* New Regional Structure Capitalizes on Previous Efficiency and Productivity Improvements * AutoNation Updates Third-Quarter and Full-Year GuidanceFORT LAUDERDALE, Fla., Sep 9, 2004 /PRNewswire-FirstCall via COMTEX/ -- AutoNation, Inc.
(NYSE: AN), America's largest automotive retailer, today announced plans to
implement a streamlined regional management structure that is designed to
generate improved efficiency and management effectiveness. This realignment
is the continuation of a four-year-long process to improve productivity and
earnings.
AutoNation will consolidate its ten districts into five regions, each led
by a regional president. Within each region, a market president will manage
each individual market. This combination of regional and market presidents
will allow the company to further capitalize on AutoNation's innovative
retailing systems, processes and technology.
"This new alignment is the continuation of our efforts to improve our
company's operating efficiency and capitalize on our infrastructure
investments," said Mike Jackson, AutoNation's chairman and chief executive
officer. "It's the next step in a plan that we've been laying out for the past
four years and will continue to improve on."
Since initiating its emphasis on productivity and cost reduction as a
focus for business improvement in 2000, the company has realized a 500-basis-
point cumulative reduction in SG&A as a percentage of total gross profit,
which has translated into savings of $150 million per year. The company
expects that the new regional management structure will generate approximately
$30 million (pre-tax) in incremental annual cost reductions, which would
constitute a portion of AutoNation's previously announced 200 basis point
targeted reductions in SG&A as a percentage of total gross profit over the
next few years. The company expects that the new regional management structure
will result in a one-time pre-tax charge to continuing operations of
approximately $5 million, primarily relating to severance.
"Our regional management structure is the natural evolution enabling us to
manage our stores and our markets with even greater focus and productivity,"
said Mike Maroone, AutoNation's president and chief operating officer. "We
view our regional presidents as the elite leaders at AutoNation who have
excelled in their previous leadership roles."
The company announced the following promotions: Jim Bender will become
president of the Florida region; Todd Maul will become president of the West
Central region; Jerry Heuer will become president of the California region;
Dan Agnew will become president of the Texas region; and Hank Phillips will
become president of the East Central region.
In addition, Senior Vice President and General Counsel Jon Ferrando will
assume oversight responsibilities for the company's human resources function
in addition to his current responsibilities.
Regarding the company's earnings guidance, Mr. Jackson said: "The
company's August and September business has been adversely affected by two
major hurricanes that have caused store closings and substantial disruption to
our business throughout Florida, which accounts for almost 30% of the
company's operating profits. We also are continuing to experience a
challenging retail sales environment. Considering these factors, we expect to
report third-quarter EPS from continuing operations in the range of $0.33 to
$0.35, including a one-time pre-tax charge of $5 million or $0.01 per share
(after-tax) associated with the new regional management structure. We now
anticipate full-year 2004 EPS from continuing operations in the range of $1.32
to $1.35." On July 20, 2004, the company provided guidance for EPS from
continuing operations of $.36 to $.38 for the third quarter and $1.35 to $1.40
for the full-year.
About AutoNation, Inc.
AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's
largest automotive retailer. Ranked #97 on the Fortune 500, AutoNation
employs approximately 28,000 people at 365 new vehicle franchises in 19
states. Additional information is available at http://www.autonation.com,
where consumers can find approximately 100,000 vehicles 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.
SOURCE AutoNation, Inc.
Marc Cannon of AutoNation, Inc., +1-954-769-3146 or
cannonm@autonation.com
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