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AutoNation Reports 2009 First Quarter Results of Operations

- AutoNation remained solidly profitable despite a distressed industry environment

- Cumulative debt reduction of approximately $1.25 billion since January 1, 2008

- AutoNation exceeded $200 million annualized cost savings objective

FORT LAUDERDALE, Fla., April 23 /PRNewswire-FirstCall/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported 2009 first quarter net income from continuing operations of $49 million or $0.27 per share, compared to year-ago net income from continuing operations of $56 million or $0.31 per share. In the quarter, the Company had a net benefit from certain items of $9 million after-tax or $0.04 per share, including a gain on the purchase of the Company's senior notes and a net gain on asset sales and dispositions, partially offset by property impairments. After adjusting for these items as disclosed in the attached financial tables, net income from continuing operations for the 2009 first quarter was $40 million or $0.23 per share.

First quarter 2009 revenue totaled $2.5 billion, compared to $3.8 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 46%, according to CNW Research. AutoNation new vehicle unit sales declined 43%.

Commenting on the first quarter, Mike Jackson, Chairman and Chief Executive Officer, said, "We are very pleased with the performance of AutoNation as we remained solidly profitable during the first quarter even with a U.S. SAAR near 9 million new vehicle units, the lowest in nearly 30 years. Our operating discipline, the hard work of our associates and savings generated from our $200 million cost reduction program led to sequential improvement from the fourth quarter 2008."

AutoNation has three operating segments: Domestic, Import, and Premium Luxury. The Domestic segment is comprised of stores that sell vehicles manufactured by General Motors, Ford, and Chrysler; the Import segment is comprised of stores that sell vehicles manufactured primarily by Toyota, Honda, and Nissan; and the Premium Luxury segment is comprised of stores that sell vehicles manufactured primarily by Mercedes, BMW, and Lexus.


    --  Domestic - Domestic segment income for the first quarter of 2009 was
        $15 million compared to year-ago segment income of $38 million.  First
        quarter Domestic retail new vehicle unit sales declined 47%.


    --  Import - Import segment income for the first quarter of 2009 was $30
        million compared to year-ago segment income of $56 million.  First
        quarter Import retail new vehicle unit sales declined 45%.


    --  Premium Luxury - Premium Luxury segment income for the first quarter
        of 2009 was $41 million compared to year-ago segment income of $51
        million. First quarter Premium Luxury retail new vehicle unit sales
        declined 31%.

Jackson added, "During the first quarter AutoNation reduced debt by approximately $500 million, for a cumulative debt reduction of approximately $1.25 billion, including $635 million of non-vehicle debt, since January 1, 2008. As a result of these actions and our financial performance we remained in compliance with all of the financial covenants in our debt agreements and improved our leverage ratio to 2.35 as of March 31, 2009. Our liquidity remains strong as we ended the quarter with approximately $400 million of cash and revolver availability." Looking forward, Jackson also stated, "Although first quarter industry sales were lower than expectations, we agree with industry projections that sales rates will improve in the second half of this year."

The first quarter conference call may be accessed at 11:00 a.m. Eastern Time by phone at 888-769-8515 (pass code: AutoNation). The webcast may be accessed by the Internet (audio webcast) at http://www.AutoNation.com "Investors Relations" and then "Webcasts." On the "Webcasts" page, there will be a link for the first quarter webcast. A playback of the event will be available after 1:00 pm Eastern Time April 23, 2009 through April 30, 2009 by calling 866-375-1051 (pass code: 75300).

About AutoNation, Inc.

AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's largest automotive retailer. AutoNation owns approximately 300 new vehicle franchises in 15 states. For additional information, please visit http://corp.AutoNation.com or www.AutoNation.com, where more than 70,000 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.

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,
                                         2009      2008
                                         ----      ----

      Revenue:
        New vehicle                    $1,213.9  $2,125.5
        Used vehicle                      612.7     934.4
        Parts and service                 554.4     622.4
        Finance and insurance, net         78.7     140.2
        Other                              13.4      16.8
                                           ----      ----
      Total revenue                     2,473.1   3,839.3
                                        -------   -------

      Cost of sales:
        New vehicle                     1,138.3   1,983.9
        Used vehicle                      547.1     853.8
        Parts and service                 311.0     351.2
        Other                               6.1       7.2
                                            ---       ---
      Total cost of sales               2,002.5   3,196.1
                                        -------   -------

      Gross profit                        470.6     643.2

      Selling, general and
       administrative expenses            364.6     474.6
      Depreciation and amortization        20.7      22.7
      Other expenses (income), net         (3.5)      0.3
                                           ----       ---

      Operating income                     88.8     145.6

      Floorplan interest expense          (10.1)    (23.9)
      Other interest expense              (11.8)    (26.8)
      Gain on senior note repurchases      11.9         -
      Interest income                       0.3       0.5
      Other losses, net                    (1.6)     (1.7)
                                           ----      ----

      Income from continuing
       operations before income taxes      77.5      93.7

      Income tax provision                 28.9      38.0
                                           ----      ----

      Net income from continuing
       operations                          48.6      55.7

      Loss from discontinued
       operations, net of income taxes    (14.0)     (5.0)
                                          -----      ----


      Net income                          $34.6     $50.7
                                          =====     =====


      Diluted earnings (loss) per share:
        Continuing operations             $0.27     $0.31
        Discontinued operations          $(0.08)   $(0.03)

        Net income                        $0.20     $0.28


      Weighted average common shares
       outstanding                        177.0     180.6

      Common shares outstanding, net
       of treasury stock, at March 31     177.1     178.5



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


          Operating Highlights            Three Months Ended March 31,
          --------------------           ------------------------------
                                      2009      2008  $ Variance  % Variance
                                      ----      ----  ----------  ----------


    Revenue:
      New vehicle                 $1,213.9  $2,125.5     $(911.6)      (42.9)
        Retail used vehicle          544.4     775.5      (231.1)      (29.8)
        Wholesale                     68.3     158.9       (90.6)      (57.0)
                                      ----     -----       -----
      Used vehicle                   612.7     934.4      (321.7)      (34.4)
                                     -----     -----      ------
      Parts and service              554.4     622.4       (68.0)      (10.9)
      Finance and insurance, net      78.7     140.2       (61.5)      (43.9)
      Other                           13.4      16.8        (3.4)
                                      ----      ----        ----
    Total revenue                 $2,473.1  $3,839.3   $(1,366.2)      (35.6)
                                  ========  ========   =========


    Gross profit:
      New vehicle                    $75.6    $141.6      $(66.0)      (46.6)
        Retail used vehicle           63.6      80.9       (17.3)      (21.4)
        Wholesale                      2.0      (0.3)        2.3
                                       ---      ----         ---
      Used vehicle                    65.6      80.6       (15.0)      (18.6)
                                      ----      ----       -----
      Parts and service              243.4     271.2       (27.8)      (10.3)
      Finance and insurance           78.7     140.2       (61.5)      (43.9)
      Other                            7.3       9.6        (2.3)
                                       ---       ---        ----
    Total gross profit               470.6     643.2      (172.6)      (26.8)

    Selling, general and
     administrative expenses         364.6     474.6       110.0        23.2

    Depreciation and amortization     20.7      22.7         2.0
    Other expenses, net               (3.5)      0.3         3.8
                                      ----       ---         ---
     Operating income (loss)          88.8     145.6       (56.8)

    Floorplan interest expense       (10.1)    (23.9)       13.8
    Other interest expense           (11.8)    (26.8)       15.0
    Gain on senior note
     repurchases                      11.9         -        11.9
    Interest income                    0.3       0.5        (0.2)
    Other losses, net                 (1.6)     (1.7)        0.1
                                      ----      ----         ---
      Income from continuing
       operations before income
       taxes                         $77.5     $93.7      $(16.2)
                                     =====     =====      ======

    Retail vehicle unit sales:
         New                        39,220    69,254     (30,034)      (43.4)
         Used                       35,329    48,351     (13,022)      (26.9)
                                    ------    ------     -------
                                    74,549   117,605     (43,056)      (36.6)
                                    ======   =======     =======

    Revenue per vehicle retailed:
         New                       $30,951   $30,691        $260         0.8
         Used                      $15,409   $16,039       $(630)       (3.9)

    Gross profit per vehicle retailed:
         New                        $1,928    $2,045       $(117)       (5.7)
         Used                       $1,800    $1,673        $127         7.6
         Finance and insurance      $1,056    $1,192       $(136)      (11.4)



                                                      Three Months
                                                       Ended March
                  Operating Percentages                   31,
                  ---------------------              -------------
                                                     2009(%)  2008(%)
                                                     ----     ----

    Revenue mix percentages:
      New vehicle                                    49.1     55.4
      Used vehicle                                   24.8     24.3
      Parts and service                              22.4     16.2
      Finance and insurance, net                      3.2      3.7
      Other                                           0.5      0.4
                                                      ---      ---
                                                    100.0    100.0
                                                    =====    =====

    Gross profit mix percentages:
      New vehicle                                    16.1     22.0
      Used vehicle                                   13.9     12.5
      Parts and service                              51.7     42.2
      Finance and insurance                          16.7     21.8
      Other                                           1.6      1.5
                                                      ---      ---
                                                    100.0    100.0
                                                    =====    =====

    Operating items as a percentage of revenue:
      Gross profit:
         New vehicle                                  6.2      6.7
         Used vehicle - retail                       11.7     10.4
         Parts and service                           43.9     43.6
         Total                                       19.0     16.8
      Selling, general and administrative expenses   14.7     12.4
      Operating income                                3.6      3.8

    Operating items as a percentage of total gross
     profit:
      Selling, general and administrative expenses   77.5     73.8
      Operating income                               18.9     22.6



           Segment Operating Highlights    Three Months Ended March 31,
           ----------------------------    ----------------------------
                                      2009      2008  $ Variance  % Variance
                                      ----      ----  ----------  ----------


    Revenue:
      Domestic                       $850.0  $1,381.8     $(531.8)      (38.5)
      Import                          892.6   1,461.7      (569.1)      (38.9)
      Premium luxury                  704.0     962.5      (258.5)      (26.9)
      Corporate and other              26.5      33.3        (6.8)      (20.4)
                                       ----      ----        ----
    Total revenue                  $2,473.1  $3,839.3   $(1,366.2)      (35.6)
                                   ========  ========   =========


    *Segment income (loss)
      Domestic                        $15.1     $38.3      $(23.2)      (60.6)
      Import                           29.5      55.5       (26.0)      (46.8)
      Premium luxury                   40.9      50.7        (9.8)      (19.3)
      Corporate and other              (6.8)    (22.8)       16.0
                                       ----     -----        ----
    Total segment income               78.7     121.7       (43.0)

    Add:  Floorplan interest expense   10.1      23.9       (13.8)

                                      -----    ------      ------
    Operating income                  $88.8    $145.6      $(56.8)
                                      =====    ======      ======

    * Segment income (loss) is defined as operating income net of floorplan
    interest expense

    Retail new vehicle unit sales:
      Domestic                       12,081    22,666     (10,585)      (46.7)
      Import                         20,019    36,222     (16,203)      (44.7)
      Premium luxury                  7,120    10,366      (3,246)      (31.3)
                                      -----    ------      ------
                                     39,220    69,254     (30,034)      (43.4)
                                     ======    ======     =======




         Brand Mix - New Vehicle Retail Units Sold
         -----------------------------------------
                                                       Three Months
                                                        Ended March
                                                           31,
                                                      -------------
                                                      2009(%)  2008(%)
                                                      ----     ----

      Domestic:
         Ford, Lincoln-Mercury                        14.9     14.8
         Chevrolet, Pontiac, Buick, Cadillac, GMC     11.6     13.1
         Chrysler, Jeep, Dodge                         4.3      4.8
                                                       ---      ---
           Domestic total                             30.8     32.7
                                                      ----     ----

      Import:
         Honda                                        13.7     13.1
         Toyota                                       20.0     21.2
         Nissan                                       10.5     12.5
         Other imports                                 6.8      5.5
                                                       ---      ---
           Import total                               51.0     52.3
                                                      ----     ----

      Premium Luxury:
         Mercedes                                      8.5      6.6
         BMW                                           5.1      4.1
         Lexus                                         2.8      3.0
         Other premium luxury (Land Rover, Porsche)    1.8      1.3
                                                       ---      ---
           Premium Luxury total                       18.2     15.0
                                                      ----     ----

                                                     100.0    100.0
                                                     =====    =====



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


      Capital Expenditures / Stock and Debt    Three Months
                    Repurchases               Ended March 31,
      --------------------------------------  --------------
                                              2009      2008
                                              ----      ----

      Capital expenditures                   $20.4      $23.4
      Acquisitions                            $0.2      $29.4
      Proceeds from exercises of stock
       options                                $0.2       $1.0
      Senior note repurchases (aggregate
       principal)                            $72.0         $-
      Stock repurchases:
        Aggregate purchase price                $-      $27.8
        Shares repurchased (in millions)         -        1.9



                                                      Three Months Ended
             Floorplan Assistance and Expense             March 31,
             --------------------------------        -------------------
                                                   2009   2008   Variance
                                                   ----   ----  ----------


      Floorplan assistance earned (included in
       cost of sales)                             $10.4  $20.1       $(9.7)
      Floorplan interest expense (new vehicles)    (9.6) (23.8)       14.2
                                                   ----  -----        ----

        Net inventory carrying benefit (cost)      $0.8  $(3.7)       $4.5
                                                   ====  =====        ====



               Balance Sheet and Other Highlights
               ----------------------------------

                              March 31,  December 31, March 31,
                                 2009       2008        2008
                              ----------  --------   ----------

      Cash and cash
       equivalents                 $62.0    $110.5      $35.1
      Inventory                 $1,553.4  $1,805.8   $2,264.3
      Total floorplan notes
       payable                  $1,504.4  $1,858.2   $2,105.8
      Non-vehicle debt          $1,140.9  $1,258.9   $1,698.6
      Equity                    $2,236.7  $2,198.1   $3,501.0
      New days supply (industry
       standard of selling
        days, including
        fleet)                   66 days   83 days    57 days

      Used days supply
       (trailing
       30 days)                  36 days   30 days    40 days



                            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
                                          ------------  ------------

                                           2009   2008   2009   2008
                                           ----   ----   ----   ----

      As reported                         $34.6  $50.7  $0.20  $0.28

        Discontinued operations, net of
         income taxes                      14.0    5.0  $0.08  $0.03
                                           ----    ---
      From continuing operations, as
       reported                            48.6   55.7  $0.27  $0.31

        Gain on senior note repurchases    (7.4)     - $(0.04)    $-
        Net gain on asset sales and
         dispositions                      (5.9)     - $(0.03)    $-
        Property impairments                4.8      -  $0.03     $-
                                            ---      -

      Adjusted                            $40.1  $55.7  $0.23  $0.31
                                          =====  =====


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



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


          Operating Highlights           Three Months Ended March 31,
          --------------------           ----------------------------
                                    2009     2008   $ Variance   % Variance
                                    ----     ----   ----------   ----------


    Revenue:
      New vehicle                 $1,203.7 $2,115.1     $(911.4)      (43.1)
        Retail used vehicle          541.0    770.0      (229.0)      (29.7)
        Wholesale                     67.2    156.8       (89.6)      (57.1)
                                      ----    -----       -----
      Used vehicle                   608.2    926.8      (318.6)      (34.4)
      Parts and service              550.3    613.7       (63.4)      (10.3)
      Finance and insurance, net      78.3    139.5       (61.2)      (43.9)
      Other                           12.8     16.2        (3.4)      (21.0)
                                      ----     ----        ----
    Total revenue                 $2,453.3 $3,811.3   $(1,358.0)      (35.6)
                                  ======== ========   =========


    Gross profit:
      New vehicle                    $74.9   $141.1      $(66.2)      (46.9)
        Retail used vehicle           63.1     80.4       (17.3)      (21.5)
        Wholesale                      2.0     (0.2)        2.2
                                       ---     ----         ---
      Used vehicle                    65.1     80.2       (15.1)      (18.8)
      Parts and service              241.7    268.5       (26.8)      (10.0)
      Finance and insurance           78.3    139.5       (61.2)      (43.9)
      Other                            7.1      9.5        (2.4)
                                       ---      ---        ----
    Total gross profit              $467.1   $638.8     $(171.7)      (26.9)
                                    ======   ======     =======




    Retail vehicle unit sales:
         New                        39,021   68,887     (29,866)      (43.4)
         Used                       35,149   47,947     (12,798)      (26.7)
                                    ------   ------     -------
                                    74,170  116,834     (42,664)      (36.5)
                                    ======  =======     =======

    Revenue per vehicle retailed:
         New                       $30,847  $30,704        $143         0.5
         Used                      $15,392  $16,059       $(667)       (4.2)

    Gross profit per vehicle retailed:
         New                        $1,919   $2,048       $(129)       (6.3)
         Used                       $1,795   $1,677        $118         7.0
         Finance and insurance      $1,056   $1,194       $(138)      (11.6)



                                    Three Months
                                     Ended March
         Operating Percentages          31,
         ---------------------     -------------
                                   2009(%)  2008(%)
                                   ----     ----

    Revenue mix percentages:
      New vehicle                  49.1     55.5
      Used vehicle                 24.8     24.3
      Parts and service            22.4     16.1
      Finance and insurance, net    3.2      3.7
      Other                         0.5      0.4
                                    ---      ---
                                  100.0    100.0
                                  =====    =====


    Gross profit mix percentages:
      New vehicle                  16.0     22.1
      Used vehicle                 13.9     12.6
      Parts and service            51.7     42.0
      Finance and insurance        16.8     21.8
      Other                         1.6      1.5
                                    ---      ---
                                  100.0    100.0
                                  =====    =====



    Operating items as a percentage of revenue:
      Gross Profit:
         New vehicle                6.2      6.7
         Used vehicle - retail     11.7     10.4
         Parts and service         43.9     43.8
         Total                     19.0     16.8



                              AUTONATION, INC.
            KEY CREDIT AGREEMENT COVENANT COMPLIANCE CALCULATIONS
                               March 31, 2009
                               --------------

    ($ millions)

    ------------------------------------------------
    Income Statement information for the last
     twelve months (April 1, 2008 - March 31, 2009):
    ------------------------------------------------

    Net income (loss) from continuing operations              $(1,219.6)

    Floorplan and other interest expense                          144.4

    Income tax provision (benefit)                               (206.1)

    Depreciation and amortization                                  86.1

    Stock-based compensation expense (SFAS
     No. 123R)                                                     21.0

    Impairment charges (including goodwill,
     franchise rights, and long-lived assets)                   1,761.4
                                                                -------

    EBITDA                                                        587.2

    Floorplan interest expense                                    (70.0)
                                                                  -----

    Adjusted EBITDA                                              $517.2
                                                                 ======


    ---------------------
    As of March 31, 2009:
    ---------------------

    Funded indebtedness (primarily comprised of
     current and long-term debt and letters of
     credit)                                                   $1,213.8

    Vehicle secured indebtedness (floorplan
     payables)                                                  1,504.4
                                                                -------

    Funded indebtedness including floorplan                     2,718.2

    Shareholders' equity                                        2,237.4
                                                                -------

    Total capitalization including floorplan                   $4,955.6
                                                               ========


    ----------------------------------------
    Ratio of funded indebtedness/
    Adjusted EBITDA....................                            2.35
                                                         less
    Covenant................................             than      3.00
    ----------------------------------------            -----      ----


    ----------------------------------------
    Ratio of funded indebtedness including
     floorplan/
    Total capitalization including
     floorplan..............                                       54.9%
                                                         less
    Covenant................................             than      65.0%
    ----------------------------------------            -----      ----



SOURCE AutoNation, Inc.

CONTACT: Marc Cannon
+1-954-769-3146
cannonm@autonation.com
or
Investor Contact:
Derek Fiebig
+1-954-769-7342
fiebigd@autonation.com
both of AutoNation, Inc.

Media Contact

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

Press inquiries, or interview requests can be sent to Marc via e-mail.

Please state the following with your request:

  • Your Name
  • Name of the organization you represent
  • Brief description of your request, or article
  • Deadline

For other inquiries or corporate information, call: 954.769.7000