AutoNation Reports Record First-Quarter Net Income
* Total store revenue growth of 8% * Record first-quarter operating income of $181 million, up 6% * Company raises full-year EPS outlook by $0.03 to the range of $1.43 - $1.48
FORT LAUDERDALE, Fla., April 29 -- AutoNation, Inc. , America's largest automotive retailer, today reported first- quarter net income of $87.3 million, or $0.32 per share, on revenue of $4.8 billion for the period ending March 31, 2004. The results compare with 2003 first-quarter net income from continuing operations of $84.4 million, or $0.29 per share, excluding the benefit of the year-ago IRS tax settlement, on revenue of $4.5 billion. Including this non-cash settlement benefit of $127.5 million, first-quarter 2003 net income from continuing operations was $211.9 million or $0.72 per share.
The first-quarter $0.32 EPS exceeded the analysts' consensus estimate of $0.30 per share. Across-the-board growth in both revenue and gross profit coupled with continued share repurchase and leverage of the company's cost structure drove performance in the quarter. Commenting on the quarter, Mike Jackson, chairman and chief executive officer of AutoNation, stated, "AutoNation delivered strong same store sales results in the first quarter in every area of the business, including new and used vehicles, finance and insurance and parts and service. We also continued to make strides on the cost side of the equation. It was a great quarter and we're very pleased with our results."
First quarter highlights include:
* Same store revenue growth of 8% for new vehicles, 6% for retail used vehicles, 6% for parts and service and 11% for finance and insurance.
* An 80 basis point improvement in selling, general and administrative expense as a percent of total gross profit to 73.1%.
* Completion of the acquisition of Leesburg Honda and Leesburg Toyota in Virginia. The two new vehicle franchises represent collective annual revenue of approximately $77 million.
* Completion of the acquisition of Glauser Mercedes-Benz in Sarasota, Florida, an authorized Mercedes-Benz and Maybach dealer with annual revenue of approximately $150 million.
* The signing of an agreement to acquire John Roberts BMW and MINI of Dallas/Fort Worth, Texas, which is expected to be completed in the second quarter.
* The repurchase of 3.5 million shares, or 1.3% of the Company's outstanding common stock, at a cost of $58.1 million.
Looking ahead, Jackson said, "We are encouraged by our ability to generate top line growth, our continued cost reductions and the disciplined redeployment of our significant cash flow to improve shareholder value. Given this, we are raising our full-year 2004 EPS guidance by $0.03 to the range of $1.43 to $1.48 and anticipate second-quarter earnings per share in the range of $0.38 to $0.40."
AutoNation will discuss these results, the Company's outlook and supporting assumptions during a conference call and audio webcast this morning at 9:00 a.m. Eastern Time. To listen to the live conference call, dial (888) 428-4474 or listen to the audio webcast via the Internet at www.AutoNation.com by clicking on the "About Us" link, then clicking on "Investors" and then "Webcasts." A playback of the conference call will be available after 12:30 p.m. Eastern Time, through May 6, 2004 by calling (800) 475-6701 (access code #728416) or via the Internet as outlined above.
About AutoNation, Inc.
AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's largest automotive retailer. Ranked No. 97 on the 2004 Fortune 500 and a component of the Standard and Poor's 500 Index, AutoNation employs approximately 28,000 people and owns and operates 365 new vehicle franchises in 18 states. For additional information, please visit http://corp.autonation.com/ or www.AutoNation.com, where more than 100,000 vehicles are available for sale.
AUTONATION, INC.
UNAUDITED CONSOLIDATED INCOME STATEMENTS
($ in millions, except per share data)
Three Months Ended March 31,
2004 2003
Revenue:
New vehicle $2,832.5 $2,609.5
Used vehicle 1,153.2 1,102.6
Parts and service 636.0 599.4
Finance and insurance 151.3 136.4
Other 24.0 11.4
Total revenue 4,797.0 4,459.3
Cost of sales:
New vehicle 2,631.4 2,412.5
Used vehicle 1,045.6 998.3
Parts and service 357.9 338.7
Other 10.0 1.7
Total cost of sales 4,044.9 3,751.2
Gross profit 752.1 708.1
Selling, general and
administrative expenses 550.1 523.0
Depreciation 18.9 16.9
Amortization 0.3 0.6
Loan and lease underwriting
income, net -- (2.9)
Other losses, net 1.8 0.3
Operating income 181.0 170.2
Floorplan interest expense (17.6) (19.5)
Other interest expense (19.3) (15.6)
Interest income 0.7 1.1
Other (expense) income, net (0.5) 1.1
Income from continuing
operations before income taxes 144.3 137.3
Provision for income taxes 57.0 52.9
Income tax benefit from IRS
settlement -- (127.5)
Net tax provision - continuing
operations 57.0 (74.6)
Net income from continuing
operations 87.3 211.9
Loss from discontinued
operations, net of income
taxes -- (12.3)
Net income before cumulative
effect of accounting change 87.3 199.6
Cumulative effect of accounting
change, net of income taxes -- (14.6)
Net income $87.3 $185.0
Diluted earnings per share:
Continuing operations $0.32 $0.72
Discontinued operations -- (0.04)
Cumulative effect of
accounting change -- (0.05)
Net income $0.32 $0.63
Weighted average common and
common equivalent shares
outstanding 275.7 294.2
Common shares outstanding 267.3 282.5
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended March 31,
$ %
2004 2003 Variance Variance
Revenue:
New vehicle $2,832.5 $2,609.5 $223.0 8.5
Retail used vehicle 961.0 906.7 54.3 6.0
Wholesale 192.2 195.9 (3.7) (1.9)
Total used vehicle 1,153.2 1,102.6 50.6 4.6
Parts and service 636.0 599.4 36.6 6.1
Finance and insurance 151.3 136.4 14.9 10.9
Other 24.0 11.4 12.6
$4,797.0 $4,459.3 $337.7 7.6
Gross profit:
New vehicle $201.1 $197.0 $4.1 2.1
Retail used vehicle 107.0 103.6 3.4 3.3
Wholesale 0.6 0.7 (0.1) (14.3)
Used vehicle 107.6 104.3 3.3 3.2
Parts and service 278.1 260.7 17.4 6.7
Finance and insurance 151.3 136.4 14.9 10.9
Other 14.0 9.7 4.3
752.1 708.1 44.0 6.2
Selling, general and
administrative expenses 550.1 523.0 (27.1) (5.2)
Depreciation 18.9 16.9 (2.0)
Amortization 0.3 0.6 0.3
Loan and lease underwriting
income, net -- (2.9) (2.9)
Other losses, net 1.8 0.3 (1.5)
Operating income 181.0 170.2 10.8 6.3
Floorplan interest expense (17.6) (19.5) 1.9 9.7
Other interest expense (19.3) (15.6) (3.7) (23.7)
Interest income 0.7 1.1 (0.4) (36.4)
Other (expense) income, net (0.5) 1.1 (1.6)
Income from continuing
operations before income
taxes $144.3 $137.3 $7.0 5.1
Retail vehicle unit sales:
New vehicle 97,945 93,782 4,163 4.4
Used vehicle 63,446 59,716 3,730 6.2
161,391 153,498 7,893 5.1
Revenue per vehicle retailed:
New vehicle $28,919 $27,825 $1,094 3.9
Used vehicle $15,147 $15,184 $(37) (0.2)
Gross profit per vehicle
retailed:
New vehicle $2,053 $2,101 $(48) (2.3)
Used vehicle $1,686 $1,735 $(49) (2.8)
Finance and insurance $937 $889 $48 5.4
Operating Percentages Three Months Ended March 31,
% 2004 % 2003
Revenue mix percentages:
New vehicle 59.0 58.5
Used vehicle 24.0 24.7
Parts and service 13.3 13.4
Finance and insurance 3.2 3.1
Other 0.5 0.3
100.0 100.0
Operating items as a percentage
of revenue:
Gross profit:
New vehicle 7.1 7.5
Used vehicle - retail 11.1 11.4
Parts and service 43.7 43.5
Total 15.7 15.9
Selling, general and
administrative expenses 11.5 11.7
Operating income 3.8 3.8
Operating items as a percentage
of total gross profit:
Selling, general and
administrative expenses 73.1 73.9
Operating income 24.1 24.0
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Three Months Ended March 31,
Cash Flow Information
2004 2003
Capital expenditures,
excluding property
operating lease buy-
outs $21.6 $23.9
Property operating lease
buy-outs $77.7 $8.8
Stock repurchases $58.1 $204.6
Acquisitions $87.9 $45.1
Proceeds from exercises
of stock options $12.7 $12.9
Floorplan Assistance
and Expense Three Months Ended March 31,
2004 2003 Variance
Floorplan assistance
(included in cost of
operations) $27.3 $28.4 $(1.1)
Floorplan interest
expense (17.6) (19.5) 1.9
Net inventory carrying
benefit $9.7 $8.9 $0.8
Balance Sheet and Other
Highlights
March 31, December 31, March 31,
2004 2003 2003
Cash and cash
equivalents $31.1 $170.8 $185.7
Inventory $3,140.8 $2,919.3 $2,803.5
Floorplan notes payable $2,967.0 $2,809.8 $2,563.2
Non-vehicle debt $821.8 $824.4 $712.0
Equity $3,990.4 $3,949.7 $3,901.4
New days supply
(industry standard of
selling days,
including fleet) 68 days 71 days 72 days
Used days supply
(trailing 30 days) 36 days 41 days 33 days
Comparable Basis Diluted Earnings Per
Reconciliations Net Income Share
Three Months Ended Three Months Ended
March 31, March 31,
2004 2003 2004 2003
Net income, as reported $87.3 $185.0 $0.32 $0.63
Discontinued operations -- 12.3 -- 0.04
Cumulative effect of
accounting change -- 14.6 -- 0.05
Net income from
continuing operations,
as reported 87.3 211.9 0.32 0.72
Income tax benefit from
IRS settlement -- (127.5) -- (0.43)
Net income from
continuing operations,
excluding income tax
benefit from IRS
Settlement $87.3 $84.4 $0.32 $0.29
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended March 31,
$ %
2004 2003 Variance Variance
Revenue:
New vehicle $2,785.4 $2,586.2 $199.2 7.7
Retail used vehicle 949.1 895.9 53.2 5.9
Wholesale 182.9 191.0 (8.1) (4.2)
Total used vehicle 1,132.0 1,086.9 45.1 4.1
Parts and service 627.9 592.7 35.2 5.9
Finance and insurance 149.6 134.7 14.9 11.1
Other 5.5 7.2 (1.7)
$4,700.4 $4,407.7 $292.7 6.6
Gross profit:
New vehicle $197.6 $195.8 $1.8 0.9
Retail used vehicle 105.9 102.3 3.6 3.5
Wholesale 0.6 (0.5) 1.1
Used vehicle 106.5 101.8 4.7 4.6
Parts and service 274.1 257.9 16.2 6.3
Finance and insurance 149.6 134.7 14.9 11.1
Other 4.7 6.3 (1.6)
$732.5 $696.5 $36.0 5.2
Retail vehicle unit sales:
New Vehicle 96,561 92,882 3,679 4.0
Used Vehicle 62,773 58,855 3,918 6.7
159,334 151,737 7,597 5.0
Revenue per vehicle retailed:
New Vehicle $28,846 $27,844 $1,002 3.6
Used Vehicle $15,120 $15,222 $(102) (0.7)
Gross profit per vehicle
retailed:
New Vehicle $2,046 $2,108 $(62) (2.9)
Used Vehicle $1,687 $1,738 $(51) (2.9)
Finance and insurance $939 $888 $51 5.7
Operating Percentages Three Months Ended March 31,
% 2004 % 2003
Revenue mix percentages:
New vehicle 59.3 58.7
Used vehicle 24.1 24.7
Parts and service 13.4 13.4
Finance and insurance 3.2 3.1
Other 0.0 0.1
100.0 100.0
Operating items as a
percentage of revenue:
Gross Profit:
New vehicle 7.1 7.6
Used vehicle - retail 11.1 11.4
Parts and service 43.7 43.5
Total 15.6 15.8