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AutoNation, Inc. Reports First Quarter Earnings Per Share Of $0.17 * Beat Analysts' Consensus Estimate * Grew Store Performance Margin by 10 basis points * Reduced Days Supply of New Vehicles by 24

May. 02, 2001

FORT LAUDERDALE, Fla., May 2 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN) today reported that for the three months ended March 31, 2001, the company had net income of $59.9 million, or $0.17 per share, versus $62.3 million, or $0.17 per share, in the same period last year. Last year's reported first- quarter net income included a loss from discontinued operations of one cent per share.

During the quarter, total revenue declined 6.6% to $4.89 billion compared with $5.23 billion for the same period last year, and operating income declined 6.2% to $152.9 million versus $163 million last year. The company said revenue in the quarter reflected a slower pace of vehicle sales compared to last year, partially offset by revenue improvement of 2.3% in its parts and service business and 4.4% in its finance and insurance operation. This positive shift in the first-quarter revenue mix to higher margin businesses resulted in a 70-basis-point improvement in gross margin (15.1% versus 14.4% a year ago) and a 10-basis-point improvement in store performance margin (4.7% versus 4.6% a year ago).

Also during the three-months ended March 31, 2001, AutoNation:

  • Generated EBITDA of $188.4 million.

  • Improved gross margins on parts and service to 42.9%, a 90-basis-point improvement from a year ago.

  • Improved the sale of finance and insurance products by 16% on a per- vehicle-retailed basis to $641 versus $553 a year ago.

  • Reduced vehicle floorplan debt and non-vehicle debt by a total of $184.4 million.

  • Reduced new vehicle days supply by 24% to 63 days versus 83 days as of December 31, 2000.

  • Reduced used vehicle days supply by 19% to 35 days versus 43 days supply as of December 31, 2000.

  • Reduced corporate SG&A by 14.4%, or $6.7 million, driven primarily by the continued disposal of excess properties.

  • Repurchased 12.1 million shares of its stock at a cost of $98.2 million, leaving a board-authorized amount of $168.8 million for future repurchases.

Commenting on AutoNation's first quarter results, Chief Executive Officer Michael J. Jackson said, "AutoNation's first-quarter performance reflects our disciplined approach to the automotive retail business. Despite a challenging new vehicle market, we expanded margins, reduced inventories, paid down debt and repurchased shares. AutoNation is well positioned to meet the challenges of an uncertain retail environment."

Looking ahead, Mr. Jackson added, "AutoNation remains cautious about the full-year outlook for the industry and is therefore maintaining its estimate of 2001 earnings in the range of $0.85 to $0.90 per share. Our earnings estimate for the 2001 second quarter is a range of 21 cents to 23 cents per share."

AutoNation will discuss its first quarter results, earnings outlook and supporting assumptions in a conference call and audio Webcast on Wednesday, May 2, 2001, at 11 a.m. EDT. To listen to the call, dial 888-276-0005, or log on to 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 3 p.m. on May 2, 2001, through May 9, 2001, by dialing 800-475-6701, access code 582802, 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 about 31,000 people and owns and operates 375 automotive retail franchises in 17 states. Additional information is available at 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 March 31,
                                                     2001              2000

        Revenue                                    $4,887.0          $5,230.2

        Cost of operations                          4,149.2           4,478.1

        Gross margin                                  737.8             752.1

        Selling, general and
         administrative expenses                      549.3             556.0
        Depreciation                                   15.6              14.7
        Amortization                                   20.0              18.4

        Operating income                              152.9             163.0

        Floorplan interest expense                    (45.9)            (47.5)
        Other interest expense, net                    (9.6)             (8.2)
        Other income (expense)                         (0.1)             (3.8)

        Income from continuing operations
         before income taxes                           97.3             103.5

        Provision for income taxes                     37.4              38.8

        Net income from continuing
         operations                                    59.9              64.7

        Income from discontinued
         operations, net of income taxes
         and minority interest                          ---              (2.4)

        Net income                                    $59.9             $62.3

        Diluted earnings per share:
             Continuing operations                    $0.17             $0.18
             Discontinued operations                    ---             (0.01)
             Net income                               $0.17             $0.17

        Weighted average common and common
             equivalent shares outstanding            344.3             367.5

        Common shares outstanding                     336.0             361.1


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

                                           Three Months Ended March 31,
                                       2001         %      2000           %

    Operating Highlights:
    Revenue:
        New vehicle                  $2,867.7      58.7  $3,157.2        60.4
        Used vehicle                    977.1      20.0   1,003.3        19.2
        Parts and service               601.5      12.3     587.9        11.2
        F&I                             111.5       2.3     106.8         2.0
        Other                           329.2       6.7     375.0         7.2
                                     $4,887.0     100.0  $5,230.2       100.0

    Gross margin:
        New vehicle                    $239.0       8.3    $260.9         8.3
        Used vehicle                    107.4      11.0     116.4        11.6
        Parts and service               257.8      42.9     247.1        42.0
        F&I                             111.5     100.0     106.8       100.0
        Other                            22.1       6.7      20.9         5.6
                                        737.8      15.1     752.1        14.4

     S,G&A - Store                      509.4      10.4     509.4         9.7
     Store performance                  228.4       4.7     242.7         4.6

    S,G&A - Corporate                    39.9       0.8      46.6         0.9
    Depreciation                         15.6       0.3      14.7         0.3
    Amortization                         20.0       0.4      18.4         0.4
    Operating income                   $152.9       3.1    $163.0         3.1

    Retail vehicle sales:
           New                        109,000             126,000
           Used                        65,000              67,000
                                      174,000             193,000

    Gross margin per vehicle
     retailed:
           New                         $2,193              $2,071
           Used                        $1,652              $1,737
           F&I                           $641                $553

    Capital expenditures                $24.0               $26.5

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


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

                                             Three Months Ended March 31,
                                            2001       %        2000       %

    Revenue:
                New vehicle               $2,672.0    58.8   $3,004.2    61.0
                Used vehicle                 907.8    20.0      928.2    18.8
                Parts and service            557.1    12.3      546.7    11.1
                F&I                          103.9     2.3      101.1     2.1
                Other                        303.2     6.6      346.6     7.0
                                          $4,544.0   100.0   $4,926.8   100.0

    Gross margin:
                New vehicle                 $223.1     8.3     $249.5     8.3
                Used vehicle                 101.2    11.1      107.5    11.6
                Parts and service            238.8    42.9      229.8    42.0
                F&I                          103.9   100.0      101.1   100.0
                Other                         18.0     5.9       20.7     6.0
                                             685.0    15.1      708.6    14.4


     S,G&A - Store                           470.9    10.4      470.7     9.6

    Store performance                       $214.1     4.7     $237.9     4.8

    Retail vehicle sales:
                   New                     101,000            120,000
                   Used                     60,000             62,000
                                           161,000            182,000

    Gross margin per vehicle retailed:
                   New                      $2,209             $2,079
                   Used                     $1,687             $1,734
                   F&I                        $645               $555


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SOURCE AutoNation, Inc.

CONTACT: Jim Donahue of AutoNation, Inc., 954-769-7208, or donahuej@autonation.com/

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