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AutoNation Reports 2008 First Quarter Results of Operations
FORT LAUDERDALE, Fla., April 24, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported 2008 first quarter net income from continuing operations of $56 million or $0.31 per share, compared to year-ago net income from continuing operations of $83 million or $0.39 per share. Results for the first quarter of 2008 reflected a decline in vehicle retail sales, especially in AutoNation's key markets in California, Florida, Nevada and Arizona where the housing crisis has significantly impacted the automotive retail business. First quarter 2008 results also were impacted by lower gross profit per new and used vehicle sold, partially offset by continued share repurchases. Prior year results benefited from favorable tax adjustments of $0.02 per share.

First quarter 2008 revenue totaled $4.0 billion, compared to $4.3 billion in the year-ago period, driven primarily by lower vehicle sales. In the first quarter, industry new vehicle U.S. retail sales declined approximately 11%, according to CNW Research. AutoNation new vehicle unit sales declined 8%. Industry new vehicle retail sales for California, Florida, Nevada and Arizona were off approximately 15% compared to last year, based on CNW Research data. AutoNation's decline for new vehicle unit sales in those markets was 11%. Together, California, Florida, Nevada and Arizona represent approximately 60% of the Company's new vehicle business and approximately 25% of the industry retail new vehicles sold in the U.S.

Commenting on the first quarter, Mike Jackson, Chairman and Chief Executive Officer, said, "In the first quarter we continued to experience a challenging economic environment for new vehicle sales, particularly in our key markets of California, Florida, Nevada and Arizona where the housing crisis has clearly impacted overall economic activity and consumer demand for new vehicles." Mr. Jackson also noted, "We expect to continue to see a challenging automotive retail market as long as the current economic difficulties persist. However, AutoNation continues to have confidence in the long-term health of California, Florida, Nevada and Arizona."

The first quarter conference call may be accessed at 11:00 a.m. Eastern Time today by phone at 888-769-8515 or via the Internet (audio webcast) at http://www.AutoNation.com by clicking on the "About Us" link then clicking on "Investors" and then "Webcasts." A playback of the conference call will be available after 2:30 p.m. Eastern Time April 24, 2008 through May 1, 2008 by calling 800-463-4964.

About AutoNation, Inc.

AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's largest automotive retailer. AutoNation owns and operates 321 new vehicle franchises in 15 states. For additional information, please visit http://corp.AutoNation.com or www.AutoNation.com, where more than 80,000 vehicles are available for sale along with AutoNation's E-Vehicle program.

FORWARD LOOKING STATEMENTS

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, estimates and expectations is contained in the Company's SEC filings. The Company undertakes no duty to update its forward-looking statements, including its long-term growth targets.

NON-GAAP FINANCIAL MEASURES

The attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as net income and diluted earnings per share from continuing operations, adjusted to exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company's disclosure, provides a meaningful presentation of the Company's results from its core business operations excluding the impact of items not related to the Company's ongoing core business operations, and improves the period-to-period comparability of the Company's results from its core business operations.



                                AUTONATION, INC.
                UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS
                      ($ in millions, except per share data)

                                                  Three Months Ended March 31,
                                                    2008               2007

         Revenue:
            New vehicle                           $2,198.8           $2,423.5
            Used vehicle                             983.4            1,068.3
            Parts and service                        654.6              644.7
            Finance and insurance, net               145.0              146.3
            Other                                     17.6               17.1
         Total revenue                             3,999.4            4,299.9

         Cost of sales:
            New vehicle                            2,052.8            2,246.6
            Used vehicle                             899.3              965.5
            Parts and service                        370.6              363.3
            Other                                      7.5                6.7
         Total cost of sales                       3,330.2            3,582.1

         Gross profit                                669.2              717.8

         Selling, general and
          administrative expenses                    498.3              511.2
         Depreciation and amortization                23.5               20.9
         Other expenses (income), net                  0.3                -

         Operating income                            147.1              185.7

         Floorplan interest expense                  (25.3)             (31.7)
         Other interest expense                      (26.8)             (26.4)
         Interest income                               0.5                0.9
         Other gains (losses), net                    (1.8)               0.1

         Income from continuing
          operations before income taxes              93.7              128.6

         Provision for income taxes                   38.0               46.1

         Net income from continuing
          operations                                  55.7               82.5

         Loss from discontinued
          operations, net of income
          taxes                                       (5.0)              (4.9)


         Net income                                  $50.7              $77.6


         Diluted earnings (loss) per share:
            Continuing operations                    $0.31              $0.39
            Discontinued operations                 $(0.03)            $(0.02)

            Net income                               $0.28              $0.37


         Weighted average common shares
          outstanding                                180.6              210.7

         Common shares outstanding, net
          of treasury stock, at March 31             178.5              209.7



                                 AUTONATION, INC.
                           UNAUDITED SUPPLEMENTARY DATA
                     ($ in millions, except per vehicle data)

                Operating Highlights          Three Months Ended March 31,
                                                                  $       %
                                             2008      2007  Variance Variance

          Revenue:
            New vehicle                    $2,198.8  $2,423.5  $(224.7)  (9.3)
              Retail used vehicle             816.7     862.2    (45.5)  (5.3)
              Wholesale                       166.7     206.1    (39.4) (19.1)
            Used vehicle                      983.4   1,068.3    (84.9)  (7.9)
            Parts and service                 654.6     644.7      9.9    1.5
            Finance and insurance, net        145.0     146.3     (1.3)  (0.9)
            Other                              17.6      17.1      0.5
          Total revenue                    $3,999.4  $4,299.9  $(300.5)  (7.0)

          Gross profit:
            New vehicle                      $146.0    $176.9   $(30.9) (17.5)
              Retail used vehicle              84.5     100.0    (15.5) (15.5)
              Wholesale                        (0.4)      2.8     (3.2)
            Used vehicle                       84.1     102.8    (18.7) (18.2)
            Parts and service                 284.0     281.4      2.6    0.9
            Finance and insurance             145.0     146.3     (1.3)  (0.9)
            Other                              10.1      10.4     (0.3)
          Total gross profit                  669.2     717.8    (48.6)  (6.8)

          Selling, general and
           administrative expenses            498.3     511.2     12.9    2.5

          Depreciation and amortization        23.5      20.9     (2.6)
          Other expenses (income), net          0.3       -       (0.3)

           Operating income                   147.1     185.7    (38.6) (20.8)

          Floorplan interest expense          (25.3)    (31.7)     6.4
          Other interest expense              (26.8)    (26.4)    (0.4)
          Interest income                       0.5       0.9     (0.4)
          Other gains (losses), net            (1.8)      0.1     (1.9)
            Income from continuing
             operations before income
             taxes                            $93.7    $128.6   $(34.9) (27.1)

          Retail vehicle unit sales:
               New                           71,673    78,114   (6,441)  (8.2)
               Used                          50,863    52,889   (2,026)  (3.8)
                                            122,536   131,003   (8,467)  (6.5)

          Revenue per vehicle retailed:
               New                          $30,678   $31,025    $(347)  (1.1)
               Used                         $16,057   $16,302    $(245)  (1.5)

          Gross profit per vehicle
           retailed:
               New                           $2,037    $2,265    $(228) (10.1)
               Used                          $1,661    $1,891    $(230) (12.2)
               Finance and insurance         $1,183    $1,117      $66    5.9



                Operating Percentages             Three Months Ended March 31,
                                                     % 2008           % 2007

            Revenue mix percentages:
               New vehicle                            55.0              56.4
               Used vehicle                           24.6              24.8
               Parts and service                      16.4              15.0
               Finance and insurance, net              3.6               3.4
               Other                                   0.4               0.4
                                                     100.0             100.0

            Gross profit mix percentages:
               New vehicle                            21.8              24.6
               Used vehicle                           12.6              14.3
               Parts and service                      42.4              39.2
               Finance and insurance                  21.7              20.4
               Other                                   1.5               1.5
                                                     100.0             100.0

            Operating items as a
             percentage of revenue:
               Gross profit:
                  New vehicle                          6.6               7.3
                  Used vehicle - retail               10.3              11.6
                  Parts and service                   43.4              43.6
                  Total                               16.7              16.7
               Selling, general and
                administrative expenses               12.5              11.9
               Operating income                        3.7               4.3

            Operating items as a
             percentage of total gross
             profit:
               Selling, general and
                administrative expenses               74.5              71.2
               Operating income                       22.0              25.9



                                AUTONATION, INC.
                     UNAUDITED SUPPLEMENTARY DATA, Continued
                     ($ in millions, except per share data)

            Capital Expenditures / Stock
                    Repurchases                   Three Months Ended March 31,
                                                     2008              2007

            Capital expenditures                     $23.5             $42.3
            Acquisitions                             $29.4              $-
            Proceeds from exercises of
             stock options                            $1.0             $76.1
            Stock repurchases:
              Aggregate purchase price               $27.8             $50.3
              Shares repurchased (in
               millions)                               1.9               2.3



               Floorplan Assistance and
                Expense                          Three Months Ended March 31,
                                                2008        2007      Variance

           Floorplan assistance earned
            (included in cost of sales)         $21.0       $24.1       $(3.1)
           Floorplan interest expense           (25.3)      (31.7)        6.4

             Net inventory carrying cost        $(4.3)      $(7.6)       $3.3



      Balance Sheet and Other Highlights

                                      March 31,    December 31,    March 31,
                                        2008           2007          2007

         Cash and cash equivalents       $34.4           $33.0        $44.1
         Inventory                    $2,377.1        $2,285.6     $2,191.8
         Total floorplan notes
          payable                     $2,200.3        $2,143.7     $1,990.8
         Non-vehicle debt             $1,698.6        $1,775.8     $1,374.5
         Equity                       $3,501.0        $3,473.5     $3,830.7

         New days supply (industry
          standard of selling
          days, including fleet)       57 days         52 days      52 days

         Used days supply (trailing
          30 days)                     40 days         44 days      38 days



    Brand Mix - New Vehicle Revenue %

                                                  Three Months Ended March 31,
                                                       % 2008        % 2007
    Detroit 3:
      Ford, Lincoln-Mercury                              13.8          14.7
      Chevrolet, Pontiac, Buick, Cadillac, GMC           13.0          13.8
      Chrysler, Jeep, Dodge                               6.2           6.6
       Detroit 3 total                                   33.0          35.1

    Import Premium Luxury:
      Mercedes                                           11.9          12.2
      BMW                                                 6.4           6.1
      Lexus                                               4.1           4.0
      Other premium luxury (Land Rover, Porsche)          2.8           3.0
       Premium Luxury total                              25.2          25.3

    Volume Imports:
      Honda                                               9.6           9.1
      Toyota                                             16.2          14.8
      Nissan                                             10.0           9.7
      Other imports                                       6.0           6.0
       Import total                                      41.8          39.6

                                                        100.0         100.0



                               AUTONATION, INC.
                     UNAUDITED SUPPLEMENTARY DATA, Continued
                      ($ in millions, except per share data)

         Comparable Basis Reconciliations*
                                              Three Months Ended March 31,
                                                              Diluted Earnings
                                               Net Income         Per Share
                                             2008     2007     2008      2007

         As reported                        $50.7    $77.6    $0.28     $0.37
          Discontinued operations, net of
           income taxes                       5.0      4.9    $0.03     $0.02
         From continuing operations, as
          reported                           55.7     82.5    $0.31     $0.39
           Income tax adjustments             -       (5.1)    $-      $(0.02)

         Adjusted                           $55.7    $77.4    $0.31     $0.37


         * Please refer to the "Non-GAAP Financial Measures" section of the
           Press Release.



    Business Assumptions Impacting Long-term Average EPS Growth Target of 10%
    to 12% Per Year:

       U.S. light vehicle annual unit
        sales                           assumes recovery in key markets

       Continued opportunistic          share repurchase, capital expenditures
        redeployment of cash flow        and acquisitions

       Targeted return on incremental
        invested capital                approximately 15% after-tax



                                    AUTONATION, INC.
                                UNAUDITED SAME STORE DATA
                        ($ in millions, except per vehicle data)

                 Operating Highlights         Three Months Ended March 31,
                                                                  $       %
                                             2008      2007  Variance Variance

           Revenue:
               New vehicle                 $2,188.2  $2,423.5  $(235.3)  (9.7)
                 Retail used vehicle          811.7     862.2    (50.5)  (5.9)
                 Wholesale                    165.1     205.5    (40.4) (19.7)
               Used vehicle                   976.8   1,067.7    (90.9)  (8.5)
               Parts and service              649.9     644.7      5.2    0.8
               Finance and insurance, net     144.4     146.3     (1.9)  (1.3)
               Other                            6.5       7.0     (0.5)  (7.1)
           Total revenue                   $3,965.8  $4,289.2  $(323.4)  (7.5)


           Gross profit:
               New vehicle                   $145.1    $176.8   $(31.7) (17.9)
                 Retail used vehicle           83.9     100.0    (16.1) (16.1)
                 Wholesale                     (0.8)      2.3     (3.1)
               Used vehicle                    83.1     102.3    (19.2) (18.8)
               Parts and service              281.4     280.8      0.6    0.2
               Finance and insurance          144.4     146.3     (1.9)  (1.3)
               Other                            6.4       6.7     (0.3)
           Total gross profit                $660.4    $712.9   $(52.5)  (7.4)


           Retail vehicle unit sales:
                  New                        71,395    78,114   (6,719)  (8.6)
                  Used                       50,616    52,889   (2,273)  (4.3)
                                            122,011   131,003   (8,992)  (6.9)

           Revenue per vehicle retailed:
                  New                       $30,649   $31,025    $(376)  (1.2)
                  Used                      $16,036   $16,302    $(266)  (1.6)

           Gross profit per vehicle
            retailed:
                  New                        $2,032    $2,263    $(231) (10.2)
                  Used                       $1,658    $1,891    $(233) (12.3)
                  Finance and insurance      $1,183    $1,117      $66    5.9



                                        Three Months Ended
                Operating Percentages        March 31,
                                          % 2008   % 2007

           Revenue mix percentages:
               New vehicle                  55.2    56.5
               Used vehicle                 24.6    24.9
               Parts and service            16.4    15.0
               Finance and insurance, net    3.6     3.4
               Other                         0.2     0.2
                                           100.0   100.0

           Gross profit mix percentages:
               New vehicle                  22.0    24.8
               Used vehicle                 12.6    14.3
               Parts and service            42.6    39.4
               Finance and insurance        21.9    20.5
               Other                         0.9     1.0
                                           100.0   100.0

           Operating items as a
            percentage of revenue:
               Gross Profit:
                  New vehicle                6.6     7.3
                  Used vehicle - retail     10.3    11.6
                  Parts and service         43.3    43.6
                  Total                     16.7    16.6


SOURCE AutoNation, Inc.


http://www.AutoNation.com

Media Contact

Marc Cannon
Executive Vice President
Chief Marketing Officer, Communications and Public Policy
Phone: 954.769.3146
cannonm@autonation.com

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