Group 1 Automotive Reports 38 Percent Second-Quarter Earnings Increase
HOUSTON--Aug. 1, 2006--| Acquires California Toyota Dealership; Sells Chevrolet Dealership |
Group 1 Automotive, Inc. , a Fortune 500 automotive retailer, today reported that second-quarter net income increased 37.5 percent to $24.9 million, on revenues of $1.6 billion. Diluted earnings per share grew 33.3 percent to $1.00. This compares with net income of $18.1 million, or $0.75 per diluted share, in the second quarter of 2005.
Second-quarter gross margin improved 40 basis points to 15.6 percent, primarily attributable to an 80 basis-point increase in total used vehicle margin and a 30 basis-point increase in new vehicle margin. Used vehicle gross profit rose 6.6 percent reflecting an increase of 3.9 percent in used retail revenues, and new vehicle gross profit increased 2.6 percent on 1.2 percent lower revenues. Parts and service revenues increased 1 percent, as a 4 percent increase in customer-pay business was offset by lower warranty business. Finance and insurance revenues declined 2.3 percent reflecting lower new vehicle unit sales and an increased use of subsidized financing incentives by the manufacturers.
Group 1 also achieved a 500 basis-point reduction in total selling, general and administrative expenses to 75.1 percent of gross profit, primarily attributable to gross profit improvements and its continued focus on increasing operating efficiencies.
Included in the second-quarter results, the company recognized a $5.9 million pretax business interruption insurance credit stemming from the losses incurred at its New Orleans dealerships that was partially offset by a previously announced $4.5 million pretax cash payment to settle the lease termination dispute related to its Dodge store in New Orleans as a result of the damage it sustained in Hurricane Katrina.
Operating margin improved 80 basis points from the prior year to 3.6 percent, and pretax margin improved 70 basis points to 2.5 percent.
"We are delighted with our margin improvements, both on a consolidated and same store basis," said Earl J. Hesterberg, Group 1's president and chief executive officer. "Our team has continued to implement our operating efficiency improvement initiatives, resulting in another solid performance this quarter."
On a same-store basis, used vehicle retail revenues increased 4.7 percent on 2.2 percent higher unit sales, while new vehicle revenues declined 2.5 percent on 2.2 percent lower unit sales. The new vehicle sales decline was more than explained by weakness in domestic brands that was consistent with the overall performance of these brands. Parts and service revenues rose 2.6 percent and finance and insurance revenues fell 2.4 percent. Gross margin improved 60 basis points to 15.8 percent.
Total floorplan interest expense expanded 29.4 percent to $13.0 million, reflecting a continued upward trend in interest rates. Partially offsetting the higher rates was a $75.9 million decrease in weighted average floorplan borrowings. Other interest expense also declined $0.7 million, or 15.1 percent, reflecting a decrease of $50.7 million in borrowings outstanding in the period. As a result of the issuance of 2.25% convertible notes, the long-term debt-to-equity ratio increased to 40 percent.
Share Repurchase
In connection with a $287.5 million convertible debt offering that was completed during the second quarter, Group 1 repurchased 933,800 shares of its common stock at an average price of $53.54, completing its board-authorized $50 million share repurchase program. In addition, the company also repurchased 51,000 shares of its common stock at an average price of $58.00 under a separate board authorization to fund the share delivery requirements under its existing employee stock purchase plan.
Acquisition and Disposition Update
In July, Group 1 acquired its second Toyota/Scion dealership in the Los Angeles area. The dealership will operate under the name of Miller Toyota/Scion of Anaheim. Additionally, the company was granted a Suzuki add-point dealership in the Los Angeles area in May, further augmenting its brand mix. The two franchises are expected to generate $133.6 million in estimated annual revenues. Year to date, the company has added five franchises with $263.7 million in estimated annual revenues toward its full-year acquisition target of $500 million.
In July, the company disposed of a Kia franchise in the Sacramento area and a Chevrolet franchise in Denver, its sole Colorado dealership. These franchises generated $59.9 million in revenues during the trailing twelve-month period. Year to date, the company has disposed of 12 franchises with $194.3 million in trailing twelve-month revenues, exceeding its $190 million full-year target.
Management's Outlook
Group 1 reaffirmed its 2006 full-year earnings guidance range of $3.40 to $3.70 per diluted share. This guidance is based on the following assumptions:
-- Industry seasonally adjusted annual sales rate of 16.5 to 16.7 million vehicles.
-- A 25 basis-point increase in interest rates over the remainder of the year.
-- An estimated average of 24.4 million shares outstanding.
-- The implementation of SFAS No. 123(R), "Share Based Payment," that the company estimates will have a full-year negative earnings impact of $0.10 per diluted share.
This guidance excludes the impacts of any future acquisitions or dispositions.
Group 1 Automotive, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended June 30,
------------------------------------
2006 2005 % Change
---------- ---------- ----------
REVENUES:
New vehicle retail sales $ 968,399 $ 980,375 (1.2)%
Used vehicle retail sales 289,760 278,787 3.9
Used vehicle wholesale sales 87,053 106,786 (18.5)
Parts and service 164,641 163,057 1.0
Finance and insurance 47,193 48,328 (2.3)
---------- ---------- ----------
Total revenues 1,557,046 1,577,333 (1.3)%
COST OF SALES:
New vehicle retail sales 898,087 911,815 (1.5)%
Used vehicle retail sales 252,632 244,053 3.5
Used vehicle wholesale sales 87,783 107,378 (18.2)
Parts and service 74,882 73,998 1.2
---------- ---------- ----------
Total cost of sales 1,313,384 1,337,244 (1.8)%
GROSS PROFIT 243,662 240,089 1.5 %
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 182,944 192,347 (4.9)%
DEPRECIATION AND
AMORTIZATION EXPENSE 4,372 4,302 1.6 %
---------- ---------- ----------
INCOME FROM OPERATIONS 56,346 43,440 29.7 %
OTHER INCOME (EXPENSE):
Floorplan interest expense (13,033) (10,074) 29.4 %
Other interest expense, net (3,997) (4,706) (15.1)
Other income (expense), net (271) 11 (2,563.6)
---------- ---------- ----------
INCOME BEFORE INCOME TAXES 39,045 28,671 36.2 %
PROVISION FOR INCOME TAXES 14,173 10,582 33.9 %
---------- ---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING
PRINCIPLE 24,872 18,089 37.5 %
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE, NET OF TAX
BENEFIT OF $10,231 - - -
---------- ---------- ----------
NET INCOME $ 24,872 $ 18,089 37.5 %
========== ========== ==========
DILUTED EARNINGS PER SHARE:
Income before cumulative effect of
a change in accounting
principle $ 1.00 $ 0.75 33.3 %
Cumulative effect of a change in
accounting principle - - -
---------- ---------- ----------
Net income $ 1.00 $ 0.75 33.3 %
========== ========== ==========
Weighted average diluted shares
outstanding 24,840 23,985 3.6 %
Six Months Ended June 30,
------------------------------------
2006 2005 % Change
---------- ---------- ----------
REVENUES:
New vehicle retail sales $1,828,527 $1,814,320 0.8 %
Used vehicle retail sales 555,680 540,332 2.8
Used vehicle wholesale sales 167,746 202,980 (17.4)
Parts and service 327,507 322,517 1.5
Finance and insurance 95,151 93,911 1.3
---------- ---------- ----------
Total revenues 2,974,611 2,974,060 0.0 %
COST OF SALES:
New vehicle retail sales 1,693,701 1,686,648 0.4 %
Used vehicle retail sales 483,512 472,222 2.4
Used vehicle wholesale sales 167,497 203,454 (17.7)
Parts and service 149,415 147,157 1.5
---------- ---------- ----------
Total cost of sales 2,494,125 2,509,481 (0.6)%
GROSS PROFIT 480,486 464,579 3.4 %
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 363,420 374,637 (3.0)%
DEPRECIATION AND
AMORTIZATION EXPENSE 8,935 9,925 (10.0)%
---------- ---------- ----------
INCOME FROM OPERATIONS 108,131 80,017 35.1 %
OTHER INCOME (EXPENSE):
Floorplan interest expense (24,878) (18,739) 32.8 %
Other interest expense, net (7,987) (9,830) (18.8)
Other income (expense), net (245) 8 (3,162.5)
---------- ---------- ----------
INCOME BEFORE INCOME TAXES 75,021 51,456 45.8 %
PROVISION FOR INCOME TAXES 27,838 18,967 46.8 %
---------- ---------- ----------
INCOME BEFORE CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING
PRINCIPLE 47,183 32,489 45.2 %
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE, NET OF TAX
BENEFIT OF $10,231 - (16,038) N/A
---------- ---------- ----------
NET INCOME $ 47,183 $ 16,451 186.8 %
========== ========== ==========
DILUTED EARNINGS PER SHARE:
Income before cumulative effect
of a change in accounting
principle $ 1.91 $ 1.36 40.4 %
Cumulative effect of a change in
accounting principle - (0.67) -
---------- ---------- ----------
Net income $ 1.91 $ 0.69 176.8 %
========== ========== ==========
Weighted average diluted shares
outstanding 24,647 23,935 3.0 %
Group 1 Automotive, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
June 30, December 31,
2006 2005 % Change
---------- ----------- ---------
(Unaudited)
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 77,454 $ 37,695 105.5 %
Contracts in transit and vehicle
receivables, net 145,968 187,769 (22.3)
Accounts and notes receivable, net 73,954 81,463 (9.2)
Inventories 840,212 756,838 11.0
Deferred income taxes 17,600 18,780 (6.3)
Prepaid expenses and other current
assets 16,926 23,283 (27.3)
---------- ----------- ---------
Total current assets 1,172,114 1,105,828 6.0
PROPERTY AND EQUIPMENT, net 166,258 161,317 3.1
GOODWILL 386,234 372,844 3.6
INTANGIBLE FRANCHISE RIGHTS 176,892 164,210 7.7
DEFERRED INCOME TAXES 4,443 - 100.0
OTHER ASSETS 38,301 29,419 30.2
---------- ----------- ---------
Total assets $1,944,242 $ 1,833,618 6.0 %
========== =========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Floorplan notes payable - credit
facility $ 227,649 $ 407,396 (44.1)%
Floorplan notes payable -
manufacturer affiliates 357,737 316,189 13.1
Current maturities of long-term
debt 810 786 3.1
Accounts payable 113,587 124,857 (9.0)
Accrued expenses 106,043 119,404 (11.2)
---------- ----------- ---------
Total current
liabilities 805,826 968,632 (16.8)
LONG-TERM DEBT, net of current
maturities 433,197 158,074 174.0
DEFERRED INCOME TAXES - 28,862 (100.0)
OTHER LIABILITIES 27,812 25,356 9.7
---------- ----------- ---------
Total liabilities before
deferred revenues 1,266,835 1,180,924 7.3
---------- ----------- ---------
DEFERRED REVENUES 22,895 25,901 (11.6)
STOCKHOLDERS' EQUITY:
Common stock 250 246 1.6
Additional paid-in capital 288,058 276,904 4.0
Retained earnings 413,678 373,162 10.9
Accumulated other comprehensive
income (loss) 3,768 (706) (633.7)
Deferred stock-based compensation - (5,413) (100.0)
Treasury stock (51,242) (17,400) 194.5
---------- ----------- ---------
Total stockholders'
equity 654,512 626,793 4.4
---------- ----------- ---------
Total liabilities and
stockholders' equity $1,944,242 $ 1,833,618 6.0 %
========== =========== =========
BALANCE SHEET DATA:
Working capital $ 366,288 $ 137,196 167.0 %
Current ratio 1.45 1.14 27.2
Long-term debt to capitalization 40% 20%
Inventory days supply: (1)
New vehicle 62 56 10.7 %
Used vehicle 29 28 3.6
(1) 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,
--------------- ---------------
2006 2005 2006 2005
------- ------- ------- -------
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
Region Geographic Market
-------------------------------------
Northeast Massachusetts 12.8 % 12.9 % 13.0 % 12.9 %
New Hampshire 4.2 0.2 3.9 0.1
New Jersey 2.9 2.8 2.8 2.8
New York 2.3 2.5 2.4 2.5
------ ------ ------ ------
22.2 18.4 22.1 18.3
Southeast Florida 4.5 5.9 4.9 5.9
Georgia 3.8 4.8 3.8 4.7
Louisiana 5.6 5.6 5.9 5.7
------ ------ ------ ------
13.9 16.3 14.6 16.3
South Central Oklahoma 11.3 12.2 10.5 11.7
Central Texas 11.0 12.2 11.2 12.1
Southeast Texas 17.6 14.5 17.2 14.7
------ ------ ------ ------
39.9 38.9 38.9 38.5
West Central Colorado 0.4 1.0 0.4 1.0
New Mexico 2.0 3.0 2.1 2.8
West Texas 5.7 5.6 5.8 5.7
------ ------ ------ ------
8.1 9.6 8.3 9.5
California California 15.9 16.8 16.1 17.4
------ ------ ------ ------
100.0 % 100.0 % 100.0 % 100.0 %
NEW VEHICLE UNIT SALES BRAND MIX:
Toyota/Scion/Lexus 35.6 % 28.9 % 34.6 % 28.7 %
Ford 15.9 18.2 16.4 18.3
DaimlerChrysler 12.9 14.8 13.5 14.7
Nissan/Infiniti 9.9 10.6 10.2 11.4
Honda/Acura 10.0 9.3 9.7 9.2
GM 8.7 11.4 8.4 10.8
Other 7.0 6.8 7.2 6.9
------- ------- ------- -------
100.0 % 100.0 % 100.0 % 100.0 %
NEW VEHICLE UNIT OTHER MIX:
Import 51.5 % 45.4 % 50.5 % 46.2 %
Domestic 31.9 38.9 32.7 38.2
Luxury 16.6 15.7 16.8 15.6
------- ------- ------- -------
100.0 % 100.0 % 100.0 % 100.0 %
Car 51.2 % 45.4 % 49.4 % 45.5 %
Truck 48.8 54.6 50.6 54.5
------- ------- ------- -------
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,
-----------------------------------
2006 2005 % Change
----------- ----------- ---------
REVENUES:
New vehicle retail sales $ 968,399 $ 980,375 (1.2)%
Used vehicle retail sales 289,760 278,787 3.9
Used vehicle wholesale sales 87,053 106,786 (18.5)
----------- ----------- ---------
Total used 376,813 385,573 (2.3)
Parts and service 164,641 163,057 1.0
Finance and insurance 47,193 48,328 (2.3)
----------- ----------- ---------
Total $1,557,046 $1,577,333 (1.3)%
GROSS MARGIN:
New vehicle retail sales 7.3 % 7.0 %
Used vehicle retail sales 12.8 12.5
Used vehicle wholesale sales (0.8) (0.6)
----------- -----------
Total used 9.7 8.9
Parts and service 54.5 54.6
Finance and insurance 100.0 100.0
----------- -----------
Total 15.6 % 15.2 %
GROSS PROFIT:
New vehicle retail sales $ 70,312 $ 68,560 2.6 %
Used vehicle retail sales 37,128 34,734 6.9
Used vehicle wholesale sales (730) (592) (23.3)
----------- ----------- ---------
Total used 36,398 34,142 6.6
Parts and service 89,759 89,059 0.8
Finance and insurance 47,193 48,328 (2.3)
----------- ----------- ---------
Total $ 243,662 $ 240,089 1.5 %
UNITS SOLD:
Retail new vehicles sold 33,442 33,721 (0.8)%
Retail used vehicles sold 17,549 17,441 0.6
Wholesale used vehicles sold 11,757 13,240 (11.2)
----------- ----------- ---------
Total used 29,306 30,681 (4.5)%
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales $ 2,103 $ 2,033 3.4 %
Used vehicle retail sales 2,116 1,992 6.2
Used vehicle wholesale sales (62) (45) (37.8)
Total used 1,242 1,113 11.6
Finance and insurance (per retail
unit) 926 945 (2.0)
OTHER:
SG&A expenses $ 182,944 $ 192,347 (4.9)%
SG&A as % revenues 11.7 % 12.2 %
SG&A as % gross profit 75.1 % 80.1 %
Operating margin 3.6 % 2.8 %
Pretax income margin 2.5 % 1.8 %
Floorplan interest $ (13,033) $ (10,074) 29.4 %
Floorplan assistance 9,691 9,656 0.4
----------- ----------- ---------
Net floorplan expense $ (3,342) $ (418) 699.5 %
Six Months Ended June 30,
-----------------------------------
2006 2005 % Change
----------- ----------- ---------
REVENUES:
New vehicle retail sales $1,828,527 $1,814,320 0.8 %
Used vehicle retail sales 555,680 540,332 2.8
Used vehicle wholesale sales 167,746 202,980 (17.4)
----------- ----------- ---------
Total used 723,426 743,312 (2.7)
Parts and service 327,507 322,517 1.5
Finance and insurance 95,151 93,911 1.3
----------- ----------- ---------
Total $2,974,611 $2,974,060 0.0 %
GROSS MARGIN:
New vehicle retail sales 7.4 % 7.0 %
Used vehicle retail sales 13.0 12.6
Used vehicle wholesale sales 0.1 (0.2)
----------- -----------
Total used 10.0 9.1
Parts and service 54.4 54.4
Finance and insurance 100.0 100.0
----------- -----------
Total 16.2 % 15.6 %
GROSS PROFIT:
New vehicle retail sales $ 134,826 $ 127,672 5.6 %
Used vehicle retail sales 72,168 68,110 6.0
Used vehicle wholesale sales 249 (474) 152.5
----------- ----------- ---------
Total used 72,417 67,636 7.1
Parts and service 178,092 175,360 1.6
Finance and insurance 95,151 93,911 1.3
----------- ----------- ---------
Total $ 480,486 $ 464,579 3.4 %
UNITS
SOLD:
Retail new vehicles sold 62,411 62,554 (0.2)%
Retail used vehicles sold 33,812 34,683 (2.5)
Wholesale used vehicles sold 22,412 25,688 (12.8)
----------- ----------- ---------
Total used 56,224 60,371 (6.9)%
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales $ 2,160 $ 2,041 5.8 %
Used vehicle retail sales 2,134 1,964 8.7
Used vehicle wholesale sales 11 (18) 161.1
Total
used 1,288 1,120 15.0
Finance and insurance (per retail
unit) 989 966 2.4
OTHER:
SG&A expenses $ 363,420 $ 374,637 (3.0)%
SG&A as % revenues 12.2 % 12.6 %
SG&A as % gross profit 75.6 % 80.6 %
Operating margin 3.6 % 2.7 %
Pretax income margin 2.5 % 1.7 %
Floorplan interest $ (24,878) $ (18,739) 32.8 %
Floorplan assistance 18,162 17,835 1.8
----------- ----------- ---------
Net floorplan expense $ (6,716) $ (904) 642.9 %
Group 1 Automotive, Inc.
Additional Information - Same Store(1)
(Unaudited)
(Dollars in thousands, except per unit amounts)
Three Months Ended June 30,
-----------------------------------
2006 2005 % Change
----------- ----------- ---------
REVENUES:
New vehicle retail sales $ 928,882 $ 952,251 (2.5)%
Used vehicle retail sales 281,681 268,993 4.7
Used vehicle wholesale sales 83,101 101,747 (18.3)
----------- ----------- ---------
Total used 364,782 370,740 (1.6)
Parts and service 160,982 156,979 2.6
Finance and insurance 45,653 46,782 (2.4)
----------- ----------- ---------
Total $1,500,299 $1,526,752 (1.7)%
GROSS MARGIN:
New vehicle retail sales 7.3 % 7.0 %
Used vehicle retail sales 12.9 12.5
Used vehicle wholesale sales (0.9) (0.4)
----------- -----------
Total used 9.8 8.9
Parts and service 54.4 54.7
Finance and insurance 100.0 100.0
----------- -----------
Total 15.8 % 15.2 %
GROSS PROFIT:
New vehicle retail sales $ 67,553 $ 67,082 0.7 %
Used vehicle retail sales 36,345 33,552 8.3
Used vehicle wholesale sales (775) (448) (73.0)
----------- ----------- ---------
Total used 35,570 33,104 7.4
Parts and service 87,535 85,806 2.0
Finance and insurance 45,653 46,782 (2.4)
----------- ----------- ---------
Total $ 236,311 $ 232,774 1.5 %
UNITS SOLD:
Retail new vehicles sold 32,001 32,709 (2.2)%
Retail used vehicles sold 17,141 16,777 2.2
Wholesale used vehicles sold 11,128 12,524 (11.1)
----------- ----------- ---------
Total used 28,269 29,301 (3.5)%
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales $ 2,111 $ 2,051 2.9 %
Used vehicle retail sales 2,120 2,000 6.0
Used vehicle wholesale sales (70) (36) (94.4)
Total used 1,258 1,130 11.3
Finance and insurance (per retail
unit) 929 945 (1.7)
OTHER:
SG&A expenses $ 180,853 $ 184,844 (2.2)%
SG&A as % revenues 12.1 % 12.1 %
SG&A as % gross profit 76.5 % 79.4 %
Operating margin 3.4 % 2.9 %
Floorplan interest $ (12,595) $ (9,580) 31.5 %
Floorplan assistance 9,347 9,304 0.5
----------- ----------- ---------
Net floorplan expense $ (3,248) $ (276) 1,076.8 %
Six Months Ended June 30,
-----------------------------------
2006 2005 % Change
----------- ----------- ---------
REVENUES:
New vehicle retail sales $1,757,133 $1,767,155 (0.6)%
Used vehicle retail sales 540,231 522,624 3.4
Used vehicle wholesale sales 160,630 194,953 (17.6)
----------- ----------- ---------
Total used 700,861 717,577 (2.3)
Parts and service 320,642 312,206 2.7
Finance and insurance 92,439 91,238 1.3
----------- ----------- ---------
Total $2,871,075 $2,888,176 (0.6)%
GROSS MARGIN:
New vehicle retail sales 7.4 % 7.1 %
Used vehicle retail sales 13.1 12.6
Used vehicle wholesale sales 0.1 (0.1)
----------- -----------
Total used 10.1 9.1
Parts and service 54.2 54.4
Finance and insurance 100.0 100.0
----------- -----------
Total 16.3 % 15.6 %
GROSS PROFIT:
New vehicle retail sales $ 129,830 $ 125,232 3.7 %
Used vehicle retail sales 70,647 65,758 7.4
Used vehicle wholesale sales 185 (227) 181.5
----------- ----------- ---------
Total used 70,832 65,531 8.1
Parts and service 173,932 169,851 2.4
Finance and insurance 92,439 91,238 1.3
----------- ----------- ---------
Total $ 467,033 $ 451,852 3.4 %
UNITS SOLD:
Retail new vehicles sold 59,901 60,801 (1.5)%
Retail used vehicles sold 33,068 33,468 (1.2)
Wholesale used vehicles sold 21,377 24,492 (12.7)
----------- ----------- ---------
Total used 54,445 57,960 (6.1)%
GROSS PROFIT PER UNIT SOLD:
New vehicle retail sales $ 2,167 $ 2,060 5.2 %
Used vehicle retail sales 2,136 1,965 8.7
Used vehicle wholesale sales 9 (9) 200.0
Total
used 1,301 1,131 15.0
Finance and insurance (per retail
unit) 994 968 2.7
OTHER:
SG&A expenses $ 356,712 $ 361,142 (1.2)%
SG&A as % revenues 12.4 % 12.5 %
SG&A as % gross profit 76.4 % 79.9 %
Operating margin 3.5 % 2.8 %
Floorplan interest $ (24,090) $ (17,875) 34.8 %
Floorplan assistance 17,564 17,259 1.8
----------- ----------- ---------
Net floorplan expense $ (6,526) $ (616) 959.4 %
(1) 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, but exclude the
results of our two New Orleans dealerships that were closed as a
result of Hurricane Katrina in August of 2005.