AutoNation, Inc. Second Quarter 1999 Earnings:
2 August 1999
AutoNation, Inc. Second Quarter 1999 Earnings:
1. EPS From Continuing Operations Up 91%, Meeting Consensus Estimate
2. Company to Separate Rental Operations
3. Board Approves Repurchase of Additional $500 million of AN Stock
4. Maroone Named President & COO of AutoNation, Inc.
FORT LAUDERDALE, Fla., Aug. 2 -- AutoNation, Inc.
today reported that for the three months ended June 30, 1999, earnings per
share from continuing operations rose 91 percent to $0.21, or $97.1 million,
from $0.11, or $54.2 million for the same period in 1998. For the six months
ended June 30, 1999, earnings per share from continuing operations rose
89 percent to $0.34, or $155.5 million, from $0.18, or $81.9 million for the
same period last year. These results do not include the Company's automotive
rental or solid waste operations, which are reflected in income from
discontinued operations.
Revenue for the three months ended June 30, 1999, increased 60 percent to
$5.1 billion from $3.2 billion for the same period in 1998. Revenue for the
six months ended June 30, 1999, increased 75 percent to $9.6 billion compared
to $5.5 billion reported last year.
Operating income for the three months ended June 30, 1999, increased
63 percent to $154.9 million from $94.9 million last year. Operating income
for the six months ended June 30, 1999, increased 76 percent to $247.8 million
from $140.8 million last year.
Commenting on the Company's performance in the quarter, Steven R. Berrard,
Co-CEO, said, "AutoNation's automotive retail business continues to produce
outstanding results. Same store automotive franchise revenue grew 5%,
including an 8% gain in new vehicle unit sales. In Denver, where our 'Mile
High' project is now six months old, we generated same store revenue gains of
more than 20%, and we grew same store new vehicle unit sales more than 40%.
At the same time, the Company increased total automotive retail's same store
margins to 3.5% versus 3.3% last year, before retail overhead."
Commenting on the Company's position as the leading vehicle retailer on
the Internet, Mr. Berrard added, "During the second quarter, AutoNation sold
more than 10,000 vehicles via the Internet and generated over $230 million in
revenue. For the first half of 1999, we sold over 16,000 vehicles and
generated over $380 million in Internet-related revenue. AutoNationdirect.com
pairs the Internet's largest inventory of new and used vehicles with the
Internet's most comprehensive package of online automotive shopping tools,
including live online help from trained Internet sales consultants. We are on
track to offer the complete inventory of all of our more than 412 franchises
nationwide through AutoNationdirect.com by early in the fourth quarter."
Board Approves Separation of Rental Operations
AutoNation also reported that the Company's Board of Directors today
decided that it would be in the best interest of the Company and its
stockholders to separate AutoNation's automotive rental division from the
Company. The Board is exploring various strategic alternatives regarding the
form of separation. The division includes National Car Rental, Alamo Rent-A-
Car and CarTemps USA. Commenting on the planned separation, AutoNation
Chairman and Co-CEO, H. Wayne Huizenga, said, "AutoNation's Board of Directors
believes the separation will enhance shareholder value by making AutoNation a
pure play automotive retailer, enabling the investment community to better
recognize and evaluate the strengths and growth prospects of our automotive
retail operations."
Due to the planned separation, the automotive rental operations have been
reflected as discontinued operations. Income from discontinued operations,
net of taxes, for the three months ended June 30, 1999, was $404.1 million, or
$0.90 per share, including the gain on the disposal of Republic Services,
Inc., our former waste subsidiary. Income from discontinued operations, net
of taxes, for the six months ended June 30, 1999, was $425.8 million, or $0.93
per share.
Board Approves Additional $500 Million Repurchase Plan
The Company's Board of Directors has also authorized the repurchase of an
additional $500 million of common stock under the Company's share repurchase
program. The Company is now authorized to repurchase up to $1 billion in
common stock of which $449 million has been repurchased through June 30, 1999.
Maroone Named President of AutoNation, Inc.
The Company also announced today that Michael E. Maroone, 45, formerly
president of AutoNation's Automotive Retail Group, has been named President
and Chief Operating Officer of AutoNation, Inc. Mr. Maroone succeeds John H.
Costello, who has resigned. With the separation of the rental vehicle
operations from the Company, Mr. Costello decided to step down to pursue
internet business ventures outside of AutoNation.
A second-generation automotive dealer, Mr. Maroone joined AutoNation in
1997 when the then Republic Industries acquired the Maroone Group, a south
Florida-based collection of franchised automotive dealerships that Mr. Maroone
led as President and Chief Executive Officer. At the Maroone Group, Mr.
Maroone oversaw one of the world's largest General Motors franchises, the
third-largest Dodge franchise in the United States and the number one Isuzu
franchise in the world. Other Maroone Group franchises included Ford, Jeep
and Oldsmobile.
As President of the AutoNation Retail Group, Mr. Maroone had
responsibility for the operations of the company's franchised dealerships and
AutoNation USA used vehicle megastores.
AutoNation, Inc. is the world's largest automotive retailer, with more
than 412 automotive franchises and/or 42 AutoNation USA megastores in 24
states. AutoNation also operates more than 270 web sites, including
AutoNationdirect.com, which offers the Internet's largest selection of new and
used vehicles. Its automotive rental operations, including Alamo Rent-A-Car,
Inc., National Car Rental System, Inc. and CarTemps USA, operates nationally
and in more than 65 countries.
Certain statement and information incurred 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, performances, 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.
AUTONATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
1999 1998 % Change 1999 1998% Change
(a) (a)
Revenue $5,069.6 $3,172.6 60% $9,632.3 $5,516.0 75%
Cost of operations 4,362.8 2,741.0 8,315.3 4,767.1
Gross margin 706.8 431.6 64% 1,317.0 748.9 76%
Selling, general
and administrative 536.9 327.4 1,040.4 588.3
Corporate overhead 15.0 9.3 28.8 19.8
Operating income 154.9 94.9 63% 247.8 140.8 76%
Net interest expense (4.6) (8.1) (7.9) (8.6)
Other income (expense) 1.4 (2.1) 3.1 (4.3)
Income from
continuing
operations before
income taxes 151.7 84.7 79% 243.0 127.9 90%
Provision for
income taxes 54.6 30.5 87.5 46.0
Income from
continuing
operations 97.1 54.2 79% 155.5 81.9 90%
Discontinued operations:
Income from
discontinued
operations, net of
income taxes and
minority interest 24.8 73.2 46.5 122.6
Gain on disposal of
RSG shares, net of
income taxes 379.3 --- 379.3 ---
404.1 73.2 425.8 122.6
Net income $501.2 $127.4 293% $581.3 $204.5 184%
Diluted income per
common and common
equivalent share:
Continuing
operations $0.21 $0.11 91% $0.34 $0.18 89%
Discontinued
operations 0.90 0.16 0.93 0.26
Net income $1.11 $0.27 311% $1.27 $0.44 189%
Weighted average common
and common equivalent
shares 453.1 473.9 459.0 466.0
(a) Operating results for the three and six months ended June 30, 1998,
have been restated to present the Company's automotive rental and solid
waste services divisions as discontinued operations.