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Press release from PR Newswire

AutoNation Reports All-Time Record Quarter and All-Time Record Full Year Results

Thursday, January 26, 2012

AutoNation Reports All-Time Record Quarter and All-Time Record Full Year Results07:00 EST Thursday, January 26, 2012FORT LAUDERDALE, Fla., Jan. 26, 2012 /PRNewswire/ -- Fourth Quarter 2011 ResultsAdjusted EPS from continuing operations was an all-time record(1) $0.51, up 13% compared to fourth quarter 2010 EPS from continuing operations of $0.45 (no adjusting items in the year-ago period)On a GAAP basis, fourth quarter 2011 EPS from continuing operations was $0.50 Operating income of $144 million, an increase of 7% compared to the year-ago periodTotal revenue up 13% compared to the year-ago period; revenue for all major categories - new vehicles, used vehicles, parts and service, and finance and insurance - improved compared to the fourth quarter of 2010.Full Year 2011 ResultsAdjusted EPS from continuing operations was an all-time record $1.94, up 24% compared to full year 2010 adjusted EPS from continuing operations of $1.56On a GAAP basis, full year EPS from continuing operations was $1.93 in 2011 compared to $1.48 in 2010Operating income of $572 million, an increase of 15% compared to 2010 Total revenue up 11% compared to 2010; revenue for all major categories - new vehicles, used vehicles, parts and service, and finance and insurance - improved compared to 2010.AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported 2011 fourth quarter adjusted net income from continuing operations of $71 million, or $0.51 per share, compared to net income from continuing operations of $68 million, or $0.45 per share, for the same period in the prior year, a 13% improvement on a per-share basis.  Adjusted net income from continuing operations for the fourth quarter of 2011 excludes debt refinancing costs of $1 million after-tax, or $0.01 per share, as disclosed in the attached financial tables.  On a GAAP basis, fourth quarter 2011 net income from continuing operations was $70 million, or $0.50 per share.  There were no adjusting items for the fourth quarter of 2010.(Logo:  http://photos.prnewswire.com/prnh/20001017/AUTONATIONLOGO )2011 fourth quarter revenue totaled $3.7 billion, compared to $3.2 billion in the year-ago period, an increase of 13%, driven primarily by stronger retail new and used vehicle revenue.  AutoNation's new vehicle unit sales increased 10% on a same store basis and were up 13% overall. Based on CNW Research data, in the fourth quarter, total U.S. industry new retail vehicle unit sales increased 7%.2011 fourth quarter gross profit totaled $579 million, compared to $545 million in the year-ago period, an increase of 6%, primarily due to an increase in retail new vehicle gross profit, as well as an increase in finance and insurance gross profit. Gross profit per new vehicle retailed was favorably impacted by $34 in the fourth quarter of 2011 and by $247 in the fourth quarter of 2010 related to additional incentives primarily on premium luxury vehicles previously sold. On a per-vehicle basis, gross profit per new vehicle retailed increased $52 or 2%, despite the decrease in additional incentives compared to the year-ago period.  Finance and insurance gross profit per vehicle retailed increased $63 or 5%, as compared to the year-ago period.Mike Jackson, Chairman and Chief Executive Officer, said, "We continued to deliver impressive results, setting another record for the highest ever annual and quarterly adjusted EPS from continuing operations.  We are pleased with our strong year-over-year growth across all areas of our business."  Mr. Jackson concluded, "We are looking forward to the continued recovery in auto retail, buoyed by accelerated product offerings, robust consumer credit and strong replacement demand.  We expect industry new vehicle sales to be approximately 14 million units in 2012."During the fourth quarter of 2011, AutoNation repurchased 6.3 million shares for an aggregate purchase price of $217.8 million, and, from January 1, 2012 through January 25, 2012, AutoNation repurchased 3.5 million shares for an aggregate purchase price of $122.1 million. AutoNation today announced that the Board of Directors authorized the repurchase of up to an additional $250 million of AutoNation common stock. With the increased authorization, as of January 25, 2012, AutoNation had approximately $278 million remaining Board authorization for share repurchase. As of January 25, 2012, there was approximately 132 million shares outstanding.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. Segment results for the fourth quarter were as follows:Domestic - Domestic segment income(2) was $44 million compared to year-ago segment income of $37 million.  Fourth quarter Domestic retail new vehicle unit sales increased 21%.Import - Import segment income(2) was $53 million compared to year-ago segment income of $46 million.  Fourth quarter Import retail new vehicle unit sales increased 3%.Premium Luxury - Premium Luxury segment income(2) was $70 million compared to year-ago segment income of $66 million.  Fourth quarter Premium Luxury retail new vehicle unit sales increased 28%.For the full year ended December 31, 2011, the Company reported adjusted net income from continuing operations of $286 million, or $1.94 per share, compared to adjusted net income from continuing operations of $247 million, or $1.56 per share for the same period in the prior year, an improvement of 24% on a per-share basis.  Adjusted net income from continuing operations excludes debt refinancing costs of $1 million after-tax, or $0.01 per share, for 2011 and $12 million after-tax, or $0.08 per share, for 2010, as disclosed in the attached financial tables.  On a GAAP basis, net income from continuing operations for 2011 was $284 million, or $1.93 per share, compared to $235 million, or $1.48 per share, for the prior year.  The Company's revenue for the full year ended December 31, 2011, totaled $13.8 billion, up 11% compared to $12.5 billion for the same period in the prior year.The fourth quarter conference call may be accessed by telephone at (888)769-8515 (password: AutoNation) at 11:00 a.m. Eastern Time or on AutoNation's investor relations website at investors.autonation.com under "Events & Presentations." The webcast will also be available on our web site following the call. A playback of the conference call will be available after 1:00 p.m. Eastern Time on January 26, 2012 through February 3, 2012 by calling (800)-283-4984 (password: 75300).------------------------------------------------As compared to adjusted EPS from continuing operations in prior periods.Segment income is defined as operating income less floorplan interest expense.About AutoNation, Inc. AutoNation is transforming the automotive retail industry through bold leadership. We deliver a superior automotive retail experience through our customer-focused sales and service processes. Owning and operating 258 new vehicle franchises, which sell 32 brands across 15 states, AutoNation is America's largest automotive retailer, with state-of-the-art operations and the ability to leverage economies of scale that benefit the customer. As an indication of our leadership position in our industry, AutoNation is a component of the S&P 500 Index. AutoNation is driven to be the best-run, most profitable automotive retailer. Follow us at www.facebook.com/autonation and www.twitter.com/autonation.For additional information about AutoNation, please visit investors.autonation.com or www.autonation.com. FORWARD-LOOKING STATEMENTS  This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Words such as "anticipates," "expects," "intends," "goals," "plans," "believes," "continues," "may," "will," and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements regarding our expectations for the automotive retail industry, as well as statements that describe our objectives, goals, or plans, are forward-looking statements. Our forward-looking statements reflect our current expectations concerning future results and events, and they involve known and unknown risks, uncertainties and other factors that are difficult to predict and may cause our actual results, performance or achievements to be materially different from any future results, performance and achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: economic conditions generally; conditions in the credit markets and changes in interest rates; the success and financial viability of vehicle manufacturers and distributors with which we hold franchises; the duration and severity of production and supply chain disruptions resulting from the natural disasters that struck Japan and Thailand; factors affecting our goodwill and other intangible asset impairment testing; natural disasters and other adverse weather events; restrictions imposed by vehicle manufacturers; the resolution of legal and administrative proceedings; regulatory factors affecting our business; and other factors described in our news releases and filings made under the securities laws, including, among others, our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.  Forward-looking statements contained in this news release speak only as of the date of this news release, and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.NON-GAAP FINANCIAL MEASURES This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as adjusted net income and earnings per share from continuing operations, which exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP measures. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure, provide 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 improve 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 December 31,Twelve Months Ended December 31,2011201020112010Revenue:New vehicle$    2,085.6$     1,778.7$      7,498.9$       6,669.1Used vehicle882.2788.43,512.83,116.1Parts and service573.1560.22,293.12,209.1Finance and insurance, net124.9107.0474.5418.9Other12.611.953.047.8Total revenue3,678.43,246.213,832.312,461.0Cost of sales:New vehicle1,938.11,651.26,951.26,217.9Used vehicle820.6726.73,228.02,849.4Parts and service334.6318.61,323.01,245.9Other5.95.226.120.3Total cost of sales3,099.22,701.711,528.310,333.5Gross profit579.2544.52,304.02,127.5Selling, general and administrative expenses412.7392.71,649.41,552.1Depreciation and amortization21.019.683.776.8Other expenses (income), net2.0(2.4)(1.1)2.0Operating income143.5134.6572.0496.6Floorplan interest expense(10.9)(12.3)(42.7)(42.5)Other interest expense(17.4)(16.3)(66.0)(56.1)Loss on debt extinguishment(2.2)-(2.2)(19.6)Interest income0.10.60.71.4Other income (losses), net(0.3)2.5(0.5)1.5Income from continuing operations before income taxes112.8109.1461.3381.3Income tax provision42.941.1177.1146.0Net income from continuing operations69.968.0284.2235.3Loss from discontinued operations, net of income taxes(0.5)(0.7)(2.8)(8.7)Net income$         69.4$          67.3$         281.4$          226.6Diluted earnings (loss) per share:Continuing operations$         0.50$          0.45$           1.93$            1.48Discontinued operations$       (0.00)$        (0.00)$         (0.02)$          (0.05)Net income$         0.49$          0.45$           1.91$            1.43Weighted average common shares outstanding140.6150.4147.3158.6Common shares outstanding, net of treasury stock, at December 31135.8148.4135.8148.4AUTONATION, INC.UNAUDITED SUPPLEMENTARY DATA($ in millions, except per vehicle data) Operating HighlightsThree Months Ended December 31,Twelve Months Ended December 31,20112010$ Variance% Variance20112010$ Variance% VarianceRevenue:New vehicle$        2,085.6$        1,778.7$        306.917.3$        7,498.9$        6,669.1$        829.812.4  Retail used vehicle753.7685.768.09.93,047.62,764.8282.810.2  Wholesale128.5102.725.825.1465.2351.3113.932.4Used vehicle882.2788.493.811.93,512.83,116.1396.712.7Parts and service573.1560.212.92.32,293.12,209.184.03.8Finance and insurance, net124.9107.017.916.7474.5418.955.613.3Other12.611.90.753.047.85.2Total revenue$        3,678.4$        3,246.2$        432.213.3$        13,832.3$        12,461.0$        1,371.311.0Gross profit:New vehicle$           147.5$        127.5$        20.015.7$        547.7$        451.2$        96.521.4  Retail used vehicle62.361.21.11.8280.6258.122.58.7  Wholesale(0.7)0.5(1.2)4.28.6(4.4)Used vehicle61.661.7(0.1)(0.2)284.8266.718.16.8Parts and service238.5241.6(3.1)(1.3)970.1963.26.90.7Finance and insurance124.9107.017.916.7474.5418.955.613.3Other6.76.7(0.0)26.927.5(0.6)Total gross profit579.2544.534.76.42,304.02,127.5176.58.3Selling, general and administrative expenses412.7392.7(20.0)(5.1)1,649.41,552.1(97.3)(6.3)Depreciation and amortization21.019.6(1.4)83.776.8(6.9)Other expenses (income), net2.0(2.4)(4.4)(1.1)2.03.1 Operating income 143.5134.68.96.6572.0496.675.415.2Floorplan interest expense(10.9)(12.3)1.4(42.7)(42.5)(0.2)Other interest expense(17.4)(16.3)(1.1)(66.0)(56.1)(9.9)Loss on debt extinguishment(2.2)-(2.2)(2.2)(19.6)17.4Interest income0.10.6(0.5)0.71.4(0.7)Other income (losses), net(0.3)2.5(2.8)(0.5)1.5(2.0)Income from continuing operations before income taxes$        112.8$        109.1$        3.73.4$        461.3$        381.3$        80.021.0Retail vehicle unit sales:   New 60,19153,1517,04013.2224,034206,45617,5788.5   Used41,94639,1062,8407.3171,094160,12610,9686.8102,13792,2579,88010.7395,128366,58228,5467.8Revenue per vehicle retailed:   New $        34,650$        33,465$        1,1853.5$        33,472$        32,303$        1,1693.6   Used$        17,968$        17,534$           4342.5$        17,812$        17,266$           5463.2Gross profit per vehicle retailed:   New $         2,451$         2,399$            522.2$         2,445$         2,185$         26011.9   Used$         1,485$         1,565$           (80)(5.1)$         1,640$         1,612$          281.7   Finance and insurance$         1,223$         1,160$            635.4$         1,201$         1,143$          585.1 Operating PercentagesThree Months Ended December 31,Twelve Months Ended December 31,2011 (%)2010 (%)2011 (%)2010 (%)Revenue mix percentages:New vehicle56.754.854.253.5Used vehicle24.024.325.425.0Parts and service15.617.316.617.7Finance and insurance, net3.43.33.43.4Other0.30.30.40.4100.0100.0100.0100.0Gross profit mix percentages:New vehicle25.523.423.821.2Used vehicle10.611.312.412.5Parts and service41.244.442.145.3Finance and insurance21.619.720.619.7Other1.11.21.11.3100.0100.0100.0100.0Operating items as a percentage of revenue:Gross profit:   New vehicle7.17.27.36.8   Used vehicle - retail8.38.99.29.3   Parts and service41.643.142.343.6   Total15.716.816.717.1Selling, general and administrative expenses11.212.111.912.5Operating income3.94.14.14.0Operating items as a percentage of total gross profit:Selling, general and administrative expenses71.372.171.673.0Operating income24.824.724.823.3AUTONATION, INC.UNAUDITED SUPPLEMENTARY DATA($ in millions, except per vehicle data)Segment Operating HighlightsThree Months Ended December 31,Twelve Months Ended December 31,20112010$ Variance% Variance20112010$ Variance% VarianceRevenue:Domestic$                  1,209.9$                1,062.6$                       147.313.9$                4,655.4$                4,111.3$                   544.113.2Import1,291.91,184.4107.59.15,121.04,708.4412.68.8Premium luxury1,140.0962.8177.218.43,908.73,509.0399.711.4Corporate and other36.636.40.20.5147.2132.314.911.3Total revenue$                  3,678.4$                3,246.2$                       432.213.3$              13,832.3$              12,461.0$                1,371.311.0*Segment income (loss)Domestic$                       44.1$                     36.5$                           7.620.8$                   180.0$                   152.7$                     27.317.9Import52.545.86.714.6240.3199.540.820.5Premium luxury69.865.74.16.2230.9208.422.510.8Corporate and other(33.8)(25.7)(8.1)(121.9)(106.5)(15.4)Total segment income132.6122.310.38.4529.3454.175.216.6Add:  Floorplan interest expense10.912.3(1.4)42.742.50.2Operating income$                     143.5$                   134.6$                           8.96.6$                   572.0$                   496.6$                     75.415.2* Segment income (loss) is defined as operating income less floorplan interest expense  Retail new vehicle unit sales:Domestic20,05916,5553,50421.276,33564,31712,01818.7Import27,69826,9047943.0108,128107,5805480.5Premium luxury12,4349,6922,74228.339,57134,5595,01214.560,19153,1517,04013.2224,034206,45617,5788.5Brand Mix - New Vehicle Retail Units SoldThree Months Ended December 31,Twelve Months Ended December 31,2011 (%)2010 (%)2011 (%)2010 (%)Domestic:   Ford, Lincoln18.516.818.716.9   Chevrolet, Buick, Cadillac, GMC11.211.712.111.7   Chrysler, Jeep, Dodge3.62.63.32.6     Domestic total33.331.134.131.2Import:   Honda9.312.610.713.4   Toyota19.219.718.419.6   Nissan10.410.811.512.0   Other imports7.17.67.67.1     Import total46.050.748.252.1Premium Luxury:   Mercedes-Benz10.68.28.57.9   BMW5.55.45.04.7   Lexus2.43.02.02.6   Other premium luxury (Land Rover, Porsche)2.21.62.21.5     Premium Luxury total20.718.217.716.7100.0100.0100.0100.0AUTONATION, INC.UNAUDITED SUPPLEMENTARY DATA, Continued($ in millions, except per share data)Capital Expenditures / Stock RepurchasesThree Months Ended December 31,Twelve Months Ended December 31,2011201020112010Capital expenditures (1)$                        44.5$                           81.5$                       158.1$                     161.8Acquisitions$                              -$                                 -$                         64.2$                       73.1Proceeds from exercises of stock options$                        12.4$                           19.8$                         78.7$                       49.9Stock repurchases:Aggregate purchase price$                      217.8$                           17.1$                       583.4$                     523.7Shares repurchased (in millions)6.30.717.126.6Floorplan Assistance and ExpenseThree Months Ended December 31,Twelve Months Ended December 31,20112010Variance20112010VarianceFloorplan assistance earned (included in cost of sales)$                           16.4$                              14.4$                           2.0$                       61.1$                     55.6$                  5.5Floorplan interest expense (new vehicles)(10.4)(11.6)1.2(40.3)(40.2)(0.1)Net new vehicle inventory carrying benefit$                             6.0$                                2.8$                           3.2$                       20.8$                     15.4$                  5.4Balance Sheet and Other HighlightsDecember 31, 2011December 31, 2010Cash and cash equivalents$                           86.6$                              95.1Inventory$                      1,809.2$                         1,867.0Total floorplan notes payable$                      1,898.8$                         1,866.4Non-vehicle debt$                      1,647.0$                         1,348.7Equity$                      1,894.6$                         2,078.9New days supply (industry standard of sellingdays, including fleet) 50 days     63 days     Used days supply (trailing 31 days) (2) 31 days     34 days     Key Credit Agreement Covenant Compliance CalculationsRatio of funded indebtedness/Adjusted EBITDA????????????????????2.59Covenant??????????????????????????????..less than3.75Ratio of funded indebtedness including floorplan/Total capitalization including floorplan??????.???.50.9%Covenant??????????????????????????????..less than65.0%(1) Includes accrued construction in progress and excludes property acquired under capital leases.(2) As of December 31, 2011, we have revised our method of calculating used vehicle days supply from a dollar day supply to a unit day supply (including wholesale units). We have revised prior periods to conform to our revised method of calculation.AUTONATION, INC. UNAUDITED SUPPLEMENTARY DATA, Continued($ in millions, except per share data)Comparable Basis Reconciliations*Three Months Ended December 31,Net IncomeDiluted Earnings Per Share**2011201020112010As reported$                  69.4$               67.3$                      0.49$                     0.45Discontinued operations, net of income taxes0.50.7$                      0.00$                     0.00From continuing operations, as reported69.968.0$                      0.50$                     0.45Loss on debt extinguishment1.4-$                      0.01$                           -Adjusted $                  71.3$               68.0$                      0.51$                     0.45Twelve Months Ended December 31,Net IncomeDiluted Earnings Per Share**2011201020112010As reported$                281.4$             226.6$                      1.91$                     1.43Discontinued operations, net of income taxes2.88.7$                      0.02$                     0.05From continuing operations, as reported284.2235.3$                      1.93$                     1.48Loss on debt extinguishment1.412.1$                      0.01$                     0.08Adjusted $                285.6$             247.4$                      1.94$                     1.56*Please refer to the "Non-GAAP Financial Measures" section of the Press Release.**Earnings per share amounts are calculated discretely and therefore may not add up to the total.AUTONATION, INC. UNAUDITED SAME STORE DATA ($ in millions, except per vehicle data) Operating HighlightsThree Months Ended December 31,Twelve Months Ended December 31,20112010$ Variance% Variance20112010$ Variance% VarianceRevenue:New vehicle$                  2,035.2$                  1,778.7$                     256.514.4$               7,307.6$               6,669.1$                  638.59.6  Retail used vehicle739.8685.754.17.92,985.62,764.8220.88.0  Wholesale118.3102.715.615.2429.4351.378.122.2Used vehicle858.1788.469.78.83,415.03,116.1298.99.6Parts and service565.8560.25.61.02,250.92,209.141.81.9Finance and insurance, net122.2107.015.214.2463.9418.945.010.7Other12.511.90.652.247.84.4Total revenue$                  3,593.8$                  3,246.2$                     347.610.7$             13,489.6$             12,461.0$               1,028.68.3Gross profit:New vehicle$                     144.0$                     127.5$                       16.512.9$                  533.4$                  451.2$                    82.218.2  Retail used vehicle61.361.20.10.2275.1258.117.06.6  Wholesale(0.4)$                         0.5(0.9)4.68.6(4.0)Used vehicle60.961.7(0.8)(1.3)279.7266.713.04.9Parts and service235.1241.6(6.5)(2.7)950.7963.2(12.5)(1.3)Finance and insurance122.2107.015.214.2463.9418.945.010.7Other6.76.70.026.427.5(1.1)Total gross profit$                     568.9$                     544.5$                       24.44.5$               2,254.1$               2,127.5$                  126.66.0Retail vehicle unit sales:   New 58,70253,1515,55110.4217,685206,45611,2295.4   Used41,22439,1062,1185.4167,563160,1267,4374.699,92692,2577,6698.3385,248366,58218,6665.1Revenue per vehicle retailed:   New $                   34,670$                   33,465$                     1,2053.6$                33,570$                32,303$                  1,2673.9   Used$                   17,946$                   17,534$                        4122.3$                17,818$                17,266$                     5523.2Gross profit per vehicle retailed:   New $                     2,453$                     2,399$                          542.3$                  2,450$                  2,185$                     26512.1   Used$                     1,487$                     1,565$                         (78)(5.0)$                  1,642$                  1,612$                       301.9   Finance and insurance$                     1,223$                     1,160$                          635.4$                  1,204$                  1,143$                       615.3Operating PercentagesThree Months Ended December 31,Twelve Months Ended December 31,2011 (%)2010 (%)2011 (%)2010 (%)Revenue mix percentages:New vehicle56.654.854.253.5Used vehicle23.924.325.325.0Parts and service15.717.316.717.7Finance and insurance, net3.43.33.43.4Other0.40.30.40.4100.0100.0100.0100.0Gross profit mix percentages:New vehicle25.323.423.721.2Used vehicle10.711.312.412.5Parts and service41.344.442.245.3Finance and insurance21.519.720.619.7Other1.21.21.11.3100.0100.0100.0100.0Operating items as a percentage of revenue:Gross Profit:   New vehicle7.17.27.36.8   Used vehicle - retail8.38.99.29.3   Parts and service41.643.142.243.6   Total15.816.816.717.1SOURCE AutoNation, Inc.For further information: Marc Cannon, +1-954-769-3146, cannonm@autonation.com; or Investor contacts, Cheryl Scully, +1-954-769-7734, scullyc@autonation.com, or Kate Keyser-Pearlman, +1-954-769-7342, keyserk1@autonation.com