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AutoNation Delivers 18 Percent Increase in Third Quarter Earnings Per Share From Continuing Operations

Oct. 26, 2000
       Substantial Cost Reductions Generate Improved Operating Margins

    FORT LAUDERDALE, Fla., Oct. 26 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN)
today reported that for the three months ended September 30, 2000, earnings
per share from continuing operations increased 18 percent to $0.26 per share,
or $93.1 million, from $0.22 per share or $92.6 million last year.  The
Company said results in the quarter benefited from continued strong new
vehicle sales, improved operating efficiencies, reductions in corporate
overhead and the Company's ongoing share repurchase program, partially offset
by higher floorplan interest.
     Results in the quarter include one-time items resulting in a net gain of
$0.02 per share, after taxes.  Excluding these one-time items, AutoNation
earned $0.24 per share in the third quarter.
    Revenue in the quarter was down two percent to $5.34 billion, compared
with 5.46 billion last year.  Excluding the impact of the Company's former
used vehicle megastores, total revenue in the quarter increased two percent,
or $101 million.
    The Company also reported that operating margins improved 60 basis points
to 3.7 percent or $197 million during the quarter, versus 3.1 percent or
$170 million last year.  Operating margin improvements resulted from continued
substantial reductions in both corporate overhead and store-level expense.
Also during the quarter, AutoNation recorded a 10 basis point decline in gross
margins resulting from a higher mix of lower margin new versus used vehicle
sales.  During the quarter, AutoNation's store-level selling, general and
administrative expenses declined 40 basis points to 9.6 percent of sales,
versus 10 percent last year, and corporate overhead expense declined 40 basis
points to 0.6 percent of sales this year, versus one percent last year.
    For the nine-month period ended September 30, 2000, earnings per share
from continuing operations grew 27 percent to $0.70 per share, or $254 million
versus $0.55 per share, or $248 million last year.  Also during the nine-month
period, revenue increased more than five percent to $15.9 billion this year,
compared with $15.1 billion in the same period last year.
    Commenting on AutoNation's results in the third quarter, Chief Executive
Officer Michael J. Jackson said, "AutoNation is doing an outstanding job of
controlling expenses.  We're especially pleased that our cost reduction
efforts at both the corporate and store levels are on-track to meet full-year
objectives.  We are well positioned to meet the challenges that a changing
economy may bring."
    Mr. Jackson continued, "Also during the quarter, AutoNation generated
$243 million of EBITDA, a 19 percent improvement over the same period last
year.  We have used the resulting cash primarily to pay down debt, further
solidifying an already strong balance sheet."
    Focusing on the full year, Mr. Jackson said, "We're pleased with our
nine-month reported results of 70 cents per share from continuing operations,
which puts us on track to deliver full-year earnings per share from continuing
operations in the range of $0.90 to $0.92.  Looking forward to 2001, we're
targeting full-year earnings in the range of $1.00 to $1.05 per share."
    AutoNation will discuss its third quarter 2000 results in a live
conference call and audio webcast on Thursday, October 26, 2000 at 11 a.m.
Eastern Time.  To listen to the conference call, dial 1-800-260-0702 or log on
to http://www.autonation.com and click on the "Visit Our Corporate Site" icon.  A
playback of the conference call will be available after 2 p.m., October 26,
2000, through November 3, 2000, by dialing 1-800-475-6701, access code 543271,
or by visiting the "Audio Presentations" section of the Investor Relations
page at AutoNation's corporate site.

    AutoNation, Inc., headquartered in Fort Lauderdale, Florida, is America's
largest automotive retailer, on and off the web.  AutoNation had 1999 revenue
of more than $20 billion, employs approximately 35,000 people, and owns and
operates more than 400 automotive retail franchises in 17 states.  The Company
ranked #63 on the 2000 Fortune 500 and was ranked America's "Most Admired
Automotive Retailer" in 2000, also by Fortune magazine.  Additional
information is available at http://www.autonation.com .

    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 September 30,
                                     2000                      1999
                                                               (a)
                                             %                          %
    Revenue:
     New vehicle          $3,327.2          62.3     $3,207.6          58.7
     Used vehicle          1,027.0          19.3      1,220.5          22.4
     Fixed operations        586.7          11.0        583.9          10.7
     Other                   397.2           7.4        447.7           8.2
                           5,338.1         100.0      5,459.7         100.0

    Cost of operations     4,560.7          85.4      4,656.6          85.3

    Gross margin             777.4          14.6        803.1          14.7

    Store selling, general
     and administrative
     expenses                510.6           9.6        548.9          10.0

    Store performance        266.8           5.0        254.2           4.7

    Corporate overhead        29.7           0.6         52.0           1.0
    Depreciation              14.6           0.3         16.0           0.3
    Amortization              20.4           0.3         16.0           0.3
    Property carrying costs    7.0           0.1          ---           ---

    Asset impairment
     charge (gain)           (2.2)           ---          ---           ---

    Operating income         197.3           3.7        170.2           3.1

    Floorplan interest
     expense                (47.8)                     (28.8)
    Other interest expense,
     net                    (10.8)                        1.6
    Other income (expense)    10.3                        1.7

    Income from
     continuing operations
     before income taxes     149.0                      144.7

    Provision for
     income taxes             55.9                       52.1

    Net income from
     continuing operations    93.1           1.7         92.6           1.7

    Income from
     discontinued operations,
     net of income taxes
     and minority interest     ---                       12.1

    Net income               $93.1                     $104.7

    Diluted income per
     common and  common
     equivalent share:
      Continuing
       operations            $0.26                      $0.22
      Discontinued
       operations              ---                       0.02
      Net income             $0.26                      $0.24

    Weighted average common
     and common
     equivalent shares       361.3                      429.7

    Common shares
     outstanding             360.7                      405.8


                                     Nine Months Ended September 30,
                                    2000                       1999
                                                                (a)
                                              %                         %
    Revenue:
     New vehicle          $9,855.0          61.9     $8,662.8          57.4
     Used vehicle          3,128.5          19.7      3,578.7          23.7
     Fixed operations      1,763.4          11.1      1,642.2          10.9
     Other                 1,160.9           7.3      1,208.3           8.0
                          15,907.8         100.0     15,092.0         100.0

    Cost of operations    13,594.3          85.5     12,874.9          85.3

    Gross margin           2,313.5          14.5      2,217.1          14.7

    Store selling,
     general and
     administrative
     expenses              1,530.0           9.6      1,526.0          10.1

    Store performance        783.5           4.9        691.1           4.6

    Corporate overhead        93.5           0.6        130.0           0.9
    Depreciation              42.4           0.3         43.4           0.3
    Amortization              58.7           0.4         44.5           0.3
    Property carrying costs   26.9           0.1          ---           ---
    Asset impairment
     charge (gain)           (2.2)           ---          ---           ---

    Operating income         564.2           3.5        473.2           3.1

    Floorplan interest
     expense               (146.8)                     (84.0)
    Other interest
     expense, net           (24.5)                      (6.3)
    Other income
     (expense)                14.1                        4.8

    Income from continuing
     operations before
     income taxes            407.0                      387.7

    Provision for income
     taxes                   152.6                      139.6

    Net income from
     continuing operations   254.4           1.6        248.1           1.6

    Income from
     discontinued
     operations, net of
     income taxes and
     minority interest         1.8                      437.9

    Net income             $ 256.2                     $686.0

    Diluted income per
     common and common
     equivalent share:
      Continuing
       operations            $0.70                      $0.55
      Discontinued
       operations             0.01                       0.98
      Net income             $0.71                      $1.53

    Weighted average
     common and common
     equivalent shares       363.4                      449.1

    Common shares
     outstanding             360.7                      405.8

    (a) Floorplan interest, depreciation expense and amortization expense have
    been reclassified in prior periods to be comparative with the current
    periods as the Company has changed the manner in which it presents this
    information.

                               AUTONATION, INC.
                         UNAUDITED SUPPLEMENTARY DATA
                                (In millions)

SAME STORE OPERATING DATA:

                    Three Months Ended Sept. 30,  Nine Months Ended Sept. 30,
                       2000      1999   % Change   2000      1999    % Change

    Revenue:
     New vehicle   $ 2,941.4   $2,919.7    0.7  $8,133.5  $7,707.1      5.5
     Used vehicle      874.6      894.1  (2.2)   2,461.3   2,541.9    (3.2)
     Fixed operations  509.1      504.7    0.9   1,417.3   1,375.0      3.1
     Other             322.6      327.0  (1.3)     891.9     934.4    (4.5)
                   $ 4,647.7   $4,645.5    --- $12,904.0 $12,558.4      2.8

    Gross Margin      $670.8     $671.6  (0.1)  $1,855.9  $1,813.9      2.3
    %                  14.4%      14.5%            14.4%     14.4%

    S,G&A             $441.8     $453.3  (2.5)  $1,212.5  $1,217.4    (0.4)
    %                   9.5%       9.8%             9.4%      9.7%

    Store performance $229.0     $218.3    4.9    $643.4    $596.5      7.9
    %                   4.9%       4.7%             5.0%      4.7%

    AUTONATION CONSOLIDATED DATA:

    Balance Sheet
     Highlights:                           Sept. 30, 2000
June 30, 2000

      Cash and cash equivalents                   $133.5    $154.8
      Inventory                                  2,403.3   2,799.1
      Floorplan debt                             1,997.7   2,375.3
      Revolving credit facility                    669.0     865.0
      Equity                                     3,856.0   3,764.8


              Three Months Ended Sept. 30,   Nine Months Ended Sept. 30,
                        2000       1999             2000      1999
    Retail Unit
     Sales:
      New            130,000    129,000          383,000   353,000
      Used            65,000     83,000          199,000   246,000
                     195,000    212,000          582,000   599,000

    EBITDA            $242.6     $203.9           $679.4    $565.9

    Capital
     Expenditures       29.9       48.4             82.8     168.5


SOURCE AutoNation, Inc.
Web Site: http://www.autonation.com
Categories: Press Releases
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