AutoNation Reports 4Q Net Income of $79.4 Million, Record Full-Year EPS of $1.19
* 4Q Net Income of $79.4 Million, or $0.26 per Share, Exceeds Year-Ago
Net Income of $6.9 Million, or $0.02 per Share
* Full-Year Net Income of $381.6 Million, or $1.19 per Share, Exceeds
Year-Ago Net Income of $232.3 Million, or $0.69 per Share
* 4Q EPS of $0.26 Exceeds Analysts' Consensus Estimate of $0.23
* Company Reconfirms 2003 EPS Outlook of $1.25 to $1.30
FORT LAUDERDALE, Fla., Feb. 6 -- AutoNation, Inc. , America's largest retailer of both new and used
vehicles, today reported 2002 fourth-quarter net income of $79.4 million, or
$0.26 per share, versus year-ago net income of $6.9 million, or $0.02 per
share. The fourth-quarter results capped off a year of record earnings per
share of $1.19 that surpassed earnings per share of $0.69 in 2001.
On a comparable basis, adjusting for goodwill amortization and one-time
items, the Company earned net income in the fourth quarter of $0.25 per share,
or $76.4 million, versus $0.27 per share, or $87.6 million, a year ago. The
Company's 2001 fourth quarter was impacted primarily by a charge stemming from
the Company's decision to stop underwriting consumer loans and the assumption
of certain obligations from its former vehicle rental business. For full-year
2002, comparable net income increased 6.6% to $373.9 million, or $1.16 per
share, versus $350.6 million, or $1.05 per share, in the prior year. The
increase came even though 2002's revenue of $19.5 billion was a decline from
$20 billion in 2001, which was the second-best year for U.S. sales of light
vehicles.
For the 2002 fourth quarter, revenue totaled $4.5 billion, which compares
to a record $5.1 billion reached in the year-ago period that featured the
debut of zero-percent financing offers that led to a record October for the
U.S. light vehicle market. The Company partially offset the fourth-quarter
revenue decline by expanding gross and store-performance margins as a
percentage of revenue, increasing per-vehicle gross margins, and decreasing
store-level selling, general and administrative expenses as a percentage of
gross margin.
Commenting on the 2002 fourth-quarter performance, Mike Jackson,
AutoNation's Chairman and Chief Executive Officer, said, "Even without the
benefit of an expanding U.S. light vehicle market, our vehicle sales, parts
and service, and finance and insurance areas delivered strong cash flow that
fueled our acquisitions, share repurchases and ongoing strategic initiatives.
This illustrates the resiliency of our diversified business model and speaks
to the growth opportunities we have in automotive retail."
The Company's other fourth-quarter highlights included:
* Earnings before interest, taxes, depreciation and amortization of
$157.7 million, up 89% from $83.4 million in the year-ago period.
* The repurchase of 16.9 million of the Company's shares at a cost of
$190.9 million, leaving a board-authorized amount of $370.4 million for
future repurchases as of December 31, 2002.
* Agreements to acquire Vista Toyota of Corpus Christi, an acquisition
that closed Monday, February 3; and Jim McNatt Honda of Dallas, a deal
which is expected to close during the first quarter of 2003.
FULL-YEAR
Commenting on the Company's 2002 performance, Jackson said, "Following a
106% improvement in 2001, AutoNation's share price rose a category-leading 2%
in 2002, a performance that surpassed the Standard & Poor's 500 Index by 25
percentage points. We believe AutoNation's market value will increase further
as we continue to generate strong cash flow, integrate acquisitions
successfully and deliver EPS growth."
Jackson said the Company's 2002 accomplishments included:
* Four quarters of reported earnings per share that set Company records
and exceeded the consensus estimates of analysts.
* A 6.6% improvement in comparable net income despite a 2.6% decline in
total revenue.
* Record earnings before interest, taxes, depreciation and amortization of
$727.7 million.
* Closed acquisitions representing an annual revenue run rate of
approximately $500 million.
* The repurchase of approximately 10% of the Company's outstanding common
shares (30.7 million shares) at a cost of $389.9 million.
Looking ahead, Jackson said, "We continue to foresee industry sales of new
vehicles that will exceed 16 million units in 2003. We also reaffirm our
previous full-year 2003 guidance of $1.25 to $1.30 per share and expect 2003
first-quarter earnings per share of $0.28 to $0.30."
AutoNation will discuss its 2002 fourth-quarter and full-year results, its
2003 outlook and supporting assumptions later this morning during an 11 a.m.,
Eastern Time, conference call. To listen live to the conference call, dial
877-209-9923 or listen via the audio webcast offered at
http://corp.AutoNation.com by clicking on the webcast link. A replay of the
conference call will be available after 4:30 p.m., Eastern Time, through
February 14, 2003. Replays can be accessed by calling 800-475-6701 (access
code 669580) or by visiting the "Investors" section of
http://corp.AutoNation.com.
ABOUT AUTONATION, INC.
AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's
largest retailer of both new and used vehicles. Ranked #101 on the 2002
Fortune 500 survey of America's largest corporations, AutoNation employs
approximately 30,000 people and owns and operates more than 370 automotive
retail franchises in 17 states. For additional information, please visit the
"About AutoNation, Inc." section of http://www.AutoNation.com, where consumers can
find more than 92,000 vehicles available for sale, or visit
http://corp.AutoNation.com.
FORWARD-LOOKING STATEMENTS
Certain statements and information included in this release constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied in such forward-looking statements. Additional discussion
of factors that could cause actual results to differ materially from
management's projections, estimates and expectations is contained in the
Company's SEC filings. The Company undertakes no duty to update its forward-
looking statements, including its earnings outlook.
AUTONATION, INC.
UNAUDITED CONSOLIDATED INCOME STATEMENTS
(In millions, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
Revenue:
New vehicle $2,726.9 $3,196.0 $11,694.8 $12,000.0
Used vehicle 860.7 955.1 3,786.6 3,883.2
Parts and service 592.3 590.7 2,453.3 2,404.9
Finance and insurance 116.8 125.7 510.2 489.6
Other 221.8 278.4 1,033.6 1,211.6
Total revenue 4,518.5 5,145.9 19,478.5 19,989.3
Cost of operations:
New vehicle 2,531.3 2,967.0 10,859.7 11,162.1
Used vehicle 773.3 854.8 3,383.6 3,456.7
Parts and service 334.7 335.4 1,385.0 1,365.7
Other 203.9 262.2 938.5 1,130.9
Total cost of operations 3,843.2 4,419.4 16,566.8 17,115.4
Gross margin 675.3 726.5 2,911.7 2,873.9
Selling, general and
administrative expenses 528.5 557.8 2,200.9 2,207.2
Depreciation 16.7 20.7 67.3 70.7
Amortization 0.5 20.4 2.4 81.2
Loan and lease underwriting
losses (income), net (5.0) 82.7 (13.9) 89.6
Other losses (gains) (1.1) 0.5 3.4 (14.8)
Operating income 135.7 44.4 651.6 440.0
Other interest expense (13.7) (13.1) (50.4) (43.7)
Interest income 1.8 2.9 10.4 9.0
Other income (expense) 4.8 (2.1) 6.4 (4.5)
Income before income taxes 128.6 32.1 618.0 400.8
Provision for income taxes 49.2 12.5 236.4 155.8
Net income from continuing
operations 79.4 19.6 381.6 245.0
Loss from discontinued
operations, net of income
taxes -- (12.7) -- (12.7)
Net income $79.4 $6.9 $381.6 $232.3
Diluted earnings per share:
Continuing operations $0.26 $0.06 $1.19 $0.73
Discontinued operations -- (0.04) -- (0.04)
Net income $0.26 $0.02 $1.19 $0.69
Weighted average common and
common equivalent shares
outstanding 309.4 326.1 321.5 335.2
Common shares outstanding 298.0 321.7 298.0 321.7
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except gross margin per vehicle data)
Operating Highlights Three Months Ended December 31,
$ %
2002 2001 Variance Variance
Revenue:
New vehicle $2,726.9 $3,196.0 $(469.1) (14.7)
Used vehicle 860.7 955.1 (94.4) (9.9)
Parts and service 592.3 590.7 1.6 0.3
Finance and insurance 116.8 125.7 (8.9) (7.1)
Other 221.8 278.4 (56.6) (20.3)
$4,518.5 $5,145.9 $(627.4) (12.2)
Gross margin:
New vehicle $195.6 $229.0 $(33.4) (14.6)
Used vehicle 87.4 100.3 (12.9) (12.9)
Parts and service 257.6 255.3 2.3 0.9
Finance and insurance 116.8 125.7 (8.9) (7.1)
Other 17.9 16.2 1.7 10.5
675.3 726.5 (51.2) (7.0)
S,G&A -- Store 490.0 528.5 38.5 7.3
Store performance 185.3 198.0 (12.7) (6.4)
S,G&A -- Corporate 38.5 29.3 (9.2) (31.4)
Depreciation 16.7 20.7 4.0
Amortization 0.5 20.4 19.9
Loan and lease underwriting losses
(income), net (5.0) 82.7 87.7
Other losses (gains) (1.1) 0.5 1.6
Operating income $135.7 $44.4 $91.3 205.6
Retail vehicle sales:
New 95,228 117,958 (22,730) (19.3)
Used 55,375 64,019 (8,644) (13.5)
150,603 181,977 (31,374) (17.2)
Gross margin per vehicle retailed:
New $2,054 $1,941 $113 5.8
Used $1,578 $1,567 $11 0.7
Finance and insurance $776 $691 $85 12.3
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except gross margin per vehicle data)
Operating Highlights Year Ended December 31,
$ %
2002 2001 Variance Variance
Revenue:
New vehicle $11,694.8 $12,000.0 $(305.2) (2.5)
Used vehicle 3,786.6 3,883.2 (96.6) (2.5)
Parts and service 2,453.3 2,404.9 48.4 2.0
Finance and insurance 510.2 489.6 20.6 4.2
Other 1,033.6 1,211.6 (178.0) (14.7)
$19,478.5 $19,989.3 $(510.8) (2.6)
Gross margin:
New vehicle $835.1 $837.9 $(2.8) (0.3)
Used vehicle 403.0 426.5 (23.5) (5.5)
Parts and service 1,068.3 1,039.2 29.1 2.8
Finance and insurance 510.2 489.6 20.6 4.2
Other 95.1 80.7 14.4 17.8
2,911.7 2,873.9 37.8 1.3
S,G&A -- Store 2,059.8 2,072.0 12.2 0.6
Store performance 851.9 801.9 50.0 6.2
S,G&A -- Corporate 141.1 135.2 (5.9) (4.4)
Depreciation 67.3 70.7 3.4
Amortization 2.4 81.2 78.8
Loan and lease underwriting losses
(income), net (13.9) 89.6 103.5
Other losses (gains) 3.4 (14.8) (18.2)
Operating income $651.6 $440.0 $211.6 48.1
Retail vehicle sales:
New 426,706 453,857 (27,151) (6.0)
Used 247,365 258,523 (11,158) (4.3)
674,071 712,380 (38,309) (5.4)
Gross margin per vehicle retailed:
New $1,957 $1,846 $111 6.0
Used $1,629 $1,650 $(21) (1.3)
Finance and insurance $757 $687 $70 10.2
Operating Percentages Three Months Ended Year Ended
December 31, December 31,
% 2002 % 2001 % 2002 % 2001
Revenue mix percentages:
New vehicle 60.3 62.1 60.0 60.0
Used vehicle 19.0 18.6 19.4 19.4
Parts and service 13.1 11.5 12.6 12.0
Finance and insurance 2.6 2.4 2.6 2.4
Other 5.0 5.4 5.4 6.2
100.0 100.0 100.0 100.0
Operating items as a percentage of
revenue:
Gross margin:
New vehicle 7.2 7.2 7.1 7.0
Used vehicle 10.2 10.5 10.6 11.0
Parts and service 43.5 43.2 43.5 43.2
Finance and insurance 100.0 100.0 100.0 100.0
Other 8.1 5.8 9.2 6.7
Total 14.9 14.1 14.9 14.4
S,G&A -- Store 10.8 10.3 10.6 10.4
Store performance 4.1 3.8 4.4 4.0
S,G&A -- Corporate 0.9 0.6 0.7 0.7
Operating income 3.0 0.9 3.3 2.2
Net income 1.8 0.1 2.0 1.2
Other operating items as a
percentage of total gross margin:
S,G&A -- Store 72.6 72.7 70.7 72.1
Store performance 27.4 27.3 29.3 27.9
S,G&A -- Corporate 5.7 4.0 4.8 4.7
Total S,G&A 78.3 76.8 75.6 76.8
Operating income 20.1 6.1 22.4 15.3
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions)
Three Months Ended Year Ended
Cash Flow Information December 31, December 31,
2002 2001 2002 2001
Net income from continuing
operations $79.4 $19.6 $381.6 $245.0
Plus: Depreciation 16.7 20.7 67.3 70.7
Amortization 0.5 20.4 2.4 81.2
Other interest expense 13.7 13.1 50.4 43.7
Provision for income
taxes 49.2 12.5 236.4 155.8
Less: Interest income (1.8) (2.9) (10.4) (9.0)
EBITDA $157.7 $83.4 $727.7 $587.4
Capital expenditures, excluding
property operating
lease buy-outs $63.5 $70.2 $163.4 $156.5
Property operating lease buy-outs $8.8 $7.1 $19.8 $7.1
Stock repurchases $190.9 $69.6 $389.9 $256.8
Acquisitions $2.3 $8.8 $166.5 $92.0
Proceeds from exercises of stock
options $3.1 $6.6 $78.7 $9.1
Floorplan Assistance
and Expense Three Months Ended December 31,
2002 % 2001 %
New vehicle gross margin, before
floorplan $183.3 6.7 $215.4 6.7
Floorplan assistance 31.8 1.2 33.2 1.0
Floorplan interest expense (19.5) (0.7) (19.6) (0.6)
New vehicle gross margin,
as presented $195.6 7.2 $229.0 7.2
Floorplan Assistance
and Expense Year Ended December 31,
2002 % 2001 %
New vehicle gross margin, before
floorplan $782.0 6.7 $823.8 6.9
Floorplan assistance 127.9 1.1 140.8 1.2
Floorplan interest expense (74.8) (0.6) (126.7) (1.1)
New vehicle gross margin,
as presented $835.1 7.1 $837.9 7.0
Balance Sheet and Other
Highlights
December 31, 2002 December 31, 2001
Cash and cash equivalents $176.2 $128.1
Inventory $2,598.4 $2,178.5
Floorplan notes payable $2,302.5 $1,900.7
Non-vehicle debt $651.3 $655.2
Equity $3,910.2 $3,827.9
Days supply (trailing 30 days):
New 79 days 61 days
Used 40 days 35 days
Net Income
Comparable Basis Three Months Ended Year Ended
Reconciliation December 31, December 31,
2002 2001 2002 2001
As reported $79.4 $6.9 $381.6 $232.3
Certain charges and gains:
Discontinued operations -- 12.7 -- 12.7
Goodwill amortization -- 15.4 -- 59.8
Asset impairment and related
charges -- loan underwriting
business -- 52.3 -- 52.3
Gain on sale of outdoor media
business -- -- -- --
Loan and lease underwriting
activity (3.1) -- (8.6) --
Gain on sale of Flemington
dealership group -- -- -- (11.8)
Other items, net 0.1 0.3 0.9 5.3
Excluding certain charges
and gains $76.4 $87.6 $373.9 $350.6
Diluted Earnings Per Share
Comparable Basis Three Months Ended Year Ended
Reconciliation December 31, December 31,
2002 2001 2002 2001
As reported $0.26 $0.02 $1.19 $0.69
Certain charges and gains:
Discontinued operations -- 0.04 -- 0.04
Goodwill amortization -- 0.05 -- 0.18
Asset impairment and related
charges -- loan underwriting
business 0.16 -- 0.16
Gain on sale of outdoor media
business -- -- -- --
Loan and lease underwriting
activity (0.01) -- (0.03) --
Gain on sale of Flemington
dealership group -- -- -- (0.04)
Other items, net -- -- -- 0.02
Excluding certain charges
and gains $0.25 $0.27 $1.16 $1.05
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except gross margin per vehicle data)
Operating Highlights Three Months Ended December 31,
$ %
2002 2001 Variance Variance
Revenue:
New vehicle $2,646.6 $3,177.6 $(531.0) (16.7)
Used vehicle 833.2 949.9 (116.7) (12.3)
Parts and service 571.8 584.1 (12.3) (2.1)
Finance and insurance 113.7 124.9 (11.2) (9.0)
Other 205.8 271.7 (65.9) (24.3)
$4,371.1 $5,108.2 $(737.1) (14.4)
Gross margin:
New vehicle $189.0 $227.9 $(38.9) (17.1)
Used vehicle 85.4 99.7 (14.3) (14.3)
Parts and service 247.9 252.7 (4.8) (1.9)
Finance and insurance 113.7 124.9 (11.2) (9.0)
Other 14.4 13.8 0.6 4.3
650.4 719.0 (68.6) (9.5)
S,G&A -- Store 471.9 520.0 48.1 9.3
Store performance $178.5 $199.0 $(20.5) (10.3)
Retail vehicle sales:
New 93,265 117,267 (24,002) (20.5)
Used 54,207 63,655 (9,448) (14.8)
147,472 180,922 (33,450) (18.5)
Gross margin per vehicle retailed:
New $2,026 $1,944 $82 4.2
Used $1,575 $1,566 $9 0.6
Finance and insurance $771 $690 $81 11.7
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except gross margin per vehicle data)
Operating Highlights Year Ended December 31,
$ %
2002 2001 Variance Variance
Revenue:
New vehicle $11,327.2 $11,873.7 $(546.5) (4.6)
Used vehicle 3,652.1 3,837.3 (185.2) (4.8)
Parts and service 2,364.9 2,363.4 1.5 0.1
Finance and insurance 496.7 485.0 11.7 2.4
Other 955.5 1,172.4 (216.9) (18.5)
$18,796.4 $19,731.8 $(935.4) (4.7)
Gross margin:
New vehicle $804.7 $830.5 $(25.8) (3.1)
Used vehicle 391.5 422.4 (30.9) (7.3)
Parts and service 1,027.2 1,021.0 6.2 0.6
Finance and insurance 496.7 485.0 11.7 2.4
Other 75.0 70.0 5.0 7.1
2,795.1 2,828.9 (33.8) (1.2)
S,G&A -- Store 1,983.2 2,025.9 42.7 2.1
Store performance $811.9 $803.0 $8.9 1.1
Retail vehicle sales:
New 416,917 448,984 (32,067) (7.1)
Used 241,453 255,329 (13,876) (5.4)
658,370 704,313 (45,943) (6.5)
Gross margin per vehicle
retailed:
New $1,930 $1,850 $80 4.3
Used $1,621 $1,654 $(33) (2.0)
Finance and insurance $754 $689 $65 9.4
Operating Percentages Three Months Ended Year Ended
December 31, December 31,
% 2002 % 2001 % 2002 % 2001
Revenue mix percentages:
New vehicle 60.5 62.2 60.3 60.2
Used vehicle 19.1 18.6 19.4 19.4
Parts and service 13.1 11.4 12.6 12.0
Finance and insurance 2.6 2.4 2.6 2.5
Other 4.7 5.4 5.1 5.9
100.0 100.0 100.0 100.0
Operating items as a percentage of
revenue:
Gross margin:
New vehicle 7.1 7.2 7.1 7.0
Used vehicle 10.2 10.5 10.7 11.0
Parts and service 43.4 43.3 43.4 43.2
Finance and insurance 100.0 100.0 100.0 100.0
Other 7.0 5.1 7.8 6.0
Total 14.9 14.1 14.9 14.3
S,G&A -- Store 10.8 10.2 10.6 10.3
Store performance 4.1 3.9 4.3 4.1
Other operating items as a
percentage of total gross margin:
S,G&A -- Store 72.6 72.3 71.0 71.6
Store performance 27.4 27.7 29.0 28.4