Group 1 Posts Record Revenues, 18% EPS
Increase For First Quarter
Guidance Raised for 2001 Second Quarter
HOUSTON, April 26 Group 1 Automotive, Inc. , a
Fortune 500 company in the automotive retailing industry, today reported
record revenues and earnings for the first quarter of 2001. Revenue growth in
all business segments and expansion of margins drove the record-setting first-
quarter performance.
Highlights:
- Diluted EPS $0.47, an 18% increase
- Cash flow per share $0.68, a 21% increase
- Operating income up 11% on 8% revenue growth
- Gross and operating margins expand
Summary Results of Operations (Unaudited)
(In millions, except per share amounts)
Three Months Ended
March 31,
2001 2000
Revenues $928.9 $859.9
Gross Profit $141.9 $125.4
Income from Operations $28.5 $25.8
Net Income $9.3 $9.0
Diluted Earnings per Share $0.47 $0.40
Growth in Higher-Margin Revenues Accelerates
Revenues grew 8 percent to $928.9 million from $859.9 million for the same
period last year. Same store revenues grew 3.4 percent. New vehicle revenues
increased 5 percent on flat unit sales, while used vehicle revenues rose
10 percent and unit sales were up 13 percent. Parts and service and other
dealership revenues increased significantly, growing 16 percent and
23 percent, respectively.
Gross margin for the quarter was 15.3 percent compared with 14.6 percent
during the year-ago period. This was due to higher gross margin on used
vehicles and a favorable shift in the merchandise mix, as new vehicles, which
carry the lowest margin, accounted for a lower percentage of revenue. Income
from operations rose to $28.5 million from $25.8 million, an 11 percent
increase. Operating margin increased to 3.1 percent from 3.0 percent in the
year-ago period.
Net income increased 3 percent to $9.3 million from $9.0 million, while
diluted earnings per share grew 18 percent to $0.47 from $0.40 a year ago.
Diluted cash flow per share, defined as net income plus depreciation and
amortization, increased 21 percent to $0.68 from $0.56 in the 2000 period.
Per share amounts were positively impacted by the company's continued
repurchase of its common stock.
Record Performance
"I am pleased to announce a record first-quarter performance at a time
when North American new vehicle sales slowed from the record pace of 2000 and
some manufacturers and suppliers saw their performances deteriorate," said
B.B. Hollingsworth Jr., Group 1's chairman, president and chief executive
officer. "The last two quarters have given us the opportunity to validate our
business model by demonstrating our ability to generate satisfactory returns
in a less robust new vehicle market. During a challenging period for many
companies, we responded by producing earnings per share growth that exceeded
expectations. We have now delivered 14 periods of double-digit quarterly
earnings per share growth on a year-over-year basis since going public.
"Our results are especially gratifying because we stimulated sales in
order to bring new vehicle inventories back in line. However, our overall
operating margin improved because of expense controls and a strong showing by
other business segments. Used vehicle, parts and service and other dealership
revenues were outstanding. Because of our focus on these higher-margin areas,
we expect them to continue to expand. We ended the quarter with inventories
at the right level and feel very comfortable going into the summer selling
season," Hollingsworth added.
2001 Outlook
Hollingsworth stated that Group 1 now expects second-quarter and full-year
2001 to show growth in earnings per share on slightly higher revenues. "We
see operating margin remaining consistent to slightly improved compared with
last year," he said.
Group 1 said it will seek strategic tuck-in acquisitions in markets
currently served, targeting to add dealerships with aggregate revenues of
between $200 million and $300 million, and may, subject to market conditions,
use up to $7 million of operating cash flow to continue to repurchase its
common stock in both private and market transactions.
First-Quarter Conference Call
Group 1 will hold a conference call to discuss first-quarter results and
management's outlook for 2001 at 10:00 a.m. EDT on Thursday, April 26, 2001.
The call can be accessed live and will be available for replay over the
Internet via http://www.vcall.com, or http://www.ccbn.com . Links will also be available on
Group 1's website, http://www.group1auto.com .
Group 1, a Fortune 500 company, is a leading operator in the automotive
retailing industry. The company has revenues of over $3.6 billion, and owns
59 dealerships comprised of 101 franchises, 30 different brands, and 22
collision service centers located in Texas, Oklahoma, Florida, New Mexico,
Colorado, Georgia, Louisiana and Massachusetts. Through its dealerships and
Internet sites, the company sells new and used cars and light trucks, provides
maintenance and repair services, sells replacement parts and arranges related
financing, vehicle service and insurance contracts.
This press release contains "forward-looking statements" within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934.
These statements include statements regarding our plans, goals, beliefs or
current expectations, including those plans, goals, beliefs and expectations
of our officers and directors with respect to, among other things:
- revenues for 2001
- operating margins in 2001
- earnings per share for the second quarter and the year ending 2001
- the completion of pending and future acquisitions
- future stock repurchases
Any such forward-looking statements are not assurances of future
performance and involve risks and uncertainties. Actual results may differ
materially from anticipated results in the forward-looking statements for a
number of reasons, including:
- the future economic environment, including consumer confidence, may
affect the demand for new and used vehicles and parts and service sales
- regulatory environment, adverse legislation, or unexpected litigation
our principal automobile manufacturers, especially Ford and Toyota, may
not continue to enjoy high customer satisfaction with their products
and they may not continue to support and make high-demand vehicles
available to us
- requirements imposed on us by automobile manufacturers may affect our
acquisitions and capital expenditures related to our dealership
facilities
- our dealership operations may not perform at expected levels or achieve
expected improvements
- we may not achieve expected future cost savings and our future costs
could be higher than we expected
- available capital resources and various debt agreements may limit our
ability to repurchase shares. Any repurchases of our stock may be
made, from time to time, in accordance with applicable securities laws,
in the open market or in privately negotiated transactions at such time
and in such amounts, as we consider appropriate
This information and additional factors that could affect our operating
results and performance are described in Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Cautionary
Statement About Forward-Looking Statements; -- Impact of Acquisitions on
Growth; -- Dependence on the Success of Our Manufacturers; -- Cyclicality and
-- Seasonality in our Form 10-K for the year ended December 31, 2000.
All forward-looking statements attributable to us are qualified in their
entirety by this cautionary statement.
For additional information regarding Group 1 Automotive free of charge via
fax, dial 1-800-PRO-INFO and use the company's stock symbol, "GPI."
Group 1 Automotive, Inc. can be reached on the Internet at
http://www.group1auto.com .
Group 1 Automotive, Inc.
Statements of Operations
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended
March 31,
2001 2000
REVENUES:
New vehicles $537,442 $511,417
Used vehicles 274,658 249,697
Parts & service 84,771 72,844
Other dealership revenues, net 31,993 25,953
Total revenues 928,864 859,911
COST OF SALES:
New vehicles 498,072 471,807
Used vehicles 250,835 229,625
Parts & service 38,029 33,129
Total cost of sales 786,936 734,561
Gross profit 141,928 125,350
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 109,195 95,820
Income from operations before non-cash charges 32,733 29,530
DEPRECIATION EXPENSE 1,961 1,750
AMORTIZATION EXPENSE 2,270 2,011
INCOME FROM OPERATIONS 28,502 25,769
OTHER INCOME (EXPENSE):
Floorplan interest expense (9,307) (8,373)
Other interest expense, net (4,200) (3,883)
Other income, net 38 1,024
Income before income taxes 15,033 14,537
PROVISION FOR INCOME TAXES 5,712 5,524
NET INCOME $9,321 $9,013
Basic earnings per share $0.47 $0.40
Diluted earnings per share $0.47 $0.40
Diluted cash flow per share $0.68 $0.56
Weighted average shares outstanding:
Basic 19,691,449 22,384,332
Diluted 20,006,717 22,781,689
OTHER DATA:
Gross margin 15.3% 14.6%
Operating margin 3.1% 3.0%
Pretax income margin 1.6% 1.7%
EBITDA $32,771 $30,554
Retail new vehicles sold 20,726 20,779
Retail used vehicles sold 16,500 14,651
Total retail sales 37,226 35,430
Group 1 Automotive, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
March 31, December 31,
2001 2000
(unaudited) (audited)
ASSETS:
Current assets:
Cash and cash equivalents $144,893 $140,878
Inventories, net 511,060 527,101
Other assets, net 49,921 52,560
Total current assets 705,874 720,539
Property, plant and equipment, net 71,307 70,901
Goodwill, net 281,245 285,892
Other assets 22,471 22,221
Total assets $1,080,897 $1,099,553
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Floorplan notes payable $498,192 $536,707
Other interest-bearing liabilities 1,266 1,506
Accounts payable and accrued expenses 122,543 127,557
Total current liabilities 622,001 665,770
Debt 160,036 140,393
Other liabilities 46,416 45,974
Total stockholders' equity 252,444 247,416
Total liabilities and stockholders'
equity $1,080,897 $1,099,553
OTHER DATA:
Working capital $83,873 $54,769
Current ratio 1.13 1.08
Long-term debt to capitalization 39% 36%
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