- AutoNation remained solidly profitable despite a distressed industry
environment
- Cumulative debt reduction of approximately $1.25 billion since January
1, 2008
- AutoNation exceeded $200 million annualized cost savings objective
FORT LAUDERDALE, Fla., April 23 /PRNewswire-FirstCall/ -- AutoNation, Inc.
(NYSE: AN), America's largest automotive retailer, today reported 2009 first
quarter net income from continuing operations of $49 million or $0.27 per
share, compared to year-ago net income from continuing operations of $56
million or $0.31 per share. In the quarter, the Company had a net benefit
from certain items of $9 million after-tax or $0.04 per share, including a
gain on the purchase of the Company's senior notes and a net gain on asset
sales and dispositions, partially offset by property impairments. After
adjusting for these items as disclosed in the attached financial tables, net
income from continuing operations for the 2009 first quarter was $40 million
or $0.23 per share.
First quarter 2009 revenue totaled $2.5 billion, compared to $3.8 billion
in the year-ago period, driven primarily by lower vehicle sales. In the first
quarter, industry new vehicle U.S. retail sales declined approximately 46%,
according to CNW Research. AutoNation new vehicle unit sales declined 43%.
Commenting on the first quarter, Mike Jackson, Chairman and Chief
Executive Officer, said, "We are very pleased with the performance of
AutoNation as we remained solidly profitable during the first quarter even
with a U.S. SAAR near 9 million new vehicle units, the lowest in nearly 30
years. Our operating discipline, the hard work of our associates and savings
generated from our $200 million cost reduction program led to sequential
improvement from the fourth quarter 2008."
AutoNation has three operating segments: Domestic, Import, and Premium
Luxury. The Domestic segment is comprised of stores that sell vehicles
manufactured by General Motors, Ford, and Chrysler; the Import segment is
comprised of stores that sell vehicles manufactured primarily by Toyota,
Honda, and Nissan; and the Premium Luxury segment is comprised of stores that
sell vehicles manufactured primarily by Mercedes, BMW, and Lexus.
-- Domestic - Domestic segment income for the first quarter of 2009 was
$15 million compared to year-ago segment income of $38 million. First
quarter Domestic retail new vehicle unit sales declined 47%.
-- Import - Import segment income for the first quarter of 2009 was $30
million compared to year-ago segment income of $56 million. First
quarter Import retail new vehicle unit sales declined 45%.
-- Premium Luxury - Premium Luxury segment income for the first quarter
of 2009 was $41 million compared to year-ago segment income of $51
million. First quarter Premium Luxury retail new vehicle unit sales
declined 31%.
Jackson added, "During the first quarter AutoNation reduced debt by
approximately $500 million, for a cumulative debt reduction of approximately
$1.25 billion, including $635 million of non-vehicle debt, since January 1,
2008. As a result of these actions and our financial performance we remained
in compliance with all of the financial covenants in our debt agreements and
improved our leverage ratio to 2.35 as of March 31, 2009. Our liquidity
remains strong as we ended the quarter with approximately $400 million of cash
and revolver availability." Looking forward, Jackson also stated, "Although
first quarter industry sales were lower than expectations, we agree with
industry projections that sales rates will improve in the second half of this
year."
The first quarter conference call may be accessed at 11:00 a.m. Eastern
Time by phone at 888-769-8515 (pass code: AutoNation). The webcast may be
accessed by the Internet (audio webcast) at http://www.AutoNation.com
"Investors Relations" and then "Webcasts." On the "Webcasts" page, there will
be a link for the first quarter webcast. A playback of the event will be
available after 1:00 pm Eastern Time April 23, 2009 through April 30, 2009 by
calling 866-375-1051 (pass code: 75300).
About AutoNation, Inc.
AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's
largest automotive retailer. AutoNation owns approximately 300 new vehicle
franchises in 15 states. For additional information, please visit
http://corp.AutoNation.com or www.AutoNation.com, where more than 70,000
vehicles are available for sale along with AutoNation's E-Vehicle program.
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.
NON-GAAP FINANCIAL MEASURES
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, adjusted 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 CONDENSED CONSOLIDATED INCOME STATEMENTS
($ in millions, except per share data)
Three Months
Ended March 31,
2009 2008
---- ----
Revenue:
New vehicle $1,213.9 $2,125.5
Used vehicle 612.7 934.4
Parts and service 554.4 622.4
Finance and insurance, net 78.7 140.2
Other 13.4 16.8
---- ----
Total revenue 2,473.1 3,839.3
------- -------
Cost of sales:
New vehicle 1,138.3 1,983.9
Used vehicle 547.1 853.8
Parts and service 311.0 351.2
Other 6.1 7.2
--- ---
Total cost of sales 2,002.5 3,196.1
------- -------
Gross profit 470.6 643.2
Selling, general and
administrative expenses 364.6 474.6
Depreciation and amortization 20.7 22.7
Other expenses (income), net (3.5) 0.3
---- ---
Operating income 88.8 145.6
Floorplan interest expense (10.1) (23.9)
Other interest expense (11.8) (26.8)
Gain on senior note repurchases 11.9 -
Interest income 0.3 0.5
Other losses, net (1.6) (1.7)
---- ----
Income from continuing
operations before income taxes 77.5 93.7
Income tax provision 28.9 38.0
---- ----
Net income from continuing
operations 48.6 55.7
Loss from discontinued
operations, net of income taxes (14.0) (5.0)
----- ----
Net income $34.6 $50.7
===== =====
Diluted earnings (loss) per share:
Continuing operations $0.27 $0.31
Discontinued operations $(0.08) $(0.03)
Net income $0.20 $0.28
Weighted average common shares
outstanding 177.0 180.6
Common shares outstanding, net
of treasury stock, at March 31 177.1 178.5
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended March 31,
-------------------- ------------------------------
2009 2008 $ Variance % Variance
---- ---- ---------- ----------
Revenue:
New vehicle $1,213.9 $2,125.5 $(911.6) (42.9)
Retail used vehicle 544.4 775.5 (231.1) (29.8)
Wholesale 68.3 158.9 (90.6) (57.0)
---- ----- -----
Used vehicle 612.7 934.4 (321.7) (34.4)
----- ----- ------
Parts and service 554.4 622.4 (68.0) (10.9)
Finance and insurance, net 78.7 140.2 (61.5) (43.9)
Other 13.4 16.8 (3.4)
---- ---- ----
Total revenue $2,473.1 $3,839.3 $(1,366.2) (35.6)
======== ======== =========
Gross profit:
New vehicle $75.6 $141.6 $(66.0) (46.6)
Retail used vehicle 63.6 80.9 (17.3) (21.4)
Wholesale 2.0 (0.3) 2.3
--- ---- ---
Used vehicle 65.6 80.6 (15.0) (18.6)
---- ---- -----
Parts and service 243.4 271.2 (27.8) (10.3)
Finance and insurance 78.7 140.2 (61.5) (43.9)
Other 7.3 9.6 (2.3)
--- --- ----
Total gross profit 470.6 643.2 (172.6) (26.8)
Selling, general and
administrative expenses 364.6 474.6 110.0 23.2
Depreciation and amortization 20.7 22.7 2.0
Other expenses, net (3.5) 0.3 3.8
---- --- ---
Operating income (loss) 88.8 145.6 (56.8)
Floorplan interest expense (10.1) (23.9) 13.8
Other interest expense (11.8) (26.8) 15.0
Gain on senior note
repurchases 11.9 - 11.9
Interest income 0.3 0.5 (0.2)
Other losses, net (1.6) (1.7) 0.1
---- ---- ---
Income from continuing
operations before income
taxes $77.5 $93.7 $(16.2)
===== ===== ======
Retail vehicle unit sales:
New 39,220 69,254 (30,034) (43.4)
Used 35,329 48,351 (13,022) (26.9)
------ ------ -------
74,549 117,605 (43,056) (36.6)
====== ======= =======
Revenue per vehicle retailed:
New $30,951 $30,691 $260 0.8
Used $15,409 $16,039 $(630) (3.9)
Gross profit per vehicle retailed:
New $1,928 $2,045 $(117) (5.7)
Used $1,800 $1,673 $127 7.6
Finance and insurance $1,056 $1,192 $(136) (11.4)
Three Months
Ended March
Operating Percentages 31,
--------------------- -------------
2009(%) 2008(%)
---- ----
Revenue mix percentages:
New vehicle 49.1 55.4
Used vehicle 24.8 24.3
Parts and service 22.4 16.2
Finance and insurance, net 3.2 3.7
Other 0.5 0.4
--- ---
100.0 100.0
===== =====
Gross profit mix percentages:
New vehicle 16.1 22.0
Used vehicle 13.9 12.5
Parts and service 51.7 42.2
Finance and insurance 16.7 21.8
Other 1.6 1.5
--- ---
100.0 100.0
===== =====
Operating items as a percentage of revenue:
Gross profit:
New vehicle 6.2 6.7
Used vehicle - retail 11.7 10.4
Parts and service 43.9 43.6
Total 19.0 16.8
Selling, general and administrative expenses 14.7 12.4
Operating income 3.6 3.8
Operating items as a percentage of total gross
profit:
Selling, general and administrative expenses 77.5 73.8
Operating income 18.9 22.6
Segment Operating Highlights Three Months Ended March 31,
---------------------------- ----------------------------
2009 2008 $ Variance % Variance
---- ---- ---------- ----------
Revenue:
Domestic $850.0 $1,381.8 $(531.8) (38.5)
Import 892.6 1,461.7 (569.1) (38.9)
Premium luxury 704.0 962.5 (258.5) (26.9)
Corporate and other 26.5 33.3 (6.8) (20.4)
---- ---- ----
Total revenue $2,473.1 $3,839.3 $(1,366.2) (35.6)
======== ======== =========
*Segment income (loss)
Domestic $15.1 $38.3 $(23.2) (60.6)
Import 29.5 55.5 (26.0) (46.8)
Premium luxury 40.9 50.7 (9.8) (19.3)
Corporate and other (6.8) (22.8) 16.0
---- ----- ----
Total segment income 78.7 121.7 (43.0)
Add: Floorplan interest expense 10.1 23.9 (13.8)
----- ------ ------
Operating income $88.8 $145.6 $(56.8)
===== ====== ======
* Segment income (loss) is defined as operating income net of floorplan
interest expense
Retail new vehicle unit sales:
Domestic 12,081 22,666 (10,585) (46.7)
Import 20,019 36,222 (16,203) (44.7)
Premium luxury 7,120 10,366 (3,246) (31.3)
----- ------ ------
39,220 69,254 (30,034) (43.4)
====== ====== =======
Brand Mix - New Vehicle Retail Units Sold
-----------------------------------------
Three Months
Ended March
31,
-------------
2009(%) 2008(%)
---- ----
Domestic:
Ford, Lincoln-Mercury 14.9 14.8
Chevrolet, Pontiac, Buick, Cadillac, GMC 11.6 13.1
Chrysler, Jeep, Dodge 4.3 4.8
--- ---
Domestic total 30.8 32.7
---- ----
Import:
Honda 13.7 13.1
Toyota 20.0 21.2
Nissan 10.5 12.5
Other imports 6.8 5.5
--- ---
Import total 51.0 52.3
---- ----
Premium Luxury:
Mercedes 8.5 6.6
BMW 5.1 4.1
Lexus 2.8 3.0
Other premium luxury (Land Rover, Porsche) 1.8 1.3
--- ---
Premium Luxury total 18.2 15.0
---- ----
100.0 100.0
===== =====
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Capital Expenditures / Stock and Debt Three Months
Repurchases Ended March 31,
-------------------------------------- --------------
2009 2008
---- ----
Capital expenditures $20.4 $23.4
Acquisitions $0.2 $29.4
Proceeds from exercises of stock
options $0.2 $1.0
Senior note repurchases (aggregate
principal) $72.0 $-
Stock repurchases:
Aggregate purchase price $- $27.8
Shares repurchased (in millions) - 1.9
Three Months Ended
Floorplan Assistance and Expense March 31,
-------------------------------- -------------------
2009 2008 Variance
---- ---- ----------
Floorplan assistance earned (included in
cost of sales) $10.4 $20.1 $(9.7)
Floorplan interest expense (new vehicles) (9.6) (23.8) 14.2
---- ----- ----
Net inventory carrying benefit (cost) $0.8 $(3.7) $4.5
==== ===== ====
Balance Sheet and Other Highlights
----------------------------------
March 31, December 31, March 31,
2009 2008 2008
---------- -------- ----------
Cash and cash
equivalents $62.0 $110.5 $35.1
Inventory $1,553.4 $1,805.8 $2,264.3
Total floorplan notes
payable $1,504.4 $1,858.2 $2,105.8
Non-vehicle debt $1,140.9 $1,258.9 $1,698.6
Equity $2,236.7 $2,198.1 $3,501.0
New days supply (industry
standard of selling
days, including
fleet) 66 days 83 days 57 days
Used days supply
(trailing
30 days) 36 days 30 days 40 days
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Comparable Basis Reconciliations*
---------------------------------
Three Months Ended March 31,
---------------------------
Diluted
Earnings
Net Income Per Share
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
As reported $34.6 $50.7 $0.20 $0.28
Discontinued operations, net of
income taxes 14.0 5.0 $0.08 $0.03
---- ---
From continuing operations, as
reported 48.6 55.7 $0.27 $0.31
Gain on senior note repurchases (7.4) - $(0.04) $-
Net gain on asset sales and
dispositions (5.9) - $(0.03) $-
Property impairments 4.8 - $0.03 $-
--- -
Adjusted $40.1 $55.7 $0.23 $0.31
===== =====
* Please refer to the "Non-GAAP Financial Measures" section of the Press
Release.
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended March 31,
-------------------- ----------------------------
2009 2008 $ Variance % Variance
---- ---- ---------- ----------
Revenue:
New vehicle $1,203.7 $2,115.1 $(911.4) (43.1)
Retail used vehicle 541.0 770.0 (229.0) (29.7)
Wholesale 67.2 156.8 (89.6) (57.1)
---- ----- -----
Used vehicle 608.2 926.8 (318.6) (34.4)
Parts and service 550.3 613.7 (63.4) (10.3)
Finance and insurance, net 78.3 139.5 (61.2) (43.9)
Other 12.8 16.2 (3.4) (21.0)
---- ---- ----
Total revenue $2,453.3 $3,811.3 $(1,358.0) (35.6)
======== ======== =========
Gross profit:
New vehicle $74.9 $141.1 $(66.2) (46.9)
Retail used vehicle 63.1 80.4 (17.3) (21.5)
Wholesale 2.0 (0.2) 2.2
--- ---- ---
Used vehicle 65.1 80.2 (15.1) (18.8)
Parts and service 241.7 268.5 (26.8) (10.0)
Finance and insurance 78.3 139.5 (61.2) (43.9)
Other 7.1 9.5 (2.4)
--- --- ----
Total gross profit $467.1 $638.8 $(171.7) (26.9)
====== ====== =======
Retail vehicle unit sales:
New 39,021 68,887 (29,866) (43.4)
Used 35,149 47,947 (12,798) (26.7)
------ ------ -------
74,170 116,834 (42,664) (36.5)
====== ======= =======
Revenue per vehicle retailed:
New $30,847 $30,704 $143 0.5
Used $15,392 $16,059 $(667) (4.2)
Gross profit per vehicle retailed:
New $1,919 $2,048 $(129) (6.3)
Used $1,795 $1,677 $118 7.0
Finance and insurance $1,056 $1,194 $(138) (11.6)
Three Months
Ended March
Operating Percentages 31,
--------------------- -------------
2009(%) 2008(%)
---- ----
Revenue mix percentages:
New vehicle 49.1 55.5
Used vehicle 24.8 24.3
Parts and service 22.4 16.1
Finance and insurance, net 3.2 3.7
Other 0.5 0.4
--- ---
100.0 100.0
===== =====
Gross profit mix percentages:
New vehicle 16.0 22.1
Used vehicle 13.9 12.6
Parts and service 51.7 42.0
Finance and insurance 16.8 21.8
Other 1.6 1.5
--- ---
100.0 100.0
===== =====
Operating items as a percentage of revenue:
Gross Profit:
New vehicle 6.2 6.7
Used vehicle - retail 11.7 10.4
Parts and service 43.9 43.8
Total 19.0 16.8
AUTONATION, INC.
KEY CREDIT AGREEMENT COVENANT COMPLIANCE CALCULATIONS
March 31, 2009
--------------
($ millions)
------------------------------------------------
Income Statement information for the last
twelve months (April 1, 2008 - March 31, 2009):
------------------------------------------------
Net income (loss) from continuing operations $(1,219.6)
Floorplan and other interest expense 144.4
Income tax provision (benefit) (206.1)
Depreciation and amortization 86.1
Stock-based compensation expense (SFAS
No. 123R) 21.0
Impairment charges (including goodwill,
franchise rights, and long-lived assets) 1,761.4
-------
EBITDA 587.2
Floorplan interest expense (70.0)
-----
Adjusted EBITDA $517.2
======
---------------------
As of March 31, 2009:
---------------------
Funded indebtedness (primarily comprised of
current and long-term debt and letters of
credit) $1,213.8
Vehicle secured indebtedness (floorplan
payables) 1,504.4
-------
Funded indebtedness including floorplan 2,718.2
Shareholders' equity 2,237.4
-------
Total capitalization including floorplan $4,955.6
========
----------------------------------------
Ratio of funded indebtedness/
Adjusted EBITDA.................... 2.35
less
Covenant................................ than 3.00
---------------------------------------- ----- ----
----------------------------------------
Ratio of funded indebtedness including
floorplan/
Total capitalization including
floorplan.............. 54.9%
less
Covenant................................ than 65.0%
---------------------------------------- ----- ----
SOURCE AutoNation, Inc.
CONTACT: Marc Cannon
+1-954-769-3146
cannonm@autonation.com
or
Investor Contact:
Derek Fiebig
+1-954-769-7342
fiebigd@autonation.com
both
of AutoNation, Inc.