Group 1 Automotive Reports Second-Quarter Results
HOUSTON--Aug. 2, 2005--Group 1 Automotive, Inc. , a Fortune 500 specialty retailer, today reported that its second-quarter net income increased 15.1 percent to $18.1 million, or $0.75 per diluted share, from $15.7 million, or $0.67 per diluted share, in the second quarter of 2004.
Summary Results of Operations (Unaudited)
(In millions, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues $1,577.3 $1,314.9 $2,974.1 $2,461.9
Gross Profit $ 240.1 $ 198.5 $ 464.6 $ 381.9
Income from Operations $ 43.4 $ 35.0 $ 80.0 $ 68.2
Income before Cumulative
Effect of a Change in
Accounting Principle $ 18.1 $ 15.7 $ 32.5 $ 26.2
Diluted Earnings per Share
before Cumulative Effect
of a Change in
Accounting Principle $ 0.75 $ 0.67 $ 1.36 $ 1.12
Second-Quarter Results
Total revenues for the second quarter increased 20.0 percent to a record $1.6 billion. Gross profit increased 20.9 percent from the prior-year period to $240.1 million, reflecting a 10 basis point increase in gross margin to 15.2 percent. Income from operations was $43.4 million in the second quarter, a 24.2 percent increase from 2004. Operating margin was 2.8 percent, compared with 2.7 percent in the prior-year period.
On a same store basis, revenues grew 3.9 percent, highlighted by increases in each of the company's businesses. Gross profit increased 4.5 percent, reflecting increases of 11.4 percent in total used vehicles, 4.3 percent in parts and service, and 6.9 percent in finance and insurance, offset by a slight decrease in new vehicles. Same store gross margin increased by 10 basis points to 15.2 percent. Same store selling, general and administrative expenses as a percentage of gross profit declined by 40 basis points, and operating margin was unchanged at 2.7 percent compared with the prior-year period.
The company's net income for the second quarter was $18.1 million, or $0.75 per diluted share, compared with $0.67 per diluted share on net income of $15.7 million in the prior-year period. Excluding the compensation and other costs associated with the company's CEO transition, as described in the attached schedules, net income for the quarter was $0.79 per diluted share versus $0.67 per diluted share in 2004 on a comparable basis.
"We are pleased with our overall performance this quarter," said Earl J. Hesterberg, Group 1's president and chief executive officer. "Importantly, we delivered solid same store growth in revenues and profitability and reduced our new vehicle inventories to 62 days' supply, 16 days lower than the same time last year."
Year-to-Date Results
For the first six months of 2005, revenues grew 20.8 percent to $3.0 billion. New vehicle revenues grew 21.8 percent and total used vehicle revenues grew 17.0 percent, while parts and service and finance and insurance revenues grew 26.3 percent and 15.3 percent, respectively. On a same store basis, total revenues were up 2.1 percent from 2004.
Income before the cumulative effect of a change in accounting principle for the six-month period was $32.5 million, or $1.36 per diluted share, compared with $26.2 million, or $1.12 per diluted share, during 2004. Excluding certain items described in the attached schedules, six-month net income was $1.40 per diluted share versus $1.29 per diluted share in 2004 on a comparable basis.
Platform Consolidations
Effective July 1, Group 1's Beaumont, Texas, platform of dealerships was consolidated into the company's Houston platform. The Beaumont and Houston platforms contributed 2.4 percent and 12.3 percent, respectively, of the company's total new vehicle unit sales during the first six months of 2005. The consolidated platform will now be known as the Houston Metro Platform.
In addition, effective Aug. 1, the company's Rocky Mountain platform, with operations in New Mexico and Colorado, was consolidated into its West Texas platform. The Rocky Mountain and West Texas platforms contributed 3.9 percent and 7.0 percent, respectively, of the company's total new vehicle unit sales during the first six months of 2005. The consolidated platform will now be known as the West Central Platform.
"The consolidation of these relatively small platforms into their larger, neighboring platforms should result in improved economies of scale and operating efficiencies," said Hesterberg.
Acquisition Update
In May, Group 1 acquired BMW of Stratham in New Hampshire. The franchise, expected to generate $53.0 million in estimated annual revenues, is operating as part of the company's nearby Ira Motor Group, based in Boston. Also during May, the company acquired Chrysler and Jeep franchises in Rockwall, Texas, to augment its existing Dodge dealership in that Dallas-area market. These two franchises are expected to generate $9.7 million in estimated annual revenues.
Including these acquisitions, the company has acquired five franchises with total estimated annual revenues of $108.7 million during 2005. The company noted that it still anticipates acquiring a total of $300 million in estimated annual revenues during 2005.
Management's Outlook
The company tightened its 2005 earnings guidance to $2.95 to $3.02 per diluted share. This guidance is based on average diluted shares outstanding of 24.0 million and excludes the impact of future acquisitions and any cumulative effect of a change in accounting principle.
"Although some recent manufacturer incentive programs have succeeded in stimulating new vehicle sales, it remains to be seen whether this positive momentum can be sustained," said Hesterberg. "Our full-year guidance assumes that our markets will remain highly competitive, and that the extraordinary pace of industry sales in recent months will not be maintained."
About Group 1 Automotive, Inc.
Group 1 owns 95 automotive dealerships comprised of 143 franchises, 33 brands and 31 collision service centers located in California, Colorado, Florida, Georgia, Louisiana, Massachusetts, New Hampshire, 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.
FINANCIAL TABLES TO FOLLOW
Group 1 Automotive, Inc.
Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended June 30,
------------------------------------
2005 2004 %Change
----------- ----------- ---------
REVENUES:
New vehicle retail sales $ 980,375 $ 813,918 20.5 %
Used vehicle retail sales 278,787 241,342 15.5
Used vehicle wholesale sales 106,786 87,106 22.6
Parts and service 163,057 131,283 24.2
Finance and insurance 48,328 41,252 17.2
----------- ----------- ---------
Total revenues 1,577,333 1,314,901 20.0 %
COST OF SALES:
New vehicle retail sales 911,815 756,519 20.5 %
Used vehicle retail sales 244,053 212,154 15.0
Used vehicle wholesale sales 107,378 88,723 21.0
Parts and service 73,998 58,995 25.4
----------- ----------- ---------
Total cost of sales 1,337,244 1,116,391 19.8 %
GROSS PROFIT 240,089 198,510 20.9 %
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 192,347 159,941 20.3 %
DEPRECIATION AND
AMORTIZATION EXPENSE 4,302 3,607 19.3 %
----------- ----------- ---------
INCOME FROM OPERATIONS 43,440 34,962 24.2 %
OTHER INCOME (EXPENSE):
Floorplan interest expense (10,074) (5,965) 68.9 %
Other interest expense, net (4,706) (3,793) 24.1
Loss on redemption
of senior subordinated notes -- -- --
Other income (expense), net 11 (62) (117.7)
----------- ----------- ---------
INCOME BEFORE INCOME TAXES 28,671 25,142 14.0 %
PROVISION FOR INCOME TAXES 10,582 9,428 12.2 %
----------- ----------- ---------
INCOME BEFORE CUMULATIVE EFFECT OF
A CHANGE IN ACCOUNTING PRINCIPLE 18,089 15,714 15.1
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE, NET OF TAX
BENEFIT OF $10,231 -- -- --
----------- ----------- ---------
NET INCOME $ 18,089 $ 15,714 15.1 %
=========== =========== =========
DILUTED EARNINGS (LOSS)
PER SHARE:
Income before cumulative
effect of a change
in accounting principle $ 0.75 $ 0.67 11.9 %
Cumulative effect of a change
in accounting principle -- -- --
----------- ----------- ---------
Net income $ 0.75 $ 0.67 11.9 %
=========== =========== =========
Weighted average diluted
shares outstanding 23,984,671 23,354,519 2.7 %
Six Months Ended June 30,
------------------------------------
2005 2004 %Change
----------- ---------- ----------
REVENUES:
New vehicle retail sales $1,814,320 $1,489,895 21.8 %
Used vehicle retail sales 540,332 471,997 14.5
Used vehicle wholesale sales 202,980 163,297 24.3
Parts and service 322,517 255,303 26.3
Finance and insurance 93,911 81,436 15.3
---------------- ----------------------
Total revenues 2,974,060 2,461,928 20.8 %
COST OF SALES:
New vehicle retail sales 1,686,648 1,384,603 21.8 %
Used vehicle retail sales 472,222 414,239 14.0
Used vehicle wholesale sales 203,454 165,894 22.6
Parts and service 147,157 115,254 27.7
---------------- ----------------------
Total cost of sales 2,509,481 2,079,990 20.6 %
GROSS PROFIT 464,579 381,938 21.6 %
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 374,637 306,628 22.2 %
DEPRECIATION AND
AMORTIZATION EXPENSE 9,925 7,155 38.7 %
---------------- ----------------------
INCOME FROM OPERATIONS 80,017 68,155 17.4 %
OTHER INCOME (EXPENSE):
Floorplan interest expense (18,739) (10,846) 72.8 %
Other interest expense, net (9,830) (8,931) 10.1
Loss on redemption of senior
subordinated notes -- (6,381) (100.0)
Other income (expense), net 8 (63) (112.7)
---------------- ----------------------
INCOME BEFORE INCOME TAXES 51,456 41,934 22.7 %
PROVISION FOR INCOME TAXES 18,967 15,733 20.6 %
---------------- ----------------------
INCOME BEFORE CUMULATIVE EFFECT OF
A CHANGE IN ACCOUNTING PRINCIPLE 32,489 26,201 24.0
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE, NET OF TAX
BENEFIT OF $10,231 (16,038) -- --
---------------- ----------------------
NET INCOME $ 16,451 $ 26,201 (37.2) %
================ ======================
DILUTED EARNINGS (LOSS)
PER SHARE:
Income before cumulative
effect of a change
in accounting principle $ 1.36 $ 1.12 21.4 %
Cumulative effect of a change
in accounting principle (0.67) -- --
---------------- ----------------------
Net
income $ 0.69 $ 1.12 (38.4)%
================ ======================
Weighted average diluted
shares outstanding 23,935,396 23,372,162 2.4 %
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
June 30, December 31,
2005 2004 %Change
----------- ---------- ---------
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 28,449 $ 37,750 (24.6)%
Contracts in transit and vehicle
receivables, net 179,651 172,402 4.2
Accounts and notes receivable, net 78,839 76,687 2.8
Inventories 860,233 877,575 (2.0)
Deferred income taxes 17,322 14,755 17.4
Prepaid expenses and other current
assets 20,781 26,046 (20.2)
----------- ---------- ---------
Total current assets 1,185,275 1,205,215 (1.7)
PROPERTY AND EQUIPMENT, net 173,914 160,297 8.5
GOODWILL 373,819 366,673 1.9
INTANGIBLE FRANCHISE RIGHTS 171,858 187,135 (8.2)
OTHER ASSETS 25,011 27,900 (10.4)
----------- ---------- ---------
Total assets $ 1,929,877 $1,947,220 (0.9)%
=========== ========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Floorplan notes payable $ 819,929 $ 848,260 (3.3)%
Acquisition line of credit 50,000 -- N/A
Current maturities of long-term
debt 1,046 1,054 (0.8)
Accounts payable 114,513 108,920 5.1
Accrued expenses 104,982 91,528 14.7
----------- ---------- ---------
Total current liabilities 1,090,470 1,049,762 3.9
LONG-TERM DEBT, net of current
maturities 158,266 156,747 1.0
ACQUISITION LINE -- 84,000 (100.0)
DEFERRED INCOME TAXES 26,599 33,197 (19.9)
OTHER LIABILITIES 27,466 24,288 13.1
----------- ---------- ---------
Total liabilities before
deferred revenues 1,302,801 1,347,994 (3.4)
----------- ---------- ---------
DEFERRED REVENUES 28,392 32,052 (11.4)
STOCKHOLDERS' EQUITY:
Common stock 242 239 1.3
Additional paid-in capital 267,342 265,645 0.6
Retained earnings 335,382 318,931 5.2
Accumulated other comprehensive
loss (189) (173) 9.2
Deferred stock-based compensation (4,093) -- N/A
Treasury stock -- (17,468) (100.0)
----------- ---------- ---------
Total stockholders' equity 598,684 567,174 5.6
----------- ---------- ---------
Total liabilities and
stockholders' equity $ 1,929,877 $1,947,220 (0.9)%
=========== ========== =========
BALANCE SHEET DATA:
Working capital $ 94,805 $ 155,453 (39.0)%
Current ratio 1.09 1.15 (5.2)
Long-term debt to capitalization 21% 30%
Inventory days supply:(a)
New vehicle 62 70 (11.4)%
Used vehicle 29 29 --
(a) Inventory days supply equals units in inventory as of the end
of the period, divided by unit sales for the month then ended, times
30 days.
Group 1 Automotive, Inc.
Additional Information - Consolidated
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
--------------- ---------------
2005 2004 2005 2004
------- ------- ------- -------
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
Platform State(s)
-------- --------
Ira Motor Group Massachusetts 13.1 % 13.5 % 13.0 % 13.0 %
Sterling McCall Texas
Automotive Group 12.2 11.8 12.3 12.1
Bob Howard Auto Group Oklahoma 12.2 12.8 11.7 12.8
Miller Automotive
Group California 11.3 10.1 11.5 11.0
Maxwell Automotive
Group Texas 7.7 8.3 7.6 8.0
Gene Messer Auto Group Texas 7.0 8.4 7.0 8.9
Group 1 Florida Florida 5.9 6.5 5.9 6.6
Bohn Automotive Group Louisiana 5.6 6.9 5.6 7.0
Peterson Automotive California
Group 5.5 2.2 5.9 1.2
Group 1 Atlanta Georgia 4.8 5.7 4.7 5.7
Rocky Mountain Colorado/New
Automotive Group Mexico 4.0 4.1 3.9 4.1
Courtesy Auto Group Texas 3.2 3.6 3.2 3.8
David Michael Motor New Jersey
Group 2.8 3.3 2.8 2.9
Hassel Auto Group New York 2.5 -- 2.5 --
Mike Smith Automotive Texas
Group 2.2 2.8 2.4 2.9
------- ------- ------- -------
100.0 % 100.0 % 100.0 % 100.0 %
NEW VEHICLE UNIT SALES BRAND MIX:
Toyota/Scion/Lexus 28.9 % 27.9 % 28.7 % 27.4 %
Ford 18.2 21.4 18.3 22.0
DaimlerChrysler 14.8 13.9 14.7 13.6
Nissan/Infiniti 10.6 9.9 11.4 10.7
GM 11.4 11.4 10.8 11.0
Honda/Acura 9.3 10.4 9.2 10.4
Other 6.8 5.1 6.9 4.9
------- ------- ------- -------
100.0 % 100.0 % 100.0 % 100.0 %
NEW VEHICLE UNIT OTHER
MIX:
Domestic 38.9 % 43.0 % 38.2 % 43.1 %
Import 45.4 45.0 46.2 44.9
Luxury 15.7 12.0 15.6 12.0
------- ------- ------- -------
100.0 % 100.0 % 100.0 % 100.0 %
Car 45.5 % 42.4 % 45.5 % 42.1 %
Truck 54.5 57.6 54.5 57.9
------- ------- ------- -------
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,
------------------------------------
2005 2004 % Change
----------- ---------- ---------
REVENUES:
New vehicle retail sales $ 980,375 $ 813,918 20.5 %
Used vehicle retail sales 278,787 241,342 15.5
Used vehicle wholesale sales 106,786 87,106 22.6
----------- ----------------------
Total used 385,573 328,448 17.4
Parts and service 163,057 131,283 24.2
Finance and insurance 48,328 41,252 17.2
----------- ----------------------
Total $1,577,333 $1,314,901 20.0 %
GROSS MARGIN:
New vehicle retail sales 7.0 % 7.1 %
Used vehicle retail sales 12.5 12.1
Used vehicle wholesale sales (0.6) (1.9)
----------- ------------
Total used 8.9 8.4
Parts and service 54.6 55.1
Finance and insurance 100.0 100.0
----------- ------------
Total 15.2 % 15.1 %
GROSS PROFIT (LOSS):
New vehicle retail sales $ 68,560 $ 57,399 19.4 %
Used vehicle retail sales 34,734 29,188 19.0
Used vehicle wholesale sales (592) (1,617) 63.4
----------- ----------------------
Total used 34,142 27,571 23.8
Parts and service 89,059 72,288 23.2
Finance and insurance 48,328 41,252 17.2
----------- ----------------------
Total $ 240,089 $ 198,510 20.9 %
UNITS SOLD:
Retail new vehicles sold 33,721 29,441 14.5 %
Retail used vehicles sold 17,441 16,425 6.2
Wholesale used vehicles sold 13,240 11,894 11.3
----------- ------------ ----------
Total used 30,681 28,319 8.3 %
GROSS PROFIT (LOSS) PER UNIT SOLD:
New vehicle retail sales $ 2,033 $ 1,950 4.3 %
Used vehicle retail sales 1,992 1,777 12.1
Used vehicle wholesale sales (45) (136) 66.9
Total used 1,113 974 14.3
Finance and insurance (per
retail unit) 945 899 5.1
OTHER:
Adjusted used gross margin(a) 12.2 % 11.4 %
Adjusted used gross profit per
retail unit(b) $ 1,958 $ 1,679 16.6 %
SG&A expenses $ 192,347 $ 159,941 20.3 %
SG&A as % revenues 12.2 % 12.2 %
SG&A as % gross profit 80.1 % 80.6 %
Operating margin 2.8 % 2.7 %
Pretax income margin 1.8 % 1.9 %
Floorplan interest $ (10,074) $ (5,965) 68.9 %
Floorplan assistance 9,656 8,260 16.9
----------- ------------- ---------
Net floorplan benefit
(expense) $ (418) $ 2,295 (118.2)%
Six Months Ended June 30,
------------------------------------
2005 2004 %Change
----------- ---------- ---------
REVENUES:
New vehicle retail sales $1,814,320 $1,489,895 21.8 %
Used vehicle retail sales 540,332 471,997 14.5
Used vehicle wholesale sales 202,980 163,297 24.3
------------- ------------ ---------
Total used 743,312 635,294 17.0
Parts and service 322,517 255,303 26.3
Finance and insurance 93,911 81,436 15.3
------------- ------------ ----------
Total $2,974,060 $2,461,928 20.8 %
GROSS MARGIN:
New vehicle retail sales 7.0 % 7.1 %
Used vehicle retail sales 12.6 12.2
Used vehicle wholesale sales (0.2) (1.6)
Total used 9.1 8.7
------------- ------------
Parts and service 54.4 54.9
Finance and insurance 100.0 100.0
------------- ------------
Total 15.6 % 15.5 %
GROSS PROFIT (LOSS):
New vehicle retail sales $127,672 $105,292 21.3 %
Used vehicle retail sales 68,110 57,758 17.9
Used vehicle wholesale sales (474) (2,597) 81.7
------------- ------------ ----------
Total used 67,636 55,161 22.6
Parts and service 175,360 140,049 25.2
Finance and insurance 93,911 81,436 15.3
------------- ------------ ----------
Total $464,579 $381,938 21.6 %
UNITS SOLD:
Retail ne vehicles sold 62,554 53,873 16.1 %
Retail used vehicles sold 34,683 32,611 6.4
Wholesale used vehicles sold 25,688 22,684 13.2
------------- ------------ ----------
Total used 60,371 55,295 9.2 %
GROSS PROFIT (LOSS) PER UNIT SOLD:
New vehicle retail sales $2,041 $1,954 4.5 %
Used vehicle retail sales 1,964 1,771 10.9
Used vehicle wholesale sales (18) (114) 84.2
Total used 1,120 998 12.2
Finance and insurance
(per retail unit) 966 942 2.5
OTHER:
Adjusted used gross margin(a) 12.5 % 11.7 %
Adjusted used gross profit per
retail unit(b) $ 1,950 $ 1,691 15.3 %
SG&A expenses $374,637 $306,628 22.2 %
SG&A as % revenues 12.6 % 12.5 %
SG&A as % gross profit 80.6 % 80.3 %
Operating margin 2.7 % 2.8 %
Pretax income margin 1.7 % 1.7 %
Floorplan interest $(18,739) $(10,846) 72.8 %
Floorplan assistance 17,835 14,959 19.2
------------- ------------ ----------
Net floorplan benefit
(expense) $ (904) $ 4,113 (122.0) %
(a) Adjusted used gross margin equals total used vehicle gross
profit, which includes net wholesale loss, divided by used vehicle
retail sales revenues. The profit or loss on wholesale sales is
included in this number, as these transactions facilitate retail
vehicle sales and are not expected to generate profit.
(b) Adjusted used gross profit per retail unit equals total used
vehicle gross profit, which includes net wholesale loss, divided by
retail used vehicle unit sales. The profit or loss on wholesale sales
is included in this number, as these transactions facilitate retail
vehicle sales and are not expected to generate profit.
Group 1 Automotive, Inc.
Additional Information - Same Store(a)
(Unaudited)
(Dollars in thousands, except per unit amounts)
Three Months Ended June 30,
---------------------------------
2005 2004 %Change
----------- ----------- --------
REVENUES:
New vehicle retail sales $ 840,431 $ 813,918 3.3 %
Used vehicle retail sales 247,894 241,342 2.7
Used vehicle wholesale sales 94,507 87,106 8.5
----------- ----------- --------
Total used 342,401 328,448 4.2
Parts and service 138,635 131,283 5.6
Finance and insurance 44,089 41,252 6.9
----------- ----------- --------
Total $1,365,556 $1,314,901 3.9 %
GROSS MARGIN:
New vehicle retail sales 6.8% 7.1 %
Used vehicle retail sales 12.7 12.1
Used vehicle wholesale sales (0.7) (1.9)
----------- -----------
Total used 9.0 8.4
Parts and service 54.4 55.1
Finance and insurance 100.0 100.0
----------- -----------
Total 15.2% 15.1 %
GROSS PROFIT (LOSS):
New vehicle retail sales $ 57,134 $ 57,399 (0.5)%
Used vehicle retail sales 31,395 29,188 7.6
Used vehicle wholesale sales (681) (1,617) 57.9
----------- ----------- --------
Total used 30,714 27,571 11.4
Parts and service 75,412 72,288 4.3
Finance and insurance 44,089 41,252 6.9
----------- ----------- --------
Total $ 207,349 $ 198,510 4.5 %
UNITS SOLD:
Retail new vehicles sold 29,942 29,441 1.7 %
Retail used vehicles sold 15,976 16,425 (2.7)
Wholesale used vehicles sold 12,182 11,894 2.4
----------- ----------- --------
Total used 28,158 28,319 (0.6)%
GROSS PROFIT (LOSS) PER UNIT SOLD:
New vehicle retail sales $ 1,908 $ 1,950 (2.2)%
Used vehicle retail sales 1,965 1,777 10.6
Used vehicle wholesale sales (56) (136) 58.8
Total used 1,091 974 12.0
Finance and insurance (per retail
unit) 960 899 6.8
OTHER:
Adjusted used gross margin(b) 12.4% 11.4 %
Adjusted used gross profit per
retail unit(c) $ 1,923 $ 1,679 14.5 %
SG&A expenses $ 166,366 $ 159,941 4.0 %
SG&A as % revenues 12.2% 12.2 %
SG&A as % gross profit 80.2% 80.6 %
Operating margin 2.7% 2.7 %
Floorplan interest $ (8,842) $ (5,965) 48.2 %
Floorplan assistance 9,089 8,260 10.0
----------- ------------ -------
Net floorplan benefit $ 247 $ 2,295 (89.2)%
Six Months Ended June 30,
-----------------------------------
2005 2004 %Change
----------- ----------- --------
REVENUES:
New vehicle retail sales $1,515,936 $1,489,895 1.7 %
Used vehicle retail sales 471,565 471,997 (0.1)
Used vehicle wholesale sales 174,509 163,297 6.9
------------ ------------ --------
Total used 646,074 635,294 1.7
Parts and service 267,211 255,303 4.7
Finance and insurance 84,228 81,436 3.4
------------ ------------ --------
Total $2,513,449 $2,461,928 2.1 %
GROSS MARGIN:
New vehicle retail sales 6.9 % 7.1 %
Used vehicle retail sales 12.7 12.2
Used vehicle wholesale sales (0.3) (1.6)
------------ ------------
Total used 9.2 8.7
Parts and service 54.3 54.9
Finance and insurance 100.0 100.0
------------ ------------
Total 15.7 % 15.5 %
GROSS PROFIT (LOSS):
New vehicle retail sales $ 105,167 $ 105,292 (0.1)%
Used vehicle retail sales 60,042 57,758 4.0
Used vehicle wholesale sales (532) (2,597) 79.5
------------ ------------ --------
Total used 59,510 55,161 7.9
Parts and service 144,970 140,049 3.5
Finance and insurance 84,228 81,436 3.4
------------ ------------ --------
Total $ 393,875 $ 381,938 3.1 %
UNITS SOLD:
Retail new vehicles sold 54,028 53,873 0.3 %
Retail used vehicles sold 31,198 32,611 (4.3)
Wholesale used vehicles sold 22,878 22,684 0.9
------------ ------------ --------
Total used 54,076 55,295 (2.2)%
GROSS PROFIT (LOSS) PER UNIT SOLD:
New vehicle retail sales $ 1,947 $ 1,954 (0.4)%
Used vehicle retail sales 1,925 1,771 8.7
Used vehicle wholesale sales (23) (114) 79.8
Total used 1,100 998 10.2
Finance and insurance (per
retail unit) 988 942 4.9
OTHER:
Adjusted used gross margin(b) 12.6 % 11.7 %
Adjusted used gross profit per
retail unit(c) $ 1,907 $ 1,691 12.8 %
SG&A expenses $ 317,362 $ 306,628 3.5 %
SG&A as % revenues 12.6 % 12.5 %
SG&A as % gross profit 80.6 % 80.3 %
Operating margin 2.7 % 2.8 %
Floorplan interest $ (15,996) $ (10,846) 47.5 %
Floorplan assistance 16,333 14,959 9.2
------------ ------------ --------
Net floorplan benefit $ 337 $ 4,113 (91.8)%
(a) Same store amounts include the results for the identical months
in each period presented in the comparison, commencing with the first
month we owned the dealership and, in the case of dispositions, ending
with the last month we owned it. Same store results also include the
activities of the corporate office.
(b) Adjusted used gross margin equals total used vehicle gross
profit, which includes net wholesale loss, divided by used vehicle
retail sales revenues. The profit or loss on wholesale sales is
included in this number, as these transactions facilitate retail
vehicle sales and are not expected to generate profit.
(c) Adjusted used gross profit per retail unit equals total used
vehicle gross profit, which includes net wholesale loss, divided by
retail used vehicle unit sales. The profit or loss on wholesale sales
is included in this number, as these transactions facilitate retail
vehicle sales and are not expected to generate profit.
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures
(Unaudited)
(Dollars in thousands, except per share amounts)
Net Income
---------------------------
Q2 2005 Q2 2004 % Change
-------- -------- ---------
Q2 2005 vs. Q2 2004 RECONCILIATION:
As reported $18,089 $15,714 15.1 %
Adjustments:
CEO transitional expenses 1,040 --
------- ------- ---------
Adjusted(a) $19,129 $15,714 21.7 %
Net Income
---------------------------
2005 2004 % Change
------- ------- ---------
YTD 2005 vs. YTD 2004 RECONCILIATION:
As reported $16,451 $26,201 (37.2)%
Adjustments:
Change in accounting principle 16,038 --
CEO transitional expenses 1,040 --
Loss on redemption of senior
subordinated notes -- 4,011
------- ------- ---------
Adjusted(a) $33,529 $30,212 11.0 %
Diluted Earnings per
Share
-----------------------
Q2 Q2
2005 2004 % Change
------ ------ ---------
Q2 2005 vs. Q2 2004 RECONCILIATION:
As reported $0.75 $0.67 11.9 %
Adjustments:
CEO transitional expenses 0.04 --
----- ----- ---------
Adjusted(a) $0.79 $0.67 17.9 %
Diluted Earnings per
Share
-----------------------
2005 2004 % Change
----- ----- ---------
YTD 2005 vs. YTD 2004 RECONCILIATION:
As reported $0.69 $1.12 (38.4)%
Adjustments:
Change in accounting principle 0.67 --
CEO transitional expenses 0.04 --
Loss on redemption of senior
subordinated notes -- 0.17
----- ----- ---------
Adjusted(a) $1.40 $1.29 8.5 %
(a) Adjusted net income and adjusted diluted earnings per share
means net income or diluted earnings per share, as the case may be,
plus the adjustments noted above. We use adjusted net income and
adjusted diluted earnings per share in our evaluation of the
performance of the company, as we believe that they provide additional
information regarding the performance of our operations. We believe
the presentation of these measures is relevant and useful to investors
because they improve period-to-period comparability and are more
reflective of our operating performance. Neither of these measures is
a measure of financial performance under GAAP. Accordingly, they
should not be considered as substitutes for net income or diluted
earnings per share 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 net income and diluted
earnings per share calculated in accordance with GAAP. Therefore, we
typically use these adjusted numbers in conjunction with our GAAP
results to address these limitations.