View all news

AutoNation Reports First-Quarter Net Income From Continuing Operations of $0.33 Per Share

Apr. 28, 2005

* Record first-quarter operating income of $199 million, up 9%

* Repurchased $95 million in senior notes, reducing net income $.03 per share in the quarter

* Excluding $.03 per share impact of senior note repurchases, first- quarter adjusted EPS from continuing operations was $.36, up 13% from last year

FORT LAUDERDALE, Fla., April 28 /PRNewswire-FirstCall/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported 2005 first- quarter net income from continuing operations of $88 million or $0.33 per share, compared to year-ago net income from continuing operations of $89 million or $0.32 per share. During the quarter, the Company repurchased $95 million in face value of its senior notes, incurring repurchase costs of approximately $9 million after tax, or $.03 per share. Excluding this impact, the Company's first-quarter adjusted net income from continuing operations was $97 million or $0.36 per share, an increase of 13% over the prior year, primarily as a result of strong revenue growth in parts and service, gross margin increases in new and used vehicles, continued leverage of the Company's cost structure, and the repurchase of common stock, partially offset by higher floorplan interest expense due to rising rates.

First-quarter 2005 revenue totaled $4.6 billion, up slightly from a year ago. Operating income was a record for the first-quarter at $199 million, an increase of 9% compared to the prior year.

Commenting on first-quarter 2005 performance, AutoNation Chairman and Chief Executive Officer Mike Jackson said, "We are especially pleased with our ability to grow operating income by 9% and adjusted EPS by 13% in a challenging new vehicle environment. AutoNation's performance in the first- quarter was driven by an increase in new vehicle gross margins, greatly improved used vehicle pricing, and strong parts and service growth combined with our continued discipline in cost and inventory management and redeployment of cash. During the first-quarter, we took advantage of our financial flexibility to capitalize on an opportunity to retire a significant portion of our most expensive debt." At the end of first-quarter 2005, AutoNation's new vehicle inventory level was 60 days supply versus 67 days at the end of first-quarter 2004, representing a decline of 12,000 units, or 13%.

AutoNation will discuss these results and information regarding the Company's business and operating environment during a conference call and audio webcast this morning at 11:00 a.m. Eastern Time. To listen to the live conference call, dial (800) 762-6067 or listen to the audio webcast via the Internet at http://www.AutoNation.com by clicking on the "About Us" link, then clicking on "Investors" and then "Webcasts." A playback of the conference call will be available after 2:30 p.m. Eastern Time through May 5, 2005 by calling (800) 475-6701 (access code #778614) or via the Internet as outlined above.

About AutoNation, Inc.

AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's largest automotive retailer and a component of the Standard and Poor's 500 Index. In 2004 AutoNation was named America's Most Admired Automotive Retailer for the 4th year in a row. AutoNation has approximately 27,000 full- time employees and owns and operates 352 new vehicle franchises in 17 states. For additional information, please visit http://corp.AutoNation.com or http://www.AutoNation.com, where more than 100,000 vehicles are 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. This release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as net income and diluted earnings per share from continuing operations for the three-month periods ended March 31, 2005 and 2004, adjusted in each case to exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company's disclosure, provides a meaningful presentation of the Company's results from its core business operations excluding the impact of items not related to the Company's ongoing core business operations, and improves the period-to-period comparability of the Company's results from its core business operations.

                                AUTONATION, INC.
                     UNAUDITED CONSOLIDATED INCOME STATEMENTS
                      ($ in millions, except per share data)



                                                  Three Months Ended March 31,
                                                    2005               2004

         Revenue:
            New vehicle                           $2,705.8           $2,740.3
            Used vehicle                           1,091.6            1,075.3
            Parts and service                        653.9              618.4
            Finance and insurance                    147.9              148.3
            Other                                     21.1               23.6
         Total revenue                             4,620.3            4,605.9

         Cost of sales:
            New vehicle                            2,507.2            2,543.1
            Used vehicle                             976.2              970.0
            Parts and service                        370.8              347.9
            Other                                      9.1                9.7
         Total cost of sales                       3,863.3            3,870.7

         Gross profit                                757.0              735.2

         Selling, general and
          administrative expenses                    537.2              532.4
         Depreciation and amortization                20.5               18.7
         Other losses                                  0.1                1.8

         Operating income                            199.2              182.3

         Floorplan interest expense                  (25.8)             (16.9)
         Other interest expense                      (17.6)             (19.3)
         Other interest expense - senior
          note repurchases                           (14.4)                --
         Interest income                               1.5                0.7
         Other losses                                 (1.0)              (0.5)

         Income from continuing
          operations before income taxes             141.9              146.3

         Provision for income taxes                   53.6               57.8

         Net income from continuing
          operations                                  88.3               88.5

         Income (loss) from discontinued
          operations, net of income taxes              8.7               (1.2)


         Net income                                  $97.0              $87.3


         Diluted earnings per share:
            Continuing operations                    $0.33              $0.32
            Discontinued operations                  $0.03                 --

            Net income                               $0.36              $0.32

         Weighted average common and
          common equivalent shares
          outstanding                                270.3              275.7

         Common shares outstanding                   262.7              267.3



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




           Operating Highlights            Three Months Ended March 31,
                                     2005      2004   $ Variance   % Variance

         Revenue:
          New vehicle              $2,705.8  $2,740.3    $(34.5)      (1.3)
            Retail used vehicle       900.5     888.6      11.9        1.3
            Wholesale                 191.1     186.7       4.4        2.4
          Used vehicle              1,091.6   1,075.3      16.3        1.5
          Parts and service           653.9     618.4      35.5        5.7
          Finance and insurance       147.9     148.3      (0.4)      (0.3)
          Other                        21.1      23.6      (2.5)
                                   $4,620.3  $4,605.9     $14.4        0.3


         Gross profit:
          New vehicle                $198.6    $197.2      $1.4        0.7
            Retail used vehicle       112.2     104.6       7.6        7.3
            Wholesale                   3.2       0.7       2.5
          Used vehicle                115.4     105.3      10.1        9.6
          Parts and service           283.1     270.5      12.6        4.7
          Finance and insurance       147.9     148.3      (0.4)      (0.3)
          Other                        12.0      13.9      (1.9)
                                      757.0     735.2      21.8        3.0

         Selling, general and
          administrative expenses     537.2     532.4      (4.8)      (0.9)

         Depreciation and
          amortization                 20.5      18.7      (1.8)
         Other losses (gains)           0.1       1.8       1.7
          Operating income            199.2     182.3      16.9        9.3

         Floorplan interest expense   (25.8)    (16.9)     (8.9)
         Other interest expense       (17.6)    (19.3)      1.7
         Other interest expense -
          senior note repurchases     (14.4)       --     (14.4)
         Interest income                1.5       0.7       0.8
         Other income                  (1.0)     (0.5)     (0.5)
           Income from continuing
            operations before
            income taxes             $141.9    $146.3     $(4.4)      (3.0)

         Retail vehicle unit sales:
             New                     92,342    95,572    (3,230)      (3.4)
             Used                    60,300    61,673    (1,373)      (2.2)
                                    152,642   157,245    (4,603)      (2.9)

         Revenue per vehicle
          retailed:
             New                    $29,302   $28,673      $629        2.2
             Used                   $14,934   $14,408      $526        3.7

         Gross profit per vehicle
          retailed:
             New                     $2,151    $2,063       $88        4.3
             Used                    $1,861    $1,696      $165        9.7
             Finance and insurance     $969      $943       $26        2.8





           Operating Percentages     Three Months Ended
                                          March 31,
                                     % 2005    % 2004

         Revenue mix percentages:
          New vehicle                  58.6      59.5
          Used vehicle                 23.6      23.3
          Parts and service            14.2      13.4
          Finance and insurance         3.2       3.2
          Other                         0.4       0.6
                                      100.0     100.0

         Gross profit mix percentages:
          New vehicle                  26.2      26.8
          Used vehicle                 15.2      14.3
          Parts and service            37.4      36.8
          Finance and insurance        19.5      20.2
          Other                         1.7       1.9
                                      100.0     100.0

         Operating items as a
          percentage of revenue:
          Gross profit:
             New vehicle                7.3       7.2
             Used vehicle - retail     12.5      11.8
             Parts and service         43.3      43.7
             Total                     16.4      16.0
          Selling, general and
           administrative expenses     11.6      11.6
          Operating income              4.3       4.0

         Operating items as a
          percentage of total
          gross profit:
          Selling, general and
           administrative expenses     71.0      72.4
          Operating income             26.3      24.8


                                AUTONATION, INC.
                    UNAUDITED SUPPLEMENTARY DATA, Continued
                     ($ in millions, except per share data)




              Cash Flow Information         Three Months Ended March 31,
                                                2005            2004
          Capital expenditures,
           excluding property
           operating lease buy-outs            $20.5           $21.4
          Property operating lease buy-
           outs                                  $--           $77.7
          Stock repurchases                    $70.9           $58.1
          Acquisitions                          $2.1           $87.9
          Proceeds from exercises of
           stock options                       $23.0           $12.7
          Senior note repurchases             $106.0             $--


            Floorplan Assistance and Expense    Three Months Ended March 31,
                                                2005       2004    Variance


          Floorplan assistance (included
           in cost of sales)                   $27.4      $26.4       $1.0
          Floorplan interest expense           (25.8)     (16.9)      (8.9)

           Net floorplan benefit                $1.6       $9.5      $(7.9)


             Balance Sheet and Other Highlights

                                             March 31, December 31, March 31,
                                              2005        2004        2004


          Cash and cash equivalents            $28.7      $107.5      $34.5
          Inventory                         $2,856.5    $2,623.5   $3,040.2
          Floorplan notes payable           $2,655.7    $2,501.1   $2,868.4
          Non-vehicle debt                    $686.4      $812.6     $821.8
          Equity                            $4,322.4    $4,263.1   $3,990.4

          New days supply (industry
           standard of selling days,
           including fleet)                  60 days     53 days    67 days

          Used days supply (trailing 30
          days)                              39 days     37 days    38 days



         Brand Mix - New Vehicle Revenue %

                                            Three Months Ended March 31,
                                                 2005         2004

          Detroit 3:
             Ford (Ford, Lincoln-Mercury)        19.2         21.8
             General Motors
              (Chevrolet, Pontiac, Buick,
               Cadillac, GMC)                    17.1         19.1
             Chrysler (Chrysler, Jeep, Dodge)     9.1          9.2
               Detroit 3 total                   45.4         50.1

          Premium Luxury:
             Mercedes                             8.9          8.6
             BMW                                  5.0          3.9
             Lexus                                3.1          3.3
             Other premium luxury
              (Jaguar, Rolls Royce)               1.1          1.2
               Premium Luxury total              18.1         17.0

          Imports:
             Honda                                7.5          7.0
             Toyota                              12.2         11.2
             Nissan                              10.3          8.9
             Other imports                        6.5          5.8
               Import total                      36.5         32.9

                                                100.0        100.0


                                 AUTONATION, INC.
                     UNAUDITED SUPPLEMENTARY DATA, Continued
                      ($ in millions, except per share data)




         Comparable Basis Reconciliations
                                                Three Months Ended March 31,
                                                     Net      Diluted Earnings
                                                   Income        Per Share
                                                2005   2004     2005   2004

         As reported                           $97.0  $87.3    $0.36  $0.32

           Discontinued operations -
            store divestitures, net of
            income taxes                         3.0    1.2    $0.01     --
           Discontinued operations - tax
            adjustments                        (11.7)    --   $(0.04)    --

         From continuing operations, as
          reported                              88.3   88.5    $0.33  $0.32


           Senior note repurchases               8.7     --    $0.03



         Adjusted                               $97.0  $88.5   $0.36  $0.32







         Business Assumptions Impacting Long-term Average EPS Growth Target of
         10% to 12% Per Year:

         U.S. light vehicle annual unit sales  intensely competitive, high 16
                                               million units
         SGA % reduction (over 2005 and 2006)  approximately 110 bp
         (SGA % of gross profit less
          floorplan interest expense)


         Continued opportunistic redeployment  share repurchase, debt
          of cash flow                         reduction, capital expenditures
                                               and acquisitions

         Targeted return on incremental
         invested capital                      approximately 15% after-tax



    Note

The Company's parts and service departments provide reconditioning repair work for used vehicles acquired by the used vehicle department and minor preparatory work for new vehicles. The parts and service departments charge the new and used departments as if they were third parties in order to account for total activity performed by that department. The Company has determined that the revenue and related cost of sales of both new and used vehicles had not been reduced by the intracompany charge for such work. Commencing with the second quarter of 2004, the Company is making the adjustment and has revised amounts previously reported by reducing new and used vehicle revenue and cost of sales by the amount of the intracompany charge. The adjustments have no impact on total gross profit, operating income, income from continuing operations, net income, earnings per share, cash flows, or financial position for any period or their respective trends.

The effect of the adjustments was to reduce both revenue and cost of sales for new vehicles by $21 million for the three months ended March 31, 2004, respectively, and for used vehicles by $50 million for the same period, respectively. Accordingly, the Company's revenue-based performance metrics, such as revenue per vehicle, gross profit as a percent of revenue, and SG&A as a percent of revenue, also have been revised. These revisions do not have a material impact on the amounts for any period or respective trends.

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





                 Operating Highlights      Three Months Ended March 31,
                                         2005     2004   $ Variance % Variance


           Revenue:
               New vehicle             $2,644.5  $2,736.9   $(92.4)     (3.4)
                 Retail used vehicle      882.3     887.4     (5.1)     (0.6)
                 Wholesale                183.3     185.9     (2.6)     (1.4)
               Used vehicle             1,065.6   1,073.3     (7.7)     (0.7)
               Parts and service          642.2     617.4     24.8       4.0
               Finance and insurance      145.8     148.7     (2.9)     (2.0)
               Other                        8.3       8.7     (0.4)     (4.6)
                                       $4,506.4  $4,585.0   $(78.6)     (1.7)


           Gross profit:
               New vehicle               $193.8    $197.2    $(3.4)     (1.7)
                 Retail used vehicle      110.6     104.5      6.1       5.8
                 Wholesale                  2.6       0.7      1.9
               Used vehicle               113.2     105.2      8.0       7.6
               Parts and service          277.4     270.0      7.4       2.7
               Finance and insurance      145.8     148.7     (2.9)     (2.0)
               Other                        6.7       7.1     (0.4)     (5.6)
                                         $736.9    $728.2     $8.7       1.2




           Retail vehicle unit sales:
                  New                    90,809    95,429   (4,620)     (4.8)
                  Used                   59,510    61,567   (2,057)     (3.3)
                                        150,319   156,996   (6,677)     (4.3)

           Revenue per vehicle
            retailed:
                  New                   $29,122   $28,680     $442       1.5
                  Used                  $14,826   $14,414     $412       2.9

           Gross profit per vehicle
            retailed:
                  New                    $2,134    $2,066      $68       3.3
                  Used                   $1,859    $1,697     $162       9.5
                  Finance and insurance    $970      $947      $23       2.4





               Operating Percentages       Three Months Ended
                                              March  31,
                                          %  2005   %  2004

           Revenue mix percentages:
               New vehicle                   58.7      59.7
               Used vehicle                  23.6      23.4
               Parts and service             14.3      13.5
               Finance and insurance          3.2       3.2
               Other                          0.2       0.2
                                            100.0     100.0


           Gross profit mix percentages:
               New vehicle                   26.3      27.1
               Used vehicle                  15.4      14.4
               Parts and service             37.6      37.1
               Finance and insurance         19.8      20.4
               Other                          0.9       1.0
                                            100.0     100.0



           Operating items as a
            percentage of revenue:
               Gross Profit:
                  New vehicle                 7.3       7.2
                  Used vehicle - retail      12.5      11.8
                  Parts and service          43.2      43.7
                  Total                      16.4      15.9



                                AUTONATION, INC.
               UNAUDITED QUARTERLY CONSOLIDATED INCOME STATEMENTS
                      ($ in millions, except per share data)

   The following unaudited quarterly consolidated income statements for the
      periods presented have been adjusted to classify certain stores as
                discontinued operations as of March 31, 2005.



                                       Three Months Ended           Year Ended
                           March 31, June 30,  Sept. 30,  Dec. 31,   Dec. 31,
                              2004      2004      2004      2004       2004

       Revenue:
         New vehicle        $2,740.3  $2,995.4  $3,130.8  $2,962.2  $11,828.7
           Retail used
            vehicle            888.6     892.0     864.8     859.0    3,504.4
           Wholesale           186.7     202.6     212.9     196.1      798.3
         Used vehicle        1,075.3   1,094.6   1,077.7   1,055.1    4,302.7
         Parts and service     618.4     619.2     627.0     626.6    2,491.2
         Finance and
          insurance            148.3     155.5     160.2     151.6      615.6
         Other                  23.6      22.5      21.6      21.5       89.2
       Total revenue         4,605.9   4,887.2   5,017.3   4,817.0   19,327.4

       Cost of sales:
         New vehicle         2,543.1   2,783.9   2,913.2   2,745.2   10,985.4
           Retail used
            vehicle            784.0     790.7     768.2     762.4    3,105.3
           Wholesale           186.0     201.1     213.7     196.6      797.4
         Used vehicle          970.0     991.8     981.9     959.0    3,902.7
         Parts and service     347.9     345.3     355.3     352.3    1,400.8
         Other                   9.7      10.6      10.0       9.4       39.7
       Total cost of sales   3,870.7   4,131.6   4,260.4   4,065.9   16,328.6

       Gross profit            735.2     755.6     756.9     751.1    2,998.8

       Selling, general and
        administrative
        expenses               532.4     541.8     540.2     530.9    2,145.3
       Depreciation and
        amortization            18.7      19.7      20.2      24.1       82.7
       Other losses (gains)      1.8      (1.4)      0.9       2.7        4.0

       Operating income        182.3     195.5     195.6     193.4      766.8

       Floorplan interest
        expense                (16.9)    (20.7)    (20.9)    (22.4)     (80.9)
       Other interest
        expense                (19.3)    (19.7)    (18.4)    (19.6)     (77.0)
       Interest income           0.7       0.7       0.9       1.2        3.5
       Other losses             (0.5)     (0.9)     (1.8)     (1.7)      (4.9)

       Income from
        continuing
        operations before
        income taxes           146.3     154.9     155.4     150.9      607.5

       Provision for income
        taxes                   57.8      58.6      59.6      34.5      210.5


       Net income from
        continuing
        operations              88.5      96.3      95.8     116.4      397.0

       Income (loss) from
        discontinued
        operations, net of
        income taxes            (1.2)     (4.2)     (3.4)     45.4       36.6


       Net income              $87.3     $92.1     $92.4    $161.8     $433.6


       Diluted earnings per
        share:
         Continuing
          operations           $0.32     $0.35     $0.35     $0.43      $1.46
         Discontinued
          operations              --    $(0.02)   $(0.01)    $0.17      $0.13

         Net income            $0.32     $0.34     $0.34     $0.60      $1.59

       Weighted average
        common and common
        equivalent shares
        outstanding            275.7     273.2     270.6     270.3      272.5

       Common shares
        outstanding            267.3     267.7     264.4     264.3      264.3

       Retail vehicle unit
        sales:
         New                  95,572   105,256   109,004    98,438    408,270
         Used                 61,673    61,274    59,483    56,307    238,737

SOURCE  AutoNation, Inc.
    -0-                             04/28/2005
    /CONTACT:  Marc Cannon, AutoNation, Inc., +1-954-769-3146, or
cannonm@autonation.com/
    /Photo:   http://www.newscom.com/cgi-bin/prnh/20001017/AUTONATIONLOGO
              AP Archive:  http://photoarchive.ap.org
              PRN Photo Desk, photodesk@prnewswire.com/
    /Company News On-Call:  http://www.prnewswire.com/comp/750525.html /
    /Web site:  http://corp.autonation.com /
    (AN)

CO:  AutoNation, Inc.
ST:  Florida, Texas
IN:  AUT
SU:  ERN CCA MAV

AC-DS
-- FLTH001 --
8406 04/28/2005 06:50 EDT http://www.prnewswire.com
Categories: Press Releases
View all news