AutoNation Reports 29% Increase In Q2 Earnings Per Share
27 July 2000
Expense Reductions On Track; ANC Rental Spin Off Complete
FORT LAUDERDALE, Fla. - AutoNation, Inc., America's largest automotive
retailer, today reported that for the three months ended June 30, 2000, earnings
per share from continuing operations increased 29 percent to $0.27 per
share, or $96.6 million, from $0.21 per share, or $97.1 million last year.
The Company said that its results in the quarter benefited from continued strong
new vehicle sales, improved operating efficiencies, reductions in corporate
overhead and the Company's share repurchase program.
During the quarter, revenue from continuing operations rose five percent
to $5.34 billion from $5.07 billion in the same period last year. Operating
income before property carrying costs associated with closed operations
increased four percent to $161.5 million this year versus $154.9 million in
the same quarter last year. AutoNation said its improved operating performance
was driven by reductions in selling, general and administrative expenses,
offset by gross margin compression.
During the second quarter, AutoNation's selling, general and administrative
expenses declined 60 basis points to 9.6% of sales this year versus 10.2% in the
same period last year. At the same time, corporate overhead declined 10 basis
points to 0.6% of sales this year versus 0.7% last year. The Company said
these improvements reflect the benefit of its ongoing efforts to eliminate
expense from its corporate and field operations. The results for the quarter
include a pre-tax non-operating gain on the sale of certain marketable securities
totaling $9.9 million or $0.02 per share after taxes.
For the six-month-period ended June 30, 2000, earnings per share from
continuing operations grew 29% to $0.44 per share, or $161.3 million versus
$0.34 per share, or $155.5 million last year while revenue increased 10% to
$10.6 billion this year, compared with $9.6 billion in the same period last
year.
Discussing AutoNation's performance in the second quarter, Chief
Executive Officer Michael J. Jackson said, "We're pleased with our results in
the quarter and we're encouraged that our cost reduction initiatives continue
to have an impact." Mr. Jackson also noted that during the second quarter,
AutoNation completed the spin-off of ANC Rental Corporation in the form of a
tax-free dividend of shares to AutoNation stockholders. "With the spin-off
complete, AutoNation is focused solely on automotive retailing, where we will
build shareholder value by leveraging our scale to improve margins," Mr.
Jackson said.
The Company also reported income from its discontinued automotive rental
operations of $4.2 million for the quarter and $1.8 million for the six-month
period ended June 30, 2000. These amounts include ANC Rental Corporation's
reported results, less costs incurred related to the spin-off which was
completed on June 30, 2000. Earnings per share after discontinued operations
were $0.28 per share, or $100.8 million, for the quarter and $0.45 per share,
or $163.1 million for the six-month period ended June 30, 2000.
AutoNation, Inc., headquartered in Fort Lauderdale, Florida, is America's
largest automotive retailer, on and off the web. The Company was ranked #63 on
the Fortune 500 in the year 2000, and was ranked #3 among Specialty Retailers
on the Fortune Global 500 in the year 2000.
AUTONATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months Ended June 30,
2000 1999
% %
Revenue:
New vehicle $3,308.2 62.0 $2,906.3 57.3
Used vehicle 1,053.6 19.7 1,235.3 24.4
Fixed operations 588.8 11.0 549.6 10.8
Other 388.9 7.3 378.4 7.5
5,339.5 100.0 5,069.6 100.0
Cost of operations 4,633.6 86.8 4,362.8 86.0
Gross margin 705.9 13.2 706.8 14.0
Store selling, general
and administrative
expenses 512.7 9.6 514.3 10.2
Store performance 193.2 3.6 192.5 3.8
Corporate overhead 31.7 0.6 37.6 0.7
Operating income
before property
carrying costs 161.5 3.0 154.9 3.1
Property carrying
costs 9.1 0.1 --- ---
Operating income 152.4 2.9 154.9 3.1
Net interest expense (5.5) (4.6)
Other income 7.6 1.4
Income from continuing
operations before
income taxes 154.5 151.7
Provision for
income taxes 57.9 54.6
Income from continuing
operations 96.6 97.1
Income from discontinued
operations, net of income
taxes and minority
interest 4.2 404.1
Net income $100.8 $ 501.2
Diluted income per
common and
common equivalent share:
Continuing operations $0.27 $0.21
Discontinued operations 0.01 0.90
Net income $0.28 $1.11
Weighted average common
and common
equivalent shares 361.3 453.1
Common shares
outstanding 361.1 437.4
Six Months Ended June 30,
2000 1999
% %
Revenue:
New vehicle $6,527.8 61.8 $5,455.2 56.6
Used vehicle 2,101.5 19.9 2,358.2 24.5
Fixed operations 1,176.7 11.1 1,058.3 11.0
Other 763.7 7.2 760.6 7.9
10,569.7 100.0 9,632.3 100.0
Cost of operations 9,186.7 86.9 8,315.3 86.3
Gross margin 1,383.0 13.1 1,317.0 13.7
Store selling, general
and administrative
expenses 1,024.0 9.7 985.6 10.3
Store performance 359.0 3.4 331.4 3.4
Corporate overhead 71.2 0.7 83.6 0.8
Operating income before
property carrying costs 287.8 2.7 247.8 2.6
Property carrying costs 19.9 0.2 --- ---
Operating income 267.9 2.5 247.8 2.6
Net interest expense (13.7) (7.9)
Other income 3.8 3.1
Income from continuing
operations before
income taxes 258.0 243.0
Provision for
income taxes 96.7 87.5
Income from continuing
operations 161.3 155.5
Income from discontinued
operations, net of
income taxes and
minority interest 1.8 425.8
Net income $163.1 $581.3
Diluted income per common
and common equivalent share:
Continuing operations $0.44 $ 0.34
Discontinued operations 0.01 0.93
Net income $0.45 $ 1.27
Weighted average common
and common equivalent
shares 364.4 459.0
Common shares
outstanding 361.1 437.4
AUTONATION, INC.
UNAUDITED SAME STORE OPERATING DATA
(In millions)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 % Change 2000 1999 % Change
Revenue:
New vehicle $2,720.2 $2,588.0 5.1 $5,092.3 $4,672.3 9.0
Used vehicle 839.7 878.1 (4.4) 1,561.1 1,610.7 (3.1)
Fixed operations 473.6 458.0 3.4 892.3 851.4 4.8
Other 302.3 302.9 (0.2) 568.5 587.5 (3.2)
$4,335.8 $4,227.0 2.6 $8,114.2 $7,721.9 5.1
Gross Margin $574.3 $577.3 (0.5) $1,058.5 $1,033.5 2.4
% 13.2% 13.6% (0.4) 13.0% 13.4% (0.4)
S,G&A $407.6 $410.4 (0.7) $757.4 $746.4 1.5
% 9.4% 9.7% (0.3) 9.3% 9.7% (0.4)
Store
performance $166.7 $166.9 (0.1) $301.1 $287.1 4.9
% 3.8% 3.9% (0.1) 3.7% 3.7% --