Group 1 Automotive Announces Preliminary Third-Quarter Results and Revises 2004 Outlook
HOUSTON--Oct. 21, 2004--| Atlanta Platform Being Assessed for Impairment; Third-Quarter Earnings Call Scheduled |
Group 1 Automotive, Inc. , a Fortune 500 specialty retailer, today revised its outlook for 2004 and announced that it expects to report earnings per diluted share of $0.83 to $0.85 for the third quarter ended Sept. 30, 2004, compared with $0.92 per diluted share for the prior-year period.
Group 1's third-quarter results reflect the current difficult operating environment. A challenging market for new and used vehicle sales continues to place considerable pressure on gross margins. In addition, the company continues to struggle to achieve profitability in its Atlanta platform. The third-quarter results also include a charge of approximately $0.01 per diluted share related to a September hurricane that caused physical damage at two of the company's four Florida dealerships. Finally, store closures related to this and other recent storms impacted the company's performance. These items have all contributed to the company's less-than-expected performance for the quarter.
As a result of the continued underperformance of its Atlanta platform, the company announced that it has begun an assessment of the recoverability of goodwill associated with the platform. Upon completion of this assessment, the company may recognize an impairment charge in the third quarter related to its Atlanta platform.
B.B. Hollingsworth Jr., Group 1's chairman, president and chief executive officer, said, "We are disappointed with our third-quarter results, including the continued underperformance of our Atlanta platform. We have been confronted with a variety of performance issues in Atlanta over the past couple of years. Although we have been successful in dealing with some of these issues, and are diligently working to resolve others, we also recognize the need to test the platform for impairment."
2004 Outlook
The company expects full-year 2004 earnings per diluted share in the range of $2.70 to $2.80, down from the previous range of $2.95 to $3.15 provided by the company in July. This revised outlook includes approximately $0.09 per diluted share in weather-related losses. It excludes a $0.17 per diluted share charge from a March 2004 notes redemption, any charges that may be incurred as a result of the Atlanta goodwill assessment and any future acquisitions. It also reflects what the company anticipates to be a continuation of the current difficult operating environment for the balance of the year.
Third-Quarter Earnings Release and Conference Call
Group 1 will release its financial results for the third quarter ended Sept. 30, 2004, prior to the market open on Thursday, Oct. 2, 20048, 2004. Hollingsworth and Robert T. Ray, Group 1's senior vice president, chief financial officer and treasurer, will host a conference call to discuss the results later that morning at 10 a.m. EDT. Until then, the company's third-quarter results are subject to the completion of its customary quarter-end closing and review procedures.
The conference call will be simulcast live on the Internet and will be accessible by logging onto www.vcall.com or www.group1auto.com. A replay will be available at these sites for 30 days.
A telephonic replay will be available following the call through Nov. 3, 2004, by dialing: 888-203-1112 (domestic) or 719-457-0820 (international), with passcode: 940616.
About Group 1 Automotive, Inc.
Group 1 currently owns 95 automotive dealerships comprised of 141 franchises, 33 brands, and 32 collision service centers located in California, Colorado, Florida, Georgia, Louisiana, Massachusetts, New Jersey, New Mexico, New York, Oklahoma and Texas. Through its dealerships and Internet sites, 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.