Group 1 Posts Double-Digit Gains In Revenues, Earnings For 1999 Q4
17 February 2000
Group 1 Posts Double-Digit Gains In Revenues, Earnings For 1999 Fourth Quarter, Full Year
Highlights:
-- Q4 diluted EPS up 21% to $0.35; 1999 diluted EPS $1.55, a 34% increase
-- Net income up 40% for Q4, 62% for year
-- Full-year revenues top $2.5 billion
-- Gross and operating margins continue to expand
Summary Results of Operations (Unaudited)
(In millions, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998
Revenues $691.8 $472.5 $2,508.3 $1,630.1
Gross profit $101.4 $69.2 $376.4 $236.5
Income from operations $21.9 $14.4 $86.0 $52.0
Net income $7.7 $5.5 $33.5 $20.7
Diluted earnings per share $0.35 $0.29 $1.55 $1.16
HOUSTON, Feb. 17 -- Group 1 Automotive, Inc. , a
leading operator in the highly fragmented automotive retailing industry, today
reported double-digit gains in revenues, operating income and net income for
the fourth quarter and year ended December 31, 1999. Revenue growth in all
categories and continued improvement in operating margins drove the company's
strong performance.
Enhanced Margins, Strong New Vehicle Market, Acquisitions Boost Earnings
For the fourth quarter ended December 31, 1999, revenues grew 46 percent
to $691.8 million from $472.5 million for the same period last year. Net
income increased 40 percent to $7.7 million from $5.5 million, while earnings
per diluted share grew 21 percent to $0.35 from $0.29 a year ago. Cash flow
per share (net income plus depreciation and amortization) increased to
$0.49 from $0.40 in the 1998 period. The increases in earnings and cash flow
per share were achieved despite being calculated on 22.2 million shares
compared with 19.0 million shares last year, a 17 percent higher number of
shares outstanding.
Gross margin for the quarter was 14.7 percent compared with 14.6 percent
during the year-ago period. Income from operations rose to $21.9 million from
$14.4 million, a 52 percent increase, resulting in the operating margin
expanding to 3.2 percent from 3.0 percent in last year's period. Group 1 has
achieved year-over-year improvements in operating margin since going public.
"I am pleased to announce another exceptionally strong quarter," said B.B.
Hollingsworth Jr., Group 1's chairman, president and chief executive officer.
"Our dealerships, including those acquired during the year, turned in solid
performances. We benefited from a record-setting new vehicle market and
synergy from the successful execution of our acquisition and operating
strategies."
Hollingsworth noted that strong vehicle sales for the quarter were driven
by modest new vehicle price increases, innovative new products and continued
high consumer confidence.
1999 Earnings Growth Outpaces Revenue Increase
For the year, revenues increased 54 percent to $2.5 billion from
$1.6 billion in 1998. Net income increased 62 percent to $33.5 million, or
$1.55 per diluted share, compared with $20.7 million, or $1.16 per diluted
share. Cash flow per share was $2.05 compared with $1.52. Per-share amounts
for the 1999 period were calculated on 21.6 million shares compared with
17.9 million shares last year.
Gross margin for 1999 was 15.0 percent compared with 14.5 percent a year
ago. Income from operations rose 65 percent to $86.0 million from
$52.0 million. The operating margin expanded to 3.4 percent from 3.2 percent
last year.
"We are very proud of our achievements," Hollingsworth noted. "Our
operating leverage has been significant and demonstrates that we have been
successful in integrating our acquisitions. We have proven that select
acquisitions executed under a disciplined strategy can produce earnings
growth."
Recent Acquisitions Expected to Contribute to 2000 Results
Group 1 recently announced that it had completed six acquisitions,
including platforms in three new markets. Hollingsworth confirmed that the
company would continue to seek acquisitions that enhance brand and geographic
diversity, as well as provide synergy and add value. According to
Hollingsworth, Group 1's target is to acquire approximately $600 million in
revenues during 2000. The company has already completed transactions with
$290 million in revenues during 2000.
Group 1 is a leading operator in the highly fragmented $600 billion
automotive retailing industry. The company has an annualized revenue run rate
of over $3.4 billion, and owns 98 dealership franchises comprised of 30
different brands, and 19 collision service centers located in Texas, Oklahoma,
Florida, New Mexico, Colorado, Georgia, Louisiana and Massachusetts. Through
its dealerships and Internet sites, the company sells new and used cars and
light trucks, provides maintenance and repair services, sells replacement
parts and arranges related financing, vehicle service and insurance contracts.
This press release contains certain forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934,
which are subject to known and unknown risks, uncertainties or other factors
not under Group 1's control that may cause the actual results, performance or
achievements of Group 1 to be materially different from the results,
performance or other expectations implied by these forward-looking statements.
Some of these risks, uncertainties and other factors include those disclosed
in Group 1's filings with the Securities and Exchange Commission.
For additional information regarding Group 1 Automotive free of charge via
fax, dial 1-800-PRO-INFO and use the company's stock symbol, "GPI."
Group 1 Automotive, Inc. can be reached on the Internet at http://www.group1auto.com
Group 1 Automotive, Inc.
Statements of Operations
(Unaudited)
(In thousands of dollars, except share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998
REVENUES:
New vehicles $414,988 $268,883 $1,465,759 $931,205
Used vehicles 196,409 147,097 750,807 510,192
Parts & service 59,510 41,879 212,970 139,144
Other dealership
revenue, net 20,877 14,683 78,788 49,516
Total revenues 691,784 472,542 2,508,324 1,630,057
COST OF SALES:
New vehicles 380,891 247,191 1,344,120 857,109
Used vehicles 182,644 136,730 691,499 471,910
Parts & service 26,837 19,448 96,348 64,528
Total cost
of sales 590,372 403,369 2,131,967 1,393,547
Gross Profit 101,412 69,173 376,357 236,510
SELLING, GENERAL
AND ADMINISTRATIVE
EXPENSES 76,334 52,756 279,791 178,038
DEPRECIATION EXPENSE 1,456 1,133 4,853 3,783
AMORTIZATION EXPENSE 1,735 918 5,763 2,643
Income from operations 21,887 14,366 85,950 52,046
OTHER INCOME (EXPENSE):
Floorplan interest
expense (6,772) (3,842) (20,395) (12,837)
Other interest
expense, net (2,347) (1,322) (10,052) (4,027)
Other income
(expense), net (23) 46 186 39
INCOME BEFORE
INCOME TAXES 12,745 9,248 55,689 35,221
PROVISION FOR
INCOME TAXES 5,082 3,779 22,174 14,502
NET INCOME $7,663 $5,469 $33,515 $20,719
Basic earnings per share $0.36 $0.30 $1.62 $1.20
Diluted earnings
per share $0.35 $0.29 $1.55 $1.16
Diluted cash flow
per share $0.49 $0.40 $2.05 $1.52
Weighted average shares
outstanding:
Basic 21,574,440 18,242,118 20,683,308 17,281,165
Diluted 22,150,246 18,992,225 21,558,920 17,904,878
OTHER DATA:
Gross margin 14.7% 14.6% 15.0% 14.5%
Operating margin 3.2% 3.0% 3.4% 3.2%
Pretax income margin 1.8% 2.0% 2.2% 2.2%
Retail new
vehicles sold 16,755 11,182 60,384 39,822
Retail used
vehicles sold 11,504 8,817 45,630 31,248
Total retail sales 28,259 19,999 106,014 71,070
GROUP 1 AUTOMOTIVE, INC.
Condensed Consolidated Balance Sheets
(In thousands)
Dec. 31, Dec. 31,
1999 1998
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $118,824 $66,443
Inventories, net 386,255 219,176
Other assets, net 48,344 41,303
Total current assets 553,423 326,922
Property and equipment, net 46,711 21,960
Goodwill, net 235,312 123,587
Other assets 7,464 5,241
Total assets $842,910 $477,710
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Floorplan notes payable $363,489 $193,405
Other interest-bearing liabilities 1,076 2,966
Accounts payable and accrued expenses 108,730 82,300
Total current liabilities 473,295 278,671
Debt 113,174 42,821
Other liabilities 24,412 20,034
Total stockholders' equity 232,029 136,184
Total liabilities and stockholders' equity $842,910 $477,710
OTHER DATA:
Working capital $80,128 $48,251
Current ratio 1.17 1.17
Long-term debt to capitalization 33% 25%