AutoNation, Inc. Reports Pro Forma Earnings Of $0.10 Per Share
27 January 2000
AutoNation, Inc. Reports Pro Forma Earnings Of $0.10 Per Share From Continuing Operations For The 1999 Fourth Quarter And $0.66 Per Share For The Full Year, In Line With Revised Estimates
FORT LAUDERDALE, Fla., Jan. 26 -- AutoNation, Inc.
today reported pro forma income from continuing operations of $40.6 million,
or $0.10 per share for the three months ended December 31, 1999, in line with
analysts' revised consensus estimates, versus $62.6 million or $0.13 per
share for the same period in 1998. For the year ended December 31, 1999, pro
forma income from continuing operations was $288.7 million, or $0.66 per share
versus $225.8 million, or $0.48 per share for the same period in 1998. Pro
forma income from continuing operations excludes certain 1999 fourth quarter
charges described below.
During the three months ended December 31, 1999, AutoNation recorded pre-
tax charges totaling $478.5 million related to the Company's previously
announced closure of its used vehicle megastores, corporate workforce
reductions and other restructuring activities. As a result of these charges,
the Company recorded a loss from continuing operations of $279.6 million, or
$(0.71) per share for the three months ended December 31, 1999 and a loss from
continuing operations of $31.5 million, or $(0.07) per share for the year
ended December 31, 1999. The fourth quarter charge is in line with previously
announced estimates.
Revenue for the three months ended December 31, 1999, rose 38% to $5.0
billion from $3.6 billion during the same period last year. Revenue for the
year ended December 31, 1999 increased 59% to $20.1 billion versus $12.7
billion last year.
Pro forma operating income for the three months ended December 31, 1999
was $73.9 million versus $95.8 million for the same period last year. Pro
forma operating income for the year ended December 31, 1999 was $463.1 million
versus $356.3 million last year.
Commenting on the Company's performance during the quarter, Michael J.
Jackson, Chief Executive Officer of AutoNation, Inc. said, "The operating
results for the quarter are in line with our previously announced estimates
and with analysts' revised expectations. The operating results reflect higher
overhead, poor megastore performance and a generally soft used vehicle market.
As a result of the megastore closures, headcount reductions and other cost
cutting initiatives, we are now on track to improving profitability and to
becoming the industry's low cost provider."
Commenting on the Company's position as the leading vehicle retailer on
the Internet, Mr. Jackson added, "We closed the year with over $1 billion in
vehicle sales via the Internet. During the fourth quarter, we sold close to
15,000 units via the Internet bringing our year-to-date Internet total to over
46,000 units. We are excited about our e-Commerce opportunities and expect to
generate over $1.5 billion in vehicle sales via the Internet in 2000."
ANC RENTAL SPINOFF
The Company also announced that it continues to work on the previously
announced tax-free spin-off of ANC Rental Corporation. The Company will
provide further details regarding the timing of the proposed spin-off in late
February.
Due to the planned separation, the Company's automotive rental operations
have been reflected as discontinued operations. The Company recorded a loss
from discontinued operations, net of taxes, for the three months ended
December 31, 1999 of $123.5 million, or $(0.31) per share. Included in this
amount are estimated automotive rental results through the distribution date
and costs associated with the spin-off. The Company recorded income from
discontinued operations, net of taxes, for the year ended December 31, 1999 of
$314.4 million, or $0.73 per share, including the results of operations and
gain on disposition of Republic Services, Inc., the Company's former waste
subsidiary.
AutoNation, Inc. is the world's largest automotive retailer, with 409
franchises in 19 states and more than 350 websites.
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.
AUTONATION, INC.
PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998
% % % %
Revenue:
New
ve-
hicle $3,040.7 60.6 $2,060.2 56.6 $11,703.5 58.2 $6,879.1 54.3
Used
vehicle 1,052.3 21.0 853.3 23.4 4,631.0 23.0 3,326.3 26.3
Fixed
opera-
tions 579.8 11.5 421.2 11.6 2,222.0 11.1 1,383.2 10.9
Other 347.0 6.9 305.9 8.4 1,555.3 7.7 1,076.0 8.5
5,019.8 100.0 3,640.6 100.0 20,111.8 100.0 12,664.6 100.0
Cost of
opera-
tions 4,347.3 86.6 3,139.3 86.2 17,372.3 86.4 10,909.6 86.2
Gross
margin 672.5 13.4 501.3 13.8 2,739.5 13.6 1,755.0 13.8
Store
selling,
general
and
adminis-
trative
expenses 536.5 10.7 379.9 10.5 2,073.7 10.3 1,304.4 10.3
Store
perfor-
mance 136.0 2.7 121.4 3.3 665.8 3.3 450.6 3.5
Corporate
overhead 62.1 1.2 25.6 0.7 202.7 1.0 94.3 0.7
Operating
income 73.9 1.5 95.8 2.6 463.1 2.3 356.3 2.8
Net interest
income
(expense) (8.0) 0.2 (14.3) (5.2)
Other income
(expense) (2.6) 1.7 2.2 1.5
Income from
continuing
operations
before income
taxes 63.3 97.7 451.0 352.6
Provision
for income
taxes 22.7 35.1 162.3 126.8
Income from
continuing
opera-
tions $40.6 $62.6 $288.7 $225.8
Diluted
income
from
con-
tinuing
operat-
ions
per
common
and
common
equivalent
share $0.10 $0.13 $0.66 $0.48
Weighted
average
common
and
common
equivalent
shares 395.2 472.6 435.6 470.9
Note:
These pro forma unaudited condensed consolidated financial statements
exclude 1999 fourth quarter pre-tax charges totaling $478.5 million related
primarily to the closure of the used vehicle megastores and corporate
workforce reductions. These pro forma unaudited condensed consolidated
financial statements also exclude the operating results of the automotive
rental segment and the former solid waste segment which are accounted for as
discontinued operations.
AUTONATION, INC.
UNAUDITED SAME STORE OPERATING DATA
(In millions)
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 % 1999 1998 %
Chge Chge
Revenue:
New vehicle $2,102.8 $1,874.5 12.2 $7,349.7 $6,426.5 14.4
Used vehicle 701.4 703.1 (0.2) 2,921.0 2,990.4 (2.3)
Fixed operations 403.5 380.3 6.1 1,372.2 1,288.1 6.5
Other 238.0 259.5 (8.3) 922.1 969.3 (4.9)
$ 3,445.7 $3,217.4 7.1 $12,565.0 $11,674.3 7.6
Gross Margin $452.3 $436.0 3.7 $1,654.9 $1,577.4 4.9
% 13.1% 13.6% (0.5) 13.2% 13.5% (0.3)
S,G&A $360.1 $333.7 7.9 $1,268.9 $1,205.6 5.3
% 10.4% 10.4% --- 10.1% 10.3% (0.2)
Store Perfor-
mance $92.2 $102.3 (9.9) $ 386.0 $371.8 3.8
% 2.7% 3.2% (0.5) 3.1% 3.2% (0.1)
AUTONATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998
(a) (a)
Revenue:
New vehicle $3,040.7 $2,060.2 $11,703.5 $6,879.1
Used vehicle 1,052.3 853.3 4,631.0 3,326.3
Fixed operations 579.8 421.2 2,222.0 1,383.2
Other 347.0 305.9 1,555.3 1,076.0
5,019.8 3,640.6 20,111.8 12,664.6
Cost of operations 4,374.6 3,139.3 17,399.6 10,909.6
Gross margin 645.2 501.3 2,712.2 1,755.0
Selling, general and
administrative expenses 659.6 405.5 2,337.4 1,398.7
Asset impairment charge 390.2 --- 390.2 ---
Operating income (loss) (404.6) 95.8 (15.4) 356.3
Net interest
income (expense) (8.0) 0.2 (14.3) (5.2)
Other income (expense) (2.6) 1.7 2.2 1.5
Income (loss) from
continuing operations
before income taxes (415.2) 97.7 (27.5) 352.6
Provision (benefit)
for income taxes (135.6) 35.1 4.0 126.8
Income (loss) from
continuing operations (279.6) 62.6 (31.5) 225.8
Discontinued operations:
Income (loss) from
discontinued operations,
net of income taxes
and minority interest (95.6) 41.1 (30.6) 262.1
Gain (loss) on disposal
of segment, net of
income taxes (27.9) 11.6 345.0 11.6
(123.5) 52.7 314.4 273.7
Net income (loss) $(403.1) $115.3 $ 282.9 $499.5
Diluted income (loss)
per common and common
equivalent share:
Continuing operations $(0.71) $0.13 $ (0.07) $ 0.48
Discontinued operations (0.31) 0.11 0.73 0.58
Net income (loss) $(1.02) $0.24 $0.66 $ 1.06
Weighted average
common and common
equivalent shares 394.9 472.6 429.8 470.9
(a) Operating results for the three and twelve months ended December 31,
1998 have been restated to present the Company's automotive rental and solid
waste services divisions as discontinued operations.