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Higher Gross Margin Across All Business Areas
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Benefits From Leveraging Cost Structure
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FY 2002 Outlook Raised to $1.12 to $1.15
FORT LAUDERDALE, Fla., April 23 /PRNewswire-FirstCall/ --
AutoNation, Inc. (NYSE: AN), America's largest retailer of both new and used
vehicles, today reported record first-quarter earnings per share of $0.28, or
net income of $91.7 million, that exceeded by 65% the Company's year-ago
earnings per share of $0.17, or net income of $59.9 million, as across-the-
board growth in gross margin, lower inventory-carrying costs, a leveraged cost
structure and the elimination of goodwill amortization drove results.
Commenting on the first-quarter performance, Mike Jackson, AutoNation's
Chief Executive Officer said, "We're extremely pleased with our record
quarter. We increased our gross margin, leveraged our cost structure and
demonstrated again the resiliency of our automotive retail business model.
Clearly, our focus on higher margins and improved operations is generating
higher cash flow, which allows us to pursue opportunities for new acquisitions
and share repurchases."
The record earnings for the quarter ended March 31, 2002 occurred as the
overall U.S. market for new vehicles declined, leading to Company revenue of
$4.8 billion, down from $4.9 billion a year ago. However, total gross margin
for the period increased to $721.7 million, up 4.2% from $692.5 million a year
ago, as gross margin grew for used vehicles, parts and service, finance and
insurance, and new vehicles, which benefited from a $19 million reduction in
inventory-carrying costs. As a result, gross margin as a percentage of total
revenue rose to 15.2%, up 100 basis points from 14.2% a year ago.
Selling, general and administrative expenses (SG&A) as a percentage of
total gross margin improved to 75.9% from 79.4% as initiatives aimed at
creating operating efficiencies allowed the Company to further leverage its
cost structure. Additionally, approximately $14 million ($0.04 per share) of
after-tax goodwill amortization was eliminated in accordance with new
accounting rules that went into effect on January 1, 2002. On a comparable
basis, after eliminating goodwill amortization from 2001 results, first-
quarter earnings per share rose 33% or $0.07 ($0.28 vs.$0.21).
Other Company highlights in the first quarter included:
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Earnings before interest, taxes, depreciation and amortization (EBITDA)
of $173.2 million, up 22% from $142.5 million a year ago and a
first-quarter record.
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The acquisitions of Chicago-based Laurel Group, which operates seven
import/luxury new vehicle franchises, and Hudiburg Chevrolet in Fort
Worth, Texas. Their estimated combined annual revenue is $440 million.
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The repurchase of 2.8 million shares of common stock for $35.9 million
at an average price of $12.87, leaving a board-authorized amount as of
March 31, 2002 of $224.3 million for future repurchases.
Looking ahead, Mr. Jackson said, "While the U.S. new vehicle market is off
from a year ago, stronger-than-expected consumer demand in the first quarter
suggests 2002 should result in industry sales of over 16 million vehicles.
AutoNation now anticipates it will achieve 2002 full-year earnings per share
in the range of $1.12 to $1.15, and 2002 second-quarter earnings per share of
$0.28 to $0.30."
AutoNation will discuss its first-quarter results, its earnings outlook
and supporting assumptions later this morning during a 9:00 a.m., Eastern
Time, conference call. To listen to the call, dial 877-260-8896 or listen via
the audio webcast offered at www.autonation.com by clicking on the "Corporate
Site" link and then clicking on the webcast icon. A playback of the
conference call will be available on April 23rd after 4:30 p.m., Eastern Time,
through April 30, 2002. The playback can be accessed by calling 800-475-6701
(access code 630982) or by visiting the "Audio Presentation" section of the
Investor Relations page of AutoNation's corporate site.
ABOUT AUTONATION, INC.
AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's
largest retailer of both new and used vehicles. Ranked #101 on the 2002
Fortune 500 survey of America's largest corporations, AutoNation employs
approximately 30,000 people and owns and operates 373 automotive retail
franchises in 17 states. For additional information, please visit
www.autonation.com, where consumers can find more than 100,000 vehicles
available for sale.
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 earnings outlook.
AUTONATION, INC.
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS
(In millions, except per share data)
Three Months Ended March 31,
2002 2001
Revenue $4,750.7 $4,887.6
Cost of operations 4,029.0 4,195.1
Gross margin 721.7 692.5
Selling, general and
administrative expenses 548.1 550.1
Depreciation 15.7 15.6
Amortization 0.6 20.0
Loan and lease underwriting
losses (income), net (0.2) 0.6
Restructuring and impairment
recoveries, net -- (0.8)
Other losses 0.4 --
Operating income 157.1 107.0
Other interest expense, net (8.4) (9.6)
Other expense (0.2) (0.1)
Income before income taxes 148.5 97.3
Provision for income taxes 56.8 37.4
Net income $91.7 $59.9
Diluted earnings per share $0.28 $0.17
Weighted average common and
common equivalent shares outstanding 325.9 344.3
Common shares outstanding 320.8 336.0
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except gross margin per vehicle data)
Operating Highlights
Three Months Ended March 31,
2002 2001 $Variance %Variance
Revenue:
New vehicle $2,813.1 $2,867.7 $(54.6) (1.9)
Used vehicle 947.0 977.1 (30.1) (3.1)
Parts and service 611.9 601.5 10.4 1.7
F&I 121.1 111.5 9.6 8.6
Other 257.6 329.8 (72.2) (21.9)
$4,750.7 $4,887.6 $(136.9) (2.8)
Gross margin:
New vehicle $203.7 $193.5 $10.2 5.3
Used vehicle 108.5 107.0 1.5 1.4
Parts and service 264.8 257.8 7.0 2.7
F&I 121.1 111.5 9.6 8.6
Other 23.6 22.7 0.9 4.0
721.7 692.5 29.2 4.2
S,G&A - Store 513.0 509.4 (3.6) (0.7)
Store performance 208.7 183.1 25.6 14.0
S,G&A - Corporate 35.1 40.7 5.6 13.8
Depreciation 15.7 15.6 (0.1) --
Amortization 0.6 20.0 19.4 --
Loan and lease underwriting
losses (income), net (0.2) 0.6 0.8 --
Restructuring and impairment
recoveries, net -- (0.8) (0.8) --
Other losses 0.4 -- (0.4) --
Operating income $157.1 $107.0 $50.1 46.8
Retail vehicle sales:
New 104,000 109,000 (5,000) (4.6)
Used 63,000 65,000 (2,000) (3.1)
167,000 174,000 (7,000) (4.0)
Gross margin per vehicle retailed:
New $1,959 $1,775 $184 10.4
Used $1,722 $1,646 $76 4.6
F&I $725 $641 $84 13.1
Operating Percentages
Three Months Ended March 31,
%2002 %2001
Revenue mix percentages:
New vehicle 59.2 58.7
Used vehicle 19.9 20.0
Parts and service 12.9 12.3
F&I 2.6 2.3
Other 5.4 6.7
100.0 100.0
Operating items as a percentage
of revenue:
Gross margin:
New vehicle 7.2 6.7
Used vehicle 11.5 11.0
Parts and service 43.3 42.9
F&I 100.0 100.0
Other 9.2 6.9
Total 15.2 14.2
S,G&A - Store 10.8 10.4
Store performance 4.4 3.7
S,G&A - Corporate 0.7 0.8
Operating income 3.3 2.2
Net income 1.9 1.2
Other operating items as a percentage
of total gross margin:
S,G&A - Store 71.1 73.6
Store performance 28.9 26.4
S,G&A - Corporate 4.9 5.9
Total S,G&A 75.9 79.4
Operating income 21.8 15.5
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions)
Cash Flow Information Three Months Ended March 31,
2002 2001
EBITDA $173.2 $142.5
Capital expenditures $28.7 $24.0
Stock repurchases $35.9 $98.2
Acquisitions $127.7 $22.0
Floorplan Assistance and Expense
Three Months Ended March 31,
2002 % 2001 %
New vehicle gross margin,
before floorplan $192.5 6.8 $201.2 7.0
Floorplan assistance 29.4 1.0 37.9 1.3
Floorplan interest expense (18.2) (0.6) (45.6) (1.6)
New vehicle gross
margin, as presented $203.7 7.2 $193.5 6.7
Balance Sheet and Other Highlights
March 31, December 31, March 31,
2002 2001 2001
Cash and cash equivalents $105.5 $128.1 $85.4
Inventory $2,363.1 $2,178.5 $2,602.7
Floorplan notes payable $2,031.0 $1,900.7 $2,294.6
Non-vehicle debt $653.5 $655.2 $832.2
Equity $3,903.0 $3,827.9 $3,803.4
Days supply
(trailing 30 days):
New 58 days 61 days 63 days
Used 37 days 35 days 35 days
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except gross margin per vehicle data)
Operating Highlights
Three Months Ended March 31,
2002 2001 $Variance %Variance
Revenue:
New vehicle $2,751.6 $2,808.8 $(57.2) (2.0)
Used vehicle 929.4 956.9 (27.5) (2.9)
Parts and service 600.9 588.6 12.3 2.1
F&I 120.6 109.5 11.1 10.1
Other 298.9 314.7 (15.8) (5.0)
$4,701.4 $4,778.5 $(77.1) (1.6)
Gross margin:
New vehicle $197.7 $189.8 $7.9 4.2
Used vehicle 105.6 106.6 (1.0) (0.9)
Parts and service 259.6 252.0 7.6 3.0
F&I 120.6 109.5 11.1 10.1
Other 19.6 18.9 0.7 3.7
703.1 676.8 26.3 3.9
S,G&A - Store 499.2 495.7 (3.5) (0.7)
Store performance 203.9 181.1 22.8 12.6
Retail vehicle sales:
New 102,000 107,000 (5,000) (4.7)
Used 62,000 63,000 (1,000) (1.6)
164,000 170,000 (6,000) (3.5)
Gross margin per
vehicle retailed:
New $1,938 $1,774 $164 9.2
Used $1,703 $1,692 $11 0.7
F&I $735 $644 $91 14.1
Operating Percentages
Three Months Ended March 31,
%2002 %2001
Revenue mix percentages:
New vehicle 58.5 58.8
Used vehicle 19.8 20.0
Parts and service 12.8 12.3
F&I 2.6 2.3
Other 6.3 6.6
100.0 100.0
Operating items as a percentage of revenue:
Gross margin:
New vehicle 7.2 6.8
Used vehicle 11.4 11.1
Parts and service 43.2 42.8
F&I 100.0 100.0
Other 6.6 6.0
Total 15.0 14.2
S,G&A - Store 10.6 10.4
Store performance 4.3 3.8
Other operating items as a
percentage of total gross margin:
S,G&A - Store 71.0 73.2
Store performance 29.0 26.8
SOURCE AutoNation, Inc.
CONTACT: Oscar Suris, of AutoNation, Inc., +1-954-769-3576, or
[email protected]