AutoNation Reports 38 Percent Growth in Q1 Earnings Per Share
27 April 2000
AutoNation Reports 38 Percent Growth in First Quarter Earnings Per Share From Continuing Operations AUTONATION AutoNation Logo. (PR NewsFoto)[PH] FORT LAUDERDALE, FL USA 04/06/1999
Results Exceed Analysts' Expectations;
Company Benefits from Strong New Vehicle Sales, Expense Reduction
FORT LAUDERDALE, Fla., April 27 AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today
reported that for the three months ended March 31, 2000, earnings per share
from continuing operations rose 38 percent to $0.18 per share, or
$64.7 million, from $0.13 per share or $58.4 million last year. The Company
noted that earnings per share from continuing operations exceeded the
analysts' consensus estimate for the quarter by three cents per share.
During the quarter, revenue from continuing operations rose nearly
15 percent to $5.23 billion from $4.56 billion for the same period last year,
while operating income increased more than 24 percent to $115.5 million from
$92.9 million last year.
AutoNation said that the improved operating performance was driven by
strong new vehicle sales at its more than 400 vehicle franchises, cost
reductions at both the corporate and store levels and by acquisitions.
Store performance margins for the three-month period ended March 31, 2000
improved 20 basis points to 3.2 percent or $165.8 million versus 3.0 percent
or $138.9 million in the same period last year. Compared with the pro forma
three-month period ended December 31, 1999, store performance margins in the
first quarter of 2000 improved 50 basis points to 3.2 percent, versus
2.7 percent or $136 million.
"During the first quarter of 2000, AutoNation made significant progress
toward its goal of becoming the industry's low cost provider," said Chief
Executive Officer Michael J. Jackson. Mr. Jackson continued, "We reduced
store-level SG&A expense as a percent of revenue to 9.8 percent, a 60 basis
point improvement versus the same period last year and a 90 basis point
improvement versus the pro forma results for the three months ended
December 31, 1999."
Corporate overhead as a percent of sales decreased to 0.8 percent in the
three-month period ended March 31, 2000, compared with one percent in the same
period last year and 1.2 percent on a pro forma basis in the three-months
ended December 31, 1999.
Mr. Jackson added, "On an annualized basis, we're on target to eliminate
$100 million of overhead this year. This, combined with continued strong
revenue and store performance growth, puts us on track to achieve our full-
year earnings target of 90 cents per share."
Commenting on the Company's position as the largest retailer of
automobiles via the Internet, Mr. Jackson said, "We continue to be encouraged
by the rapid and profitable growth of our Internet-related business.
AutoNation remains on track to achieve its 2000 objective of $1.5 billion in
revenue from vehicle sales through the Internet sales channel."
Pro forma results for the three months ended December 31, 1999, referred
to above, exclude certain charges primarily related to the previously
announced closure of the Company's used vehicle megastores and other
restructuring activities. Results also exclude the Company's automotive rental
operations, which have been reflected as discontinued operations. For the
three months ended March 31, 2000, the Company recorded a loss from
discontinued operations of $2.4 million, net of taxes. Such amount represents
the excess of actual losses incurred during the period of $24.5 million, net
of taxes, over the Company's previously estimated losses. Earnings per share
after discontinued operations were $0.17 per share, or $62.3 million versus
$0.17 per share or $80.1 million last year. AutoNation continues to work on
the previously announced tax-free spin-off of ANC Rental Corporation.
Completion of the spin-off, which is anticipated by the end of the second
quarter, is subject to certain conditions, including obtaining necessary
approvals, completing the necessary debt re-financing for ANC Rental
Corporation and completing the necessary filings with the SEC. The
distribution ratio will be set at the time that AutoNation's Board of
Directors declares record and distribution dates for the planned spin-off.
AutoNation, Inc. is America's largest automotive retailer, with more than
400 new vehicle franchises and $20 billion in annual revenue. Led by
AutoNationDirect.com, the Company is also the largest automotive retailer on
the Internet.
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.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months Ended March 31,
2000 1999
(a)
Revenue:
New vehicle $ 3,219.6 61.5 $ 2,548.9 55.9
Used vehicle 1,047.9 20.0 1,122.9 24.6
Fixed operations 587.9 11.3 508.7 11.1
Other 374.8 7.2 382.2 8.4
5,230.2 100.0 4,562.7 100.0
Cost of operations 4,553.1 87.0 3,952.5 86.6
Gross margin 677.1 13.0 610.2 13.4
Store selling,
general and
administrative
expenses 511.3 9.8 471.3 10.4
Store performance 165.8 3.2 138.9 3.0
Corporate overhead 39.5 0.8 46.0 1.0
Property carrying costs 10.8 0.2 -- --
Operating income 115.5 2.2 92.9 2.0
Net interest expense (8.2) (3.3)
Other income (expense) (3.8) 1.7
Income from continuing
operations before
income taxes 103.5 91.3
Provision for
income taxes 38.8 32.9
Income from
continuing operations 64.7 58.4
Income (loss) from
discontinued operations,
net of income taxes
and minority interest (2.4) 21.7
Net income $ 62.3 $ 80.1
Diluted income per
common and common
equivalent share:
Continuing
operations $0.18 $0.13
Discontinued
operations (0.01) 0.04
Net income $0.17 $0.17
Weighted average
common and common
equivalent shares 367.5 465.0
Common shares
outstanding 361.1 449.6
(a) Operating results for the three months ended March 31, 1999, have been
restated to present the Company's automotive rental division as
discontinued operations.
AUTONATION, INC.
UNAUDITED SAME STORE OPERATING DATA
(In millions)
Three Months Ended March 31,
2000 1999 % Change
Revenue:
New vehicle $ 2,467.6 $ 2,191.1 12.6
Used vehicle 753.1 769.2 (2.1)
Fixed operations 437.5 413.8 5.7
Other 278.0 299.3 (7.1)
$ 3,936.2 $ 3,673.4 7.2
Gross Margin $ 502.6 $ 478.5 5.0
% 12.8% 13.0% (0.2)
S,G&A $ 366.8 $ 354.6 3.4
% 9.3% 9.6% (0.3)
Store performance $ 135.8 $ 123.9 9.6
% 3.5% 3.4% 0.1