Republic Industries, Inc. Reports An 80% Increase In Income
30 July 1998
Republic Industries, Inc. Reports An 80% Increase In Income From Continuing Operations And A 74% Increase In Revenue
FORT LAUDERDALE, Fla., July 30 -- Republic Industries, Inc.
today reported that for the three months ended June 30, 1998
income from continuing operations increased 80 percent to $127.4 million, or
27 cents per share, from $70.9 million, or 17 cents per share for the same
period in 1997. For the six months ended June 30, 1998, income from
continuing operations increased 91 percent to $204.5 million, or 44 cents per
share, from $106.9 million, or 25 cents per share for the same period last
year.
Revenue for the three months ended June 30, 1998, increased 74 percent to
$4.4 billion from $2.5 billion for the same period in 1997. Revenue for the
six months ended June 30, 1998, increased 75 percent to $7.8 billion compared
to $4.5 billion reported last year.
Operating income for the three months ended June 30, 1998, increased 98
percent to $210.7 million compared to $106.3 million, excluding restructuring
and other charges, for the same period in 1997. Operating income for the six
months ended June 30, 1998, increased 114 percent to $334.8 million from
$156.1 million, excluding restructuring and other charges last year. During
the three months ended June 30, 1997, Republic Industries benefited from a
$102.3 million pre-tax gain from the sale of its 15 million shares of ADT
Limited common stock and recorded a $94.1 million pre-tax provision for
restructuring and other charges related to the integration of its automotive
rental companies.
Commenting on the Company's performance in the second quarter of 1998,
Steven R. Berrard, President and Co-CEO of Republic Industries, said, "This
was an outstanding quarter for our Company. We achieved strong revenue growth
in all divisions and operating margin improvements in our automotive retail
and solid waste operations. During the second quarter, the automotive retail
group made significant strides in leveraging its operations, resulting in
operating margins of 3.3 percent versus 1.1 percent last year. During the
quarter, we acquired 22 automotive franchises. In addition, we opened three
AutoNation USA megastores raising our total to 29 company owned stores. We
also completed the conversion of eight Driver's Mart franchise locations to
AutoNation USA megastores.
"Our automotive rental operations experienced strong revenue growth during
the quarter; however, operating income results were impacted by weakness in
the leisure segment.
"On July 7, 1998, we completed an initial public offering of Republic
Services, Inc. . The offering raised net proceeds of $1.44 billion
dollars in capital which will be used to finance the growth of our automotive
retail and rental operations. As a result of the offering, Republic
Industries, Inc. owns approximately 63.9 percent of the outstanding shares of
Republic Services, Inc. Republic Industries anticipates distributing its
remaining shares of Republic Services as a dividend to existing stockholders
of Republic Industries during the first or second quarter of 1999, subject to
the receipt of a favorable ruling from the IRS."
For the three months ended June 30, 1998, revenue for Republic Services,
Inc. increased 18 percent to $335.9 million from $283.7 million last year.
Operating income increased 50 percent to $70.7 million from $47.1 million last
year.
For the six months ended June 30, 1998, revenue rose 16 percent to $636.7
million from $546.9 million last year. Operating income increased 47% to
$129.7 million from $88.1 million last year.
Republic Industries, Inc. operates subsidiaries in the automotive
retailing, automotive rental, and solid waste services industries. The
Company owns the nation's largest chain of new vehicle dealerships and is
building a chain of used car megastores which it operates under the AutoNation
brand name. Republic also owns National Car Rental System, Inc., Alamo
Rent-A-Car, Inc. and CarTemps USA.
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, forecasts, estimates and expectations is
contained in the Company's SEC filings.
REPUBLIC INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
(a) (a)
Revenue $4,373.3 $2,513.9 $7,793.2 $4,456.1
Expenses:
Cost of operations 3,637.4 2,103.0 6,478.6 3,722.5
Selling, general and
administrative 525.2 304.6 979.8 577.5
Restructuring and
other charges --- 94.1 --- 94.1
Operating income 210.7 12.2 334.8 62.0
Interest income
(expense), net (9.0) (2.0) (10.7) 1.2
Other income (expense)(2.6) 101.4 (4.6) 105.1
Income from continuing
operations before
income taxes 199.1 111.6 319.5 168.3
Provision for
income taxes 71.7 40.7 115.0 61.4
Income from continuing
operations 127.4 70.9 204.5 106.9
Income from discontinued
operations --- 3.6 --- 6.3
Net income $ 127.4 $74.5 $204.5 $113.2
Diluted income
per common and
common equivalent share:
Continuing operations $0.27 $0.17 $ 0.44 $0.25
Discontinued operations --- 0.01 --- 0.02
Net income $0.27 $0.18 $ 0.44 $0.27
Weighted average
common and common
equivalent shares 473.9 423.5 466.0 419.3
(a) Operating results for the three and six month periods ended June 30,
1997 have been restated to reflect business combinations accounted for under
the pooling of interests method of accounting and to account for the Company's
electronic security services division as discontinued operations.
REPUBLIC INDUSTRIES, INC.
UNAUDITED SUPPLEMENTAL SEGMENT DATA
(In millions)
Three Months Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
Revenue:
Automotive
retail $3,172.6 72% $1,490.7 59% $5,516.0 71% $2,528.4 57%
Automotive
rental 864.8 20% 739.5 30% 1,640.5 21% 1,380.8 31%
Solid waste
services 335.9 8% 283.7 11% 636.7 8% 546.9 12%
$4,373.3 100% $2,513.9 100% $7,793.2 100% $4,456.1 100%
Operating Income:
Automotive
retail $104.2 3% $17.0 1% 160.6 3% 30.2 1%
Automotive
rental 45.1 5% 46.5 6% 64.2 4% 46.2 3%
Solid waste
services 74.4 22% 49.6 17% 137.2 22% 92.7 17%
Corporate
expenses (13.0) (6.8) (27.2) (13.0)
Restructuring
and other
charges (94.1) (94.1)
$210.7 5% $12.2 --- $334.8 4% $62.0 1%