wholesale sales              60,607       55,678         8.9
Parts and service                        204,091      194,063         5.2
Finance and insurance                     46,519       42,775         8.8
                                     -----------  -----------  ----------
      Total revenues                   1,474,145    1,418,509         3.9

COST OF SALES:
New vehicle retail sales                 755,617      740,740         2.0
Used vehicle retail sales                318,499      307,596         3.5
Used vehicle wholesale sales              58,940       54,558         8.0
Parts and service                         96,878       88,963         8.9
                                     -----------  -----------  ----------
      Total cost of sales              1,229,934    1,191,857         3.2

                                     -----------  -----------  ----------
GROSS PROFIT                             244,211      226,652         7.7

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                 183,051      182,465         0.3

DEPRECIATION AND
 AMORTIZATION EXPENSE                      6,581        6,679        (1.5)

ASSET IMPAIRMENTS                            142        1,482       (90.4)
                                     -----------  -----------  ----------
OPERATING INCOME                          54,437       36,026        51.1

OTHER EXPENSE:
Floorplan interest expense                (6,521)      (8,633)      (24.5)

Other interest expense, net               (8,225)      (6,267)       31.2

Loss on redemption of long-term debt           -            -           -

                                     -----------  -----------  ----------
INCOME BEFORE INCOME TAXES                39,691       21,126        87.9

PROVISION FOR INCOME TAXES               (15,008)      (8,357)       79.6

                                     -----------  -----------  ----------
NET INCOME                           $    24,683  $    12,769        93.3 %
                                     ===========  ===========  ==========


DILUTED INCOME PER SHARE             $      1.06  $      0.54        96.3 %

Weighted average dilutive shares
 outstanding                              23,183       23,638        (1.9)%



                                           Six Months Ended June 30,
                                     -------------------------------------
                                         2011         2010       % Change
                                     -----------  -----------  ----------
REVENUES:
New vehicle retail sales             $ 1,594,595  $ 1,431,972        11.4 %
Used vehicle retail sales                676,494      619,751         9.2
Used vehicle wholesale sales             122,558       98,190        24.8
Parts and service                        399,041      379,498         5.1
Finance and insurance                     90,759       80,251        13.1
                                     -----------  -----------  ----------
      Total revenues                   2,883,447    2,609,662        10.5

COST OF SALES:
New vehicle retail sales               1,497,559    1,347,487        11.1
Used vehicle retail sales                613,046      560,768         9.3
Used vehicle wholesale sales             118,397       95,407        24.1
Parts and service                        188,459      174,827         7.8
                                     -----------  -----------  ----------
      Total cost of sales              2,417,461    2,178,489        11.0

                                     -----------  -----------  ----------
GROSS PROFIT                             465,986      431,173         8.1

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                 358,935      348,871         2.9

DEPRECIATION AND
 AMORTIZATION EXPENSE                     13,036       13,164        (1.0)

ASSET IMPAIRMENTS                            364        1,482       (75.4)
                                     -----------  -----------  ----------
OPERATING INCOME                          93,651       67,656        38.4

OTHER EXPENSE:
Floorplan interest expense               (13,281)     (16,199)      (18.0)

Other interest expense, net              (16,167)     (13,371)       20.9

Loss on redemption of long-term debt           -       (3,872)     (100.0)

                                     -----------  -----------  ----------
INCOME BEFORE INCOME TAXES                64,203       34,214        87.7

PROVISION FOR INCOME TAXES               (24,158)     (13,464)       79.4

                                     -----------  -----------  ----------
NET INCOME                           $    40,045  $    20,750        93.0 %
                                     ===========  ===========  ==========


DILUTED INCOME PER SHARE             $      1.72  $      0.88        95.5 %

Weighted average dilutive shares
 outstanding                              23,223       23,663        (1.9)%




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


                                           June 30,  December 31,
                                             2011        2010     % Change
                                          ----------  ----------  -------
                                         (Unaudited)
ASSETS:

CURRENT ASSETS:
   Cash and cash equivalents              $   12,285  $   19,843    (38.1)%
   Contracts in transit and vehicle
    receivables, net                         105,835     113,846     (7.0)
   Accounts and notes receivable, net         71,504      75,623     (5.4)
   Inventories                               779,679     777,771      0.2
   Deferred income taxes                      15,690      14,819      5.9
   Prepaid expenses and other current
    assets                                    10,615      17,332    (38.8)
                                          ----------  ----------  -------
       Total current assets                  995,608   1,019,234     (2.3)
PROPERTY AND EQUIPMENT, net                  550,134     506,288      8.7
GOODWILL AND INTANGIBLE FRANCHISE RIGHTS     693,517     666,656      4.0
OTHER ASSETS                                   8,618       9,786    (11.9)
                                          ----------  ----------  -------
       Total assets                       $2,247,877  $2,201,964      2.1 %
                                          ==========  ==========  =======

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
   Floorplan notes payable - credit
    facility                              $  637,242  $  690,051     (7.7)%
       Offset account related to
        floorplan notes payable - credit
        facility                            (134,170)   (129,211)     3.8
   Floorplan notes payable - manufacturer
    affiliates                               136,049     103,345     31.6
   Current maturities of long-term debt       12,874      53,189    (75.8)
   Current liabilities from interest rate
    risk management activities                   815       1,098    (25.8)
   Accounts payable                          109,079      92,799     17.5
   Accrued expenses                           95,332      83,663     13.9
                                          ----------  ----------  -------
       Total current liabilities             857,221     894,934     (4.2)
2.25% CONVERTIBLE SENIOR NOTES (aggregate
 principal of $182,753 at June 30, 2011
 and December 31, 2010)                      141,505     138,155      2.4
3.00% CONVERTIBLE SENIOR NOTES (aggregate
 principal of $115,000 at June 30, 2011
 and December 31, 2010)                       75,850      74,365      2.0
MORTGAGE FACILITY, net of current
 maturities                                   39,938           -    100.0
OTHER REAL ESTATE RELATED AND LONG-TERM
 DEBT, net of current maturities             157,917     161,611     (2.3)
CAPITAL LEASE OBLIGATIONS RELATED TO REAL
 ESTATE, net of current maturities            38,507      38,819     (0.8)
DEFERRED INCOME TAXES                         70,884      58,970     20.2
LIABILITIES FROM INTEREST RATE RISK
 MANAGEMENT ACTIVITIES                        16,381      16,426     (0.3)
OTHER LIABILITIES                             33,436      31,036      7.7
DEFERRED REVENUES                              2,332       3,280    (28.9)

STOCKHOLDERS' EQUITY:
   Common stock                                  262         261      0.4
   Additional paid-in capital                367,303     363,966      0.9
   Retained earnings                         554,640     519,843      6.7
   Accumulated other comprehensive loss      (17,155)    (18,755)    (8.5)
   Treasury stock                            (91,144)    (80,947)    12.6
                                          ----------  ----------  -------
       Total stockholders' equity            813,906     784,368      3.8
                                          ----------  ----------  -------
       Total liabilities and
        stockholders' equity              $2,247,877  $2,201,964      2.1 %
                                          ==========  ==========  =======




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


                                             Three Months Ended June 30,
                                           -------------------------------
                                             2011       2010     % Change
                                           ---------  ---------  ---------

Net income                                 $  24,683  $  12,769       93.3%
Adjustments to reconcile net income to net
 cash provided by operating activities:
  Asset impairments                              142      1,482      (90.4)
  Depreciation and amortization                6,581      6,679       (1.5)
  Deferred income taxes                        7,062      7,832       (9.8)
  Loss on redemption of long-term debt             -          -          -
  (Gain) loss on disposition of assets and
   franchise                                    (786)     4,297     (118.3)
  Stock-based compensation                     2,814      2,479       13.5
  Amortization of debt discount and issue
   costs                                       2,970      2,322       27.9
  Other                                           71        244      (70.9)
Changes in operating assets and liabilities,
 net of effects of acquisitions and
 dispositions:
  Accounts payable and accrued expenses       14,453     (7,261)     299.0
  Accounts and notes receivable               (3,315)    (3,228)       2.7
  Inventories                                 47,067    (46,143)     202.0
  Contracts-in-transit and vehicle
   receivables                                11,750     (5,684)     306.7
  Prepaid expenses and other assets             (374)       172     (317.4)
  Floorplan notes payable - credit
   facility (1)                              (69,722)    39,668     (275.8)
  Floorplan notes payable - manufacturer
   affiliates (2)                             10,829     (4,421)     344.9
  Deferred revenues                             (447)       (45)     893.3
                                           ---------  ---------  ---------
Adjusted net cash provided by operating
 activities                                $  53,778  $  11,162      381.8%
                                           ---------  ---------  ---------



                                              Six Months Ended June 30,
                                           -------------------------------
                                             2011       2010     % Change
                                           ---------  ---------  ---------

Net income                                 $  40,045  $  20,750       93.0%
Adjustments to reconcile net income to net
 cash provided by operating activities:
  Asset impairments                              364      1,482      (75.4)
  Depreciation and amortization               13,036     13,164       (1.0)
  Deferred income taxes                       14,110     12,162       16.0
  Loss on redemption of long-term debt             -      3,872     (100.0)
  (Gain) loss on disposition of assets and
   franchise                                    (786)     4,452     (117.7)
  Stock-based compensation                     5,558      5,176        7.4
  Amortization of debt discount and issue
   costs                                       5,848      3,957       47.8
  Other                                         (102)       438     (123.3)
Changes in operating assets and liabilities,
 net of effects of acquisitions and
 dispositions:
  Accounts payable and accrued expenses       24,889     15,699       58.5
  Accounts and notes receivable                3,963     (6,319)     162.7
  Inventories                                 52,803    (94,377)     155.9
  Contracts-in-transit and vehicle
   receivables                                 8,127    (24,781)     132.8
  Prepaid expenses and other assets            1,023      1,794      (43.0)
  Floorplan notes payable - credit
   facility (1)                              (73,286)   107,215     (168.4)
  Floorplan notes payable - manufacturer
   affiliates (2)                              5,866    (14,787)     139.7
  Deferred revenues                             (948)      (943)       0.5
                                           ---------  ---------  ---------
Adjusted net cash provided by operating
 activities                                $ 100,510  $  48,954      105.3%
                                           ---------  ---------  ---------

(1) Excludes net acquisition/(disposition) related activity of $17,926 and
    $20,476 for the three and six months ended June 30, 2011, respectively,
    and $4,729 for the three and six months ended June 30, 2010.
(2) Excludes net acquisition/(disposition) related activity of $22,419 and
    $26,578 for the three and six months ended June 30, 2011, respectively,
    and ($7,463) and $2,210 for the three and six months ended
    June 30, 2010, respectively.





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

                                                Three Months   Six Months
                                                   Ended         Ended
                                                  June 30,      June 30,
                                                ------------  ------------
                                                2011   2010   2011   2010
                                                -----  -----  -----  -----
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:

   Region                     Geographic Market
   ------                     -----------------
   Eastern                    Massachusetts      11.2%  14.9%  12.0%  15.1%
                              New Jersey          5.9    6.8    5.9    6.6
                              New York            4.3    3.9    3.8    3.8
                              Georgia             3.2    3.8    3.6    3.8
                              New Hampshire       3.0    4.0    3.2    4.2
                              Louisiana           3.0    3.2    3.1    3.1
                              Mississippi         1.9    1.5    2.0    1.7
                              South Carolina      1.2    1.3    1.4    0.8
                              Alabama             1.1    1.2    1.2    1.3
                              Maryland            1.0    0.8    0.8    0.8
                              Florida             0.8    1.6    0.7    1.7
                                                -----  -----  -----  -----
                                                 36.6   43.0   37.7   42.9

   Central                    Texas              34.6   30.5   33.3   30.7
                              Oklahoma            8.2    8.4    8.1    8.1
                              Kansas              1.1    0.9    1.0    0.9
                                                -----  -----  -----  -----
                                                 43.9   39.8   42.4   39.7

   Western                    California         13.9   12.5   14.6   13.1

   International              United Kingdom      5.6    4.7    5.3    4.3
                                                -----  -----  -----  -----
                                                100.0% 100.0% 100.0% 100.0%

NEW VEHICLE UNIT SALES BRAND MIX:
   Toyota/Scion/Lexus                            28.5%  35.1%  31.5%  34.9%
   BMW/Mini                                      14.9   11.5   13.3   11.0
   Nissan/Infiniti                               12.7   14.1   13.4   14.9
   Honda/Acura                                   11.3   12.3   12.1   12.4
   Ford                                           8.3    8.3    7.7    8.4
   Mercedes-Benz                                  6.4    5.5    5.8    5.6
   GM                                             5.0    4.2    4.8    4.0
   Chrysler                                       4.7    3.0    4.1    2.9
   Other                                          8.2    6.0    7.3    5.9
                                                -----  -----  -----  -----
                                                100.0% 100.0% 100.0% 100.0%

NEW VEHICLE UNIT SALES OTHER MIX:
   Import                                        52.2%  57.8%  55.5%  58.1%
   Luxury                                        30.0   26.9   28.0   26.9
   Domestic                                      17.8   15.3   16.5   15.0
                                                -----  -----  -----  -----
                                                100.0% 100.0% 100.0% 100.0%

   Car                                           55.9%  59.0%  56.0%  58.4%
   Truck                                         44.1   41.0   44.0   41.6
                                                -----  -----  -----  -----
                                                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 June 30,
                                     -------------------------------------
                                         2011         2010       % Change
                                     -----------  -----------  ----------
REVENUES:
    New vehicle retail sales         $   809,881  $   785,851         3.1 %
    Used vehicle retail sales            353,047      340,142         3.8
    Used vehicle wholesale sales          60,607       55,678         8.9
                                     -----------  -----------
        Total used                       413,654      395,820         4.5
    Parts and service                    204,091      194,063         5.2
    Finance and insurance                 46,519       42,775         8.8
                                     -----------  -----------
        Total                        $ 1,474,145  $ 1,418,509         3.9 %

GROSS MARGIN:
    New vehicle retail sales                 6.7%         5.7%
    Used vehicle retail sales                9.8          9.6
    Used vehicle wholesale sales             2.8          2.0
        Total used                           8.8          8.5
    Parts and service                       52.5         54.2
    Finance and insurance                  100.0        100.0
        Total                               16.6%        16.0%

GROSS PROFIT:
    New vehicle retail sales         $    54,264  $    45,111        20.3 %
    Used vehicle retail sales             34,548       32,546         6.2
    Used vehicle wholesale sales           1,667        1,120        48.8
                                     -----------  -----------
        Total used                        36,215       33,666         7.6
    Parts and service                    107,213      105,100         2.0
    Finance and insurance                 46,519       42,775         8.8
                                     -----------  -----------
        Total                        $   244,211  $   226,652         7.7 %

UNITS SOLD:
    Retail new vehicles sold              24,097       25,101        (4.0)%
    Retail used vehicles sold             17,200       17,636        (2.5)
    Wholesale used vehicles sold           8,494        8,692        (2.3)
                                     -----------  -----------
        Total used                        25,694       26,328        (2.4)%

GROSS PROFIT PER UNIT SOLD:
    New vehicle retail sales         $     2,252  $     1,797        25.3 %
    Used vehicle retail sales              2,009        1,845         8.9
    Used vehicle wholesale sales             196          129        51.9
        Total used                         1,409        1,279        10.2
    Finance and insurance (per
     retail unit)                    $     1,126  $     1,001        12.5 %

OTHER (1):
    SG&A expenses                    $   183,051  $   176,850         3.5 %
    SG&A as % revenues                      12.4%        12.5%
    SG&A as % gross profit                  75.0%        78.0%
    Operating margin                         3.7%         3.0%
    Pretax margin                            2.7%         2.0%

FLOORPLAN EXPENSE:
    Floorplan interest               $    (6,521) $    (8,633)      (24.5)%
    Floorplan assistance                   5,886        6,089        (3.3)
                                     -----------  -----------
        Net floorplan expense        $      (635) $    (2,544)      (75.0)%




                                           Six Months Ended June 30,
                                     -------------------------------------
                                         2011         2010       % Change
                                     -----------  -----------  ----------
REVENUES:
    New vehicle retail sales         $ 1,594,595  $ 1,431,972        11.4 %
    Used vehicle retail sales            676,494      619,751         9.2
    Used vehicle wholesale sales         122,558       98,190        24.8
                                     -----------  -----------
        Total used                       799,052      717,941        11.3
    Parts and service                    399,041      379,498         5.1
    Finance and insurance                 90,759       80,251        13.1
                                     -----------  -----------
        Total                        $ 2,883,447  $ 2,609,662        10.5 %

GROSS MARGIN:
    New vehicle retail sales                 6.1%         5.9%
    Used vehicle retail sales                9.4          9.5
    Used vehicle wholesale sales             3.4          2.8
        Total used                           8.5          8.6
    Parts and service                       52.8         53.9
    Finance and insurance                  100.0        100.0
        Total                               16.2%        16.5%

GROSS PROFIT:
    New vehicle retail sales         $    97,036  $    84,485        14.9 %
    Used vehicle retail sales             63,448       58,983         7.6
    Used vehicle wholesale sales           4,161        2,783        49.5
                                     -----------  -----------
        Total used                        67,609       61,766         9.5
    Parts and service                    210,582      204,671         2.9
    Finance and insurance                 90,759       80,251        13.1
                                     -----------  -----------
        Total                        $   465,986  $   431,173         8.1 %

UNITS SOLD:
    Retail new vehicles sold              48,801       45,732         6.7 %
    Retail used vehicles sold             33,930       32,629         4.0
    Wholesale used vehicles sold          17,549       15,408        13.9
                                     -----------  -----------
        Total used                        51,479       48,037         7.2 %

GROSS PROFIT PER UNIT SOLD:
    New vehicle retail sales         $     1,988  $     1,847         7.6 %
    Used vehicle retail sales              1,870        1,808         3.4
    Used vehicle wholesale sales             237          181        30.9
        Total used                         1,313        1,286         2.1
    Finance and insurance (per
     retail unit)                    $     1,097  $     1,024         7.1 %

OTHER (1):
    SG&A expenses                    $   358,935  $   343,256         4.6 %
    SG&A as % revenues                      12.4%        13.2%
    SG&A as % gross profit                  77.0%        79.6%
    Operating margin                         3.3%         2.9%
    Pretax margin                            2.2%         1.7%

FLOORPLAN EXPENSE:
    Floorplan interest               $   (13,281) $   (16,199)      (18.0)%
    Floorplan assistance                  12,096       11,323         6.8
                                     -----------  -----------
        Net floorplan expense        $    (1,185) $    (4,876)      (75.7)%

(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 June 30,
                                     -------------------------------------
                                         2011         2010       % Change
                                     -----------  -----------  ----------
REVENUES:
   New vehicle retail sales          $   788,838  $   772,400         2.1 %
   Used vehicle retail sales             343,758      336,540         2.1
   Used vehicle wholesale sales           59,445       54,222         9.6
                                     -----------  -----------
       Total used                        403,203      390,762         3.2
   Parts and service                     195,729      189,790         3.1
   Finance and insurance                  45,343       42,214         7.4
                                     -----------  -----------
       Total                         $ 1,433,113  $ 1,395,166         2.7 %

GROSS MARGIN:
   New vehicle retail sales                  6.7%         5.8%
   Used vehicle retail sales                 9.8          9.6
   Used vehicle wholesale sales              2.9          2.2
       Total used                            8.8          8.6
   Parts and service                        53.3         54.3
   Finance and insurance                   100.0        100.0
       Total                                16.6%        16.0%

GROSS PROFIT:
   New vehicle retail sales          $    52,990  $    44,501        19.1 %
   Used vehicle retail sales              33,601       32,292         4.1
   Used vehicle wholesale sales            1,696        1,200        41.3
                                     -----------  -----------
       Total used                         35,297       33,492         5.4
   Parts and service                     104,254      103,089         1.1
   Finance and insurance                  45,343       42,214         7.4
                                     -----------  -----------
       Total                         $   237,884  $   223,296         6.5 %

UNITS SOLD:
   Retail new vehicles sold               23,412       24,717        (5.3)%
   Retail used vehicles sold              16,716       17,416        (4.0)
   Wholesale used vehicles sold            8,303        8,532        (2.7)
                                     -----------  -----------
       Total used                         25,019       25,948        (3.6)%

GROSS PROFIT PER UNIT SOLD:
   New vehicle retail sales          $     2,263  $     1,800        25.7 %
   Used vehicle retail sales               2,010        1,854         8.4
   Used vehicle wholesale sales              204          141        44.7
       Total used                          1,411        1,291         9.3
   Finance and insurance (per retail
    unit)                            $     1,130  $     1,002        12.8 %

OTHER:
   SG&A expenses                     $   178,138  $   173,177         2.9 %
   SG&A as % revenues                       12.4%        12.4%
   SG&A as % gross profit                   74.9%        77.6%
   Operating margin                          3.7%         3.1%

FLOORPLAN EXPENSE:
   Floorplan interest                $    (6,344) $    (8,494)      (25.3)%
   Floorplan assistance                    5,746        5,976        (3.8)
                                     -----------  -----------
       Net floorplan expense         $      (598) $    (2,518)      (76.3)%




                                           Six Months Ended June 30,
                                     -------------------------------------
                                         2011         2010       % Change
                                     -----------  -----------  ----------
REVENUES:
   New vehicle retail sales          $ 1,551,402  $ 1,406,784        10.3 %
   Used vehicle retail sales             654,721      613,030         6.8
   Used vehicle wholesale sales          118,612       96,048        23.5
                                     -----------  -----------
       Total used                        773,333      709,078         9.1
   Parts and service                     384,507      370,878         3.7
   Finance and insurance                  88,846       79,087        12.3
                                     -----------  -----------
       Total                         $ 2,798,088  $ 2,565,827         9.1 %

GROSS MARGIN:
   New vehicle retail sales                  6.1%         5.9%
   Used vehicle retail sales                 9.4          9.5
   Used vehicle wholesale sales              3.5          3.0
       Total used                            8.5          8.7
   Parts and service                        53.3         54.1
   Finance and insurance                   100.0        100.0
       Total                                16.2%        16.5%

GROSS PROFIT:
   New vehicle retail sales          $    94,657  $    83,145        13.8 %
   Used vehicle retail sales              61,684       58,494         5.5
   Used vehicle wholesale sales            4,174        2,853        46.3
                                     -----------  -----------
       Total used                         65,858       61,347         7.4
   Parts and service                     204,978      200,620         2.2
   Finance and insurance                  88,846       79,087        12.3
                                     -----------  -----------
       Total                         $   454,339  $   424,199         7.1 %

UNITS SOLD:
   Retail new vehicles sold               47,380       45,002         5.3 %
   Retail used vehicles sold              32,870       32,212         2.0
   Wholesale used vehicles sold           16,988       15,151        12.1
                                     -----------  -----------
       Total used                         49,858       47,363         5.3 %

GROSS PROFIT PER UNIT SOLD:
   New vehicle retail sales          $     1,998  $     1,848         8.1 %
   Used vehicle retail sales               1,877        1,816         3.4
   Used vehicle wholesale sales              246          188        30.9
       Total used                          1,321        1,295         2.0
   Finance and insurance (per retail
    unit)                            $     1,107  $     1,024         8.1 %

OTHER:
   SG&A expenses                     $   348,554  $   335,038         4.0 %
   SG&A as % revenues                       12.5%        13.1%
   SG&A as % gross profit                   76.7%        79.0%
   Operating margin                          3.3%         3.0%

FLOORPLAN EXPENSE:
   Floorplan interest                $   (12,970) $   (15,923)      (18.5)%
   Floorplan assistance                   11,888       11,072         7.4
                                     -----------  -----------
       Net floorplan expense         $    (1,082) $    (4,851)      (77.7)%

(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 June 30,
NET INCOME RECONCILIATION:                 2011        2010      % Change
                                        ----------  ----------  ----------
   As reported                          $   24,683  $   12,769        93.3%
     After-tax Adjustments:
       Non-Cash asset impairment
        charges (2)                             85         950
       Loss on dealership dispositions (3)       -       3,698
       Loss on debt redemption (4)               -           -
       Severance costs related to
        UK-dealership acquisitions (5)           -         405
                                        ----------  ----------
         Adjusted net income (1)        $   24,768  $   17,822        39.0%

DILUTED INCOME PER SHARE RECONCILIATION:
   As reported                          $     1.06  $     0.54        96.3%
     After-tax Adjustments:
       Non-Cash asset impairment
        charges                                  -        0.04
       Loss on dealership dispositions           -        0.15
       Loss on debt redemption                   -           -
       Severance costs related to
        UK-dealership acquisitions               -        0.02
                                        ----------  ----------
         Adjusted diluted income per
          share (1)                     $     1.06  $     0.75        41.3%

SG&A RECONCILIATION:
   As reported                          $  183,051  $  182,465         0.3%
     Pre-tax Adjustments:
       Loss on dealership dispositions           -      (5,053)
       Severance costs related to
        UK-dealership acquisitions               -        (562)
                                        ----------  ----------
         Adjusted SG&A (1)              $  183,051  $  176,850         3.5%

SG&A AS % REVENUES:
   Unadjusted                                 12.4%       12.9%
   Adjusted (1)                               12.4%       12.5%

SG&A AS % OF GROSS PROFIT:
   Unadjusted                                 75.0%       80.5%
   Adjusted (1)                               75.0%       78.0%

OPERATING MARGIN:
   Unadjusted                                  3.7%        2.5%
   Adjusted (1), (6)                           3.7%        3.0%

PRETAX MARGIN:
   Unadjusted                                  2.7%        1.5%
   Adjusted (1), (7)                           2.7%        2.0%




                                            Three Months Ended June 30,
                                        ----------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES       2011        2010      % Change
                                        ----------  ----------  ----------
RECONCILIATION:
   Net cash provided by (used in)
    operating activities                $  145,919  $  (35,969)      505.7%
       Change in floorplan notes
        payable-credit facility,
        excluding floorplan offset
        account and net acquisition and
        disposition related activity       (69,722)     39,668
       Change in floorplan notes
        payable-manufacturer affiliates
        associated with net acquisition
        and disposition related activity   (22,419)      7,463
                                        ----------  ----------
         Adjusted net cash provided by
          operating activities (1)      $   53,778  $   11,162       381.8%



                                             Six Months Ended June 30,
NET INCOME RECONCILIATION:                 2011        2010      % Change
                                        ----------  ----------  ----------
   As reported                          $   40,045  $   20,750        93.0%
     After-tax Adjustments:
       Non-Cash asset impairment
        charges (2)                            225         950
       Loss on dealership dispositions (3)       -       3,698
       Loss on debt redemption (4)               -       2,458
       Severance costs related to
        UK-dealership acquisitions (5)           -         405
                                        ----------  ----------
         Adjusted net income (1)        $   40,270  $   28,261        42.5%

DILUTED INCOME PER SHARE RECONCILIATION:
   As reported                          $     1.72  $     0.88        95.5%
     After-tax Adjustments:
       Non-Cash asset impairment
        charges                               0.01        0.04
       Loss on dealership dispositions           -        0.15
       Loss on debt redemption                   -        0.10
       Severance costs related to
        UK-dealership acquisitions               -        0.02
                                        ----------  ----------
         Adjusted diluted income per
          share (1)                     $     1.73  $     1.19        45.4%

SG&A RECONCILIATION:
   As reported                          $  358,935  $  348,871         2.9%
     Pre-tax Adjustments:
       Loss on dealership dispositions           -      (5,053)
       Severance costs related to
        UK-dealership acquisitions               -        (562)
                                        ----------  ----------
         Adjusted SG&A (1)              $  358,935  $  343,256         4.6%

SG&A AS % REVENUES:
   Unadjusted                                 12.4%       13.4%
   Adjusted (1)                               12.4%       13.2%

SG&A AS % OF GROSS PROFIT:
   Unadjusted                                 77.0%       80.9%
   Adjusted (1)                               77.0%       79.6%

OPERATING MARGIN:
   Unadjusted                                  3.2%        2.6%
   Adjusted (1), (6)                           3.3%        2.9%

PRETAX MARGIN:
   Unadjusted                                  2.2%        1.3%
   Adjusted (1), (7)                           2.2%        1.7%



                                             Six Months Ended June 30,
                                        ----------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES       2011        2010      % Change
                                        ----------  ----------  ----------
RECONCILIATION:
   Net cash provided by (used in)
    operating activities                $  200,374  $  (56,051)      457.5%
       Change in floorplan notes
        payable-credit facility,
        excluding floorplan offset
        account and net acquisition and
        disposition related activity       (73,286)    107,215
       Change in floorplan notes
        payable-manufacturer affiliates
        associated with net acquisition
        and disposition related activity   (26,578)     (2,210)
                                        ----------  ----------
         Adjusted net cash provided by
          operating activities (1)      $  100,510  $   48,954       105.3%

(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 $57 and $139 for the three and
    six months ended June 30, 2011, respectively, and $532 for the three
    and six months ended June 30, 2010 and are calculated utilizing the
    applicable federal and state tax rates for the adjustment.
(3) Adjustment is net of tax benefit of $1,355 for the three and six months
    ended June 30, 2010 and is calculated utilizing the applicable federal
    and state tax rates for the adjustment.
(4) Adjustment is net of tax benefit of $1,414 for the six months ended
    June 30, 2010 and is calculated utilizing the applicable federal and
    state tax rates for the adjustment.
(5) Adjustment is net of a tax benefit of $157 for the three and six months
    ended June 30, 2010 and is calculated utilizing the applicable UK
    corporate tax rate for the adjustment.
(6) Excludes the impact of non-cash asset impairment charges.
(7) Excludes the impact of non-cash asset impairment charges and loss on
    debt redemption.

Contact Information

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

    Media contacts:
    Pete DeLongchamps
    V.P. 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