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AutoNation Earns $86.3 Million, or $0.26 Per Share, Beating The Analysts' Second-Quarter Consensus Estimate

Jul. 19, 2001
FORT LAUDERDALE, Fla., Jul 19, 2001 /PRNewswire/ --

* Parts and Service, Finance and Insurance Sales Increase * On Track to Meet Full-Year EPS Target of 85-to-90 Cents

AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, reported results for the 2001 second quarter that beat the analysts' consensus estimate as the Company countered softer sales of new vehicles with same-store sales growth from its parts and service, and finance and insurance operations.

The Company said that for the second quarter ended June 30, 2001, it earned net income of $86.3 million, or $0.26 per share, versus net income from continuing operations of $96.6 million, or $0.27 per share, in the same period a year ago. Excluding non-recurring gains totaling $0.02 per share in each year, the 2001 second-quarter earnings of $0.24 per share compared to $0.25 per share reported a year earlier, and beat the 2001 analysts' consensus estimate of $0.23 per share. The non-recurring gains were primarily the result of this year's sale of the Company's New Jersey-based Flemington Group of dealerships and the gain resulting from last year's sale of certain marketable securities. The year-ago result from continuing operations excluded $0.01 per share of net income from discontinued operations.

"For a second consecutive quarter AutoNation has surpassed earnings expectations while overcoming significant challenges in the new vehicle market," said AutoNation Chief Executive Officer Mike Jackson. "We've delivered strong operating margins and higher same-store revenue in parts and service, and finance and insurance, while reducing debt and buying back shares. This demonstrates our resiliency in a difficult retail environment."

Looking ahead, Mr. Jackson added, "AutoNation is on track to achieve full- year earnings per share of $0.85 to $0.90. Our earnings per share estimate for the 2001 third quarter is a range of $0.23 to $0.25."

During the quarter, revenue totaled $4.94 billion, down 7.4% from $5.34 billion during the same period a year ago. The Company said revenue reflected fewer sales of new vehicles, particularly among domestic brands. The softer new vehicle sales were partially offset by a 9.6% improvement in total finance and insurance sales, an 1.8% improvement in total parts and service sales, and a stable performance in used vehicle sales.

    Also during the quarter, AutoNation:

    * Generated earnings before interest, taxes, depreciation and amortization
      (EBITDA) of $219.6 million.

    * Increased the sale of finance and insurance products by 21% on a per-
      vehicle-retailed basis to $694 from $575 a year ago.

    * Improved the total gross margin on parts and service to 43.4%, a 30-
      basis-point improvement from a year ago.

    * Reduced non-vehicle debt by $134.1 million to $698.1 million or
      16% during the quarter and by $159.1 million or 19% since December 31,
      2000.

    * Reduced new vehicle days supply by 6% to 59 days from 63 days at March
      31, 2001; 29% from a December 31, 2000 mark of 83 days.

    * Reduced corporate selling, general and administrative (SG&A) expenses by
      10.5% from the same period a year ago, driven primarily by the
      continuing disposal of excess properties.

    * Repurchased 2.9 million of its shares at a cost of $30.9 million,
      leaving a board-authorized amount of $137.9 million for future
      repurchases.
For the six-month period ended June 30, 2001, the Company earned net income of $146.2 million, or $0.43 per share, versus net income from continuing operations of $161.3 million, or $0.44 per share, in the prior year. The year-ago result excludes $0.01 per share of net income from discontinued operations. The Company's revenue during first six months of 2001 totaled $9.83 billion versus $10.57 billion in the same period a year ago.

AutoNation will discuss its second-quarter results, its earnings outlook and supporting assumptions later this morning during an 11 a.m. EDT conference call. To listen to the call, dial 1-888-408-5406, or log on to the "Corporate Site" section at www.autonation.com and click on the "Visit Our Corporate Site" icon and then on the "Webcast" icon. A playback of the conference call will be available after 12 p.m. on July 19, 2001, through Thursday, July 26, 2001, by dialing 1-800-475-6701 (access code 594914), or by visiting the "Audio Presentations" section of the Investor Relations page at AutoNation's corporate web site.

AutoNation, Inc., headquartered in Fort Lauderdale, Florida, is America's largest automotive retailer, on and off the Web. A Fortune 100 company, AutoNation employs 31,000 people and owns and operates 368 automotive retail franchises in 17 states. For additional information, please visit 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, estimates and expectations is contained in the Company's SEC filings. The Company undertakes no duty to update its forward- looking statements, including its earnings outlook.

                                AUTONATION, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In millions, except per share data)


                                      Three Months Ended    Six Months Ended
                                           June 30,            June 30,
                                        2001      2000      2001      2000

       Revenue                        $4,942.1  $5,339.5  $9,829.1  $10,569.7

       Cost of operations              4,186.8   4,555.5   8,336.0    9,033.6

       Gross margin                      755.3     784.0   1,493.1    1,536.1

       Selling, general and
        administrative expenses          544.5     547.1   1,094.6    1,103.1
       Depreciation                       16.4      13.1      32.0       27.8
       Amortization                       20.4      19.9      40.4       38.3
       Restructuring and impairment
        charges, net                       9.5       ---       8.7        ---
       Other gain                        (19.0)      ---     (19.0)       ---

       Operating income                  183.5     203.9     336.4      366.9

       Floorplan interest expense        (35.1)    (51.5)    (81.0)     (99.0)
       Other interest expense, net        (6.2)     (5.5)    (15.8)     (13.7)
       Other income (expense)             (0.7)      7.6      (0.8)       3.8

       Income from continuing
        operations before income
        taxes                            141.5     154.5     238.8      258.0

       Provision for income taxes         55.2      57.9      92.6       96.7

       Net income from continuing
        operations                        86.3      96.6     146.2      161.3

       Income from discontinued
        operations, net of income
        taxes and minority interest        ---       4.2       ---        1.8

       Net income                        $86.3    $100.8    $146.2     $163.1


       Diluted earnings per share:
           Continuing operations         $0.26     $0.27     $0.43      $0.44
           Discontinued operations         ---      0.01       ---       0.01
           Net income                    $0.26     $0.28     $0.43      $0.45

       Weighted average common and
        common equivalent shares
        outstanding                      337.0     361.3     340.7      364.4

       Common shares outstanding         333.1     361.1     333.1      361.1


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

                                             Three Months Ended June 30,
                                           2001        %      2000        %

    Operating Highlights:
    Revenue:
       New vehicle                       $2,941.2     59.5  $3,241.8     60.7
       Used vehicle                         972.4     19.7   1,008.4     18.9
       Parts and service                    599.5     12.1     588.8     11.0
       F&I                                  122.2      2.5     111.5      2.1
       Other                                306.8      6.2     389.0      7.3
                                         $4,942.1    100.0  $5,339.5    100.0


    Gross margin:
       New vehicle                         $242.0      8.2    $275.5      8.5
       Used vehicle                         111.8     11.5     114.9     11.4
       Parts and service                    260.3     43.4     253.8     43.1
       F&I                                  122.2    100.0     111.5    100.0
       Other                                 19.0      6.2      28.3      7.3
                                            755.3     15.3     784.0     14.7

     S,G&A - Store                          511.3     10.3     510.0      9.6
     Store performance                      244.0      5.0     274.0      5.1

    S,G&A - Corporate                        33.2      0.8      37.1      0.7
    Depreciation                             16.4      0.3      13.1      0.2
    Amortization                             20.4      0.4      19.9      0.4
    Restructuring and impairment
     charges, net                             9.5      0.2       ---      0.0
    Other gain                              (19.0)    (0.4)      ---      0.0
    Operating income                       $183.5      3.7    $203.9      3.8

    Retail vehicle sales:
          New                             112,000            127,000
          Used                             64,000             67,000
                                          176,000            194,000

    Gross margin per vehicle retailed:
          New                              $2,161             $2,169
          Used                             $1,747             $1,715
          F&I                                $694               $575

    EBITDA                                  219.6              244.5

    Capital expenditures                    $28.8              $26.4


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


                                              Six Months Ended June 30,
                                          2001          %       2000       %

    Operating Highlights:
    Revenue:
       New vehicle                      $5,808.9       59.1   $6,399.0   60.6
       Used vehicle                      1,949.5       19.8    2,011.7   19.0
       Parts and service                 1,201.0       12.2    1,176.7   11.1
       F&I                                 233.7        2.4      218.3    2.1
       Other                               636.0        6.5      764.0    7.2
                                        $9,829.1      100.0  $10,569.7  100.0


    Gross margin:
       New vehicle                        $481.0        8.3     $536.4    8.4
       Used vehicle                        219.2       11.2      231.3   11.5
       Parts and service                   518.1       43.1      500.9   42.6
       F&I                                 233.7      100.0      218.3  100.0
       Other                                41.1        6.5       49.2    6.4
                                         1,493.1       15.2    1,536.1   14.5

     S,G&A - Store                       1,020.7       10.4    1,019.4    9.6
     Store performance                     472.4        4.8      516.7    4.9

    S,G&A - Corporate                       73.9        0.8       83.7    0.7
    Depreciation                            32.0        0.3       27.8    0.3
    Amortization                            40.4        0.4       38.3    0.4
    Restructuring and impairment
     charges, net                            8.7        0.1        ---    0.0
    Other gain                             (19.0)      (0.2)       ---    0.0
    Operating income                      $336.4        3.4     $366.9    3.5

    Retail vehicle sales:
          New                            221,000               253,000
          Used                           129,000               134,000
                                         350,000               387,000

    Gross margin per vehicle retailed:
          New                             $2,176                $2,120
          Used                            $1,699                $1,726
          F&I                               $668                  $564

    EBITDA                                 408.0                 436.8

    Capital expenditures                    52.8                  52.9

    Balance Sheet and
     Other Highlights:   June 30, 2001   March 31, 2001  December 31, 2000
       Cash and cash
        equivalents         $26.1              $83.0           $82.2
       Inventory          2,439.3            2,597.4         2,769.2
       Floorplan
        financing         2,110.1            2,294.6         2,454.0
       Non-vehicle debt     698.1              832.2           857.2
       Equity             3,858.5            3,803.4         3,842.5
       Days supply
       (trailing 30 days):
             New           59 days      63 days         83 days
             Used          36 days      35 days         43 days


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


                                           Three Months Ended June 30, 2001
                                           2001        %       2000       %

    Revenue:
                New vehicle               $2,809.7    59.6   $3,097.1    61.3
                Used vehicle                 927.8    19.7      949.0    18.8
                Parts and service            566.4    12.0      549.9    10.9
                F&I                          115.3     2.4      105.7     2.1
                Other                        295.7     6.3      351.2     6.9
                                          $4,714.9   100.0   $5,052.9   100.0

    Gross margin:
                New vehicle                 $232.4     8.3     $263.4     8.5
                Used vehicle                 105.9    11.4      108.0    11.4
                Parts and service            246.5    43.5      236.9    43.1
                F&I                          115.3   100.0      105.7   100.0
                Other                         15.6     5.3       25.2     7.2
                                             715.7    15.2      739.2    14.6


     S,G&A - Store                           485.9    10.3      478.7     9.5

    Store performance                       $229.8     4.9     $260.5     5.1


    Retail vehicle sales:
                   New                     107,000            122,000
                   Used                     61,000             62,000
                                           168,000            184,000

    Gross margin per vehicle retailed:
                   New                      $2,172             $2,159
                   Used                     $1,736             $1,742
                   F&I                        $686               $574


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

                                                Six Months Ended June 30, 2001
                                           2001       %       2000       %

    Revenue:
                New vehicle               $5,474.9    59.3   $6,087.9    61.2
                Used vehicle               1,829.5    19.8    1,864.2    18.8
                Parts and service          1,119.1    12.1    1,090.8    11.0
                F&I                          218.9     2.4      206.0     2.1
                Other                        592.8     6.4      692.4     6.9
                                          $9,235.2   100.0   $9,941.3   100.0

    Gross margin:
                New vehicle                 $454.9     8.3     $512.0     8.4
                Used vehicle                 206.4    11.3      214.0    11.5
                Parts and service            483.4    43.2      464.2    42.6
                F&I                          218.9   100.0      206.0   100.0
                Other                         33.2     5.6       44.8     6.5
                                           1,396.8    15.1    1,441.0    14.5


     S,G&A - Store                           952.3    10.3      948.4     9.5

    Store performance                       $444.5     4.8     $492.6     5.0


    Retail vehicle sales:
                   New                     208,000            241,000
                   Used                    120,000            124,000
                                           328,000            365,000

    Gross margin per vehicle retailed:
                   New                      $2,187             $2,124
                   Used                     $1,720             $1,726
                   F&I                        $667               $564


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SOURCE AutoNation, Inc.

CONTACT:          Oscar Suris of AutoNation, +1-954-769-3576, or
                  suriso@autonation.com
                  /Company News On-Call:
                  http://www.prnewswire.com/gh/cnoc/comp/750525.html

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