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Press release from PR Newswire

Group 1 Automotive Reports Record 2013 First-Quarter Financial Results On Strong Revenue Growth And Improved Cost Leverage

Thursday, May 02, 2013

Group 1 Automotive Reports Record 2013 First-Quarter Financial Results On Strong Revenue Growth And Improved Cost Leverage

07:07 EDT Thursday, May 02, 2013

HOUSTON, May 2, 2013 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI), an international, Fortune 500 automotive retailer, today reported adjusted first-quarter 2013 net income of $29.2 million, a 26.5 percent increase, and adjusted diluted earnings per common share of $1.16, a 19.6 percent increase, on a year-over-year comparable basis for the period ended March 31, 2013.

FIRST-QUARTER 2013 CONSOLIDATED RESULTS (on a year-over-year, comparable basis unless otherwise noted)

  • Total gross profit grew 15.4 percent on 18.0 percent higher revenues of $2.0 billion.
  • New vehicle revenue increased 21.7 percent reflecting 18.5 percent higher unit sales, as same-store new vehicle unit sales grew 5.8 percent.
  • Used vehicle retail revenue increased 13.6 percent reflecting 12 percent higher used retail unit sales.
  • Selling, general and administrative (SG&A) expenses as a percent of gross profit improved 110 basis points, to 75.4 percent, with a same-store improvement of 130 basis points, to 74.7 percent.
  • Operating margin expanded 10 basis points to 3.3 percent, with a same-store operating margin expansion of 20 basis points to 3.5 percent.
  • Pretax income grew 25.4 percent to $46.8 million.
  • Consolidated effective tax rate was 37.7 percent.
  • Diluted earnings per common share increased 19.6 percent, to $1.16, on 26.5 percent higher net income of $29.2 million, both record first-quarter results for the company.

CORPORATE DEVELOPMENTAs previously announced during the first quarter, Group 1 acquired four franchises in the United Kingdom and 22 franchises in Brazil with total estimated annual revenues of approximately $827.0 million and disposed of a franchise in California that generated trailing-12-month revenues of $35.0 million.

"I am pleased with Group 1's first-quarter operating results including significant revenue growth and solid expense leverage that delivered record first-quarter earnings," said Earl J. Hesterberg, Group 1's president and chief executive officer. "We also significantly expanded the scale of our U.K. business and entered the rapidly-growing Brazilian automotive market. This is an exciting time for our company ? an unprecedented growth phase which should support strong returns for our shareholders over time."

SEGMENT RESULTS FOR FIRST-QUARTER 2013 (on a year-over-year basis unless otherwise noted)

United States:Group 1's U.S. revenues were $1.7 billion, an increase of 8.5 percent. The revenue growth was primarily explained by unit sales increases of 7.4 percent in new vehicles and 6.1 percent in retail used vehicles, as well as an increase of 5.3 percent in parts and service revenue. The higher revenue drove gross profit growth of 8.8 percent, reflecting the higher new and used retail volumes, expanded parts and service margins of 100 basis points and a finance and insurance increase of 18.9 percent, or $136, to $1,339 per retail unit, which is another all-time any-quarter record for the company. The gross profit increase was partially offset by a reduction in wholesale used vehicle gross profit per unit.

On a comparable basis, SG&A expenses as a percent of gross profit improved 160 basis points to 74.8 percent, operating margin expanded to 3.6 percent and pretax margin increased to 2.6 percent. Group 1's U.S. operations accounted for 87.7 percent of total revenues, 90.8 percent of total gross profit and 93.9 percent of the company's adjusted pretax income.

United Kingdom:Group 1's U.K. operations, which include significant acquisitions, accounted for 8.7 percent of total revenues, 6.4 percent of total gross profit and 4.6 percent of the company's adjusted pretax income. Gross profit grew 101.6 percent on 117.9 percent higher revenues of $171.1 million. Revenue growth was primarily driven by 146.5 percent and 102.3 percent increases in new and used vehicle retail unit sales, respectively. The gross profit increase was driven by parts and service growth of 77.2 percent and a finance and insurance increase of 159.0 percent, or $73, to $604 per retail unit, on the higher retail unit sales.

On a comparable basis, SG&A expenses as a percent of gross profit increased 370 basis points to 82.9 percent, with the increase more than explained by the new acquisitions, operating margin was 1.6 percent and pretax margin was 1.3 percent.

Brazil:Group 1's Brazilian operations were acquired on Feb. 28. The contribution of approximately one month of results accounted for 3.6 percent of total revenues, 2.8 percent of total gross profit and 1.5 percent of the company's adjusted pretax income. Gross profit was $8.4 million on revenues of $71.0 million. New vehicle sales was the primary revenue contributor at 74.4 percent, while new vehicles and parts and service were the primary gross profit contributors at 52.8 percent and 32.4 percent, respectively.

On an adjusted basis, SG&A expenses as a percent of gross profit was 80.0 percent, operating margin was 2.0 percent and pretax margin was 1.0 percent. The adjusted net income generated by the Brazilian operations covered the dilutive effect of the shares issued for the transaction.

FIRST-QUARTER EARNINGS CONFERENCE CALLGroup 1's senior management will host a conference call today at 10 a.m. ET to discuss the first-quarter financial results and the company's outlook and strategy.

The conference call will be simulcast live on the Internet at www.group1auto.com, then click on 'Investor Relations' and then 'Events' or through this link: http://www.group1corp.com/news/events.aspx. A replay will be available for 30 days.

The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:

Domestic: 1.877.317.6789International: 1.412.317.6789Conference ID: 10028096

A telephonic replay will be available following the call through May 9 at 9 a.m. ET by dialing:

Domestic: 1.877.344.7529International: 1.412.317.0088Conference ID: 10028096

About Group 1 Automotive, Inc.Group 1 owns and operates 143 automotive dealerships, 182 franchises, and 36 collision centers in the United States, the United Kingdom and Brazil that offer 35 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related vehicle financing, service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.

Group 1 Automotive can be reached on the Internet at www.group1auto.com.

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should," "foresee," "may" or "will" and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Investor Contacts:Kim Paper CanningManager, Investor RelationsGroup 1 Automotive, Inc.713-647-5741 | kpaper@group1auto.com

Media Contacts:Pete DeLongchampsV.P. Financial Services and Manufacturer RelationsGroup 1 Automotive, Inc.713-647-5770 | pdelongchamps@group1auto.com orClint WoodsPierpont Communications, Inc.713-627-2223 | cwoods@piercom.com

 

 

Group 1 Automotive, Inc.

Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended March 31,

2013

2012

% Change

REVENUES:

New vehicle retail sales

$  1,110,235

$     912,595

21.7

Used vehicle retail sales

471,399

414,974

13.6

Used vehicle wholesale sales

74,551

66,857

11.5

Parts and service

237,510

213,101

11.5

Finance and insurance

70,137

57,218

22.6

Total revenues

1,963,832

1,664,745

18.0

COST OF SALES:

New vehicle retail sales

1,047,599

859,775

21.8

Used vehicle retail sales

431,123

378,577

13.9

Used vehicle wholesale sales

72,129

64,153

12.4

Parts and service

112,492

101,816

10.5

Total cost of sales

1,663,343

1,404,321

18.4

GROSS PROFIT

300,489

260,424

15.4

SELLING, GENERAL AND

ADMINISTRATIVE EXPENSES

233,433

199,112

17.2

DEPRECIATION AND

AMORTIZATION EXPENSE

8,413

7,236

16.3

ASSET IMPAIRMENTS

-

101

(100.0)

OPERATING INCOME

58,643

53,975

8.6

OTHER EXPENSE:

Floorplan interest expense

(9,364)

(7,619)

22.9

Other interest expense, net

(9,242)

(9,040)

2.2

Other expense, net

(789)

-

-

INCOME BEFORE INCOME TAXES

39,248

37,316

5.2

PROVISION FOR INCOME TAXES

(17,130)

(14,199)

20.6

NET INCOME

$       22,118

$       23,117

(4.3)

DILUTED INCOME PER SHARE

$           0.88

$           0.97

(9.3)

Weighted average dilutive common shares outstanding

24,113

22,532

7.0

Weighted average participating securities

1,072

1,209

(11.3)

Total weighted average shares outstanding

25,185

23,741

6.1

 

 

Group 1 Automotive, Inc.

Consolidated Balance Sheets

(Dollars in thousands)

March 31,

December 31,

2013

2012

% Change

ASSETS:

CURRENT ASSETS:

Cash and cash equivalents

$            17,729

$              4,650

281.3

Contracts in transit and vehicle receivables, net

190,879

204,396

(6.6)

Accounts and notes receivable, net

131,662

111,228

18.4

Inventories, net

1,353,120

1,194,288

13.3

Deferred income taxes

19,967

19,750

1.1

Prepaid expenses and other current assets

25,698

31,869

(19.4)

Total current assets

1,739,055

1,566,181

11.0

PROPERTY AND EQUIPMENT, net

699,940

667,768

4.8

GOODWILL AND INTANGIBLE FRANCHISE RIGHTS

935,918

778,442

20.2

OTHER ASSETS

20,820

10,624

96.0

Total assets

$       3,395,733

$       3,023,015

12.3

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:

Floorplan notes payable - credit facility

$       1,004,165

$          968,959

3.6

Offset account related to floorplan notes payable - credit facility

(59,245)

(112,261)

(47.2)

Floorplan notes payable - manufacturer affiliates

288,808

211,965

36.3

Current maturities of long-term debt and short-term financing

37,209

31,358

18.7

Accounts payable

255,336

167,439

52.5

Accrued expenses

136,914

128,118

6.9

Total current liabilities

1,663,187

1,395,578

19.2

2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $182,753 at March 31, 2013 and December 31, 2012)

154,299

152,363

1.3

3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of $115,000 at March 31, 2013 and December 31, 2012)

81,578

80,706

1.1

MORTGAGE FACILITY, net of current maturities

47,402

53,643

(11.6)

OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, net of current maturities

227,571

232,285

(2.0)

CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities

38,889

36,019

8.0

DEFERRED INCOME TAXES

105,152

94,130

11.7

LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES

40,379

43,089

(6.3)

OTHER LIABILITIES

44,440

42,413

4.8

COMMITMENTS AND CONTINGENCIES

TEMPORARY EQUITY - REDEEMABLE EQUITY PORTION OF

THE 3.00% CONVERTIBLE SENIOR NOTES

31,679

32,505

(2.5)

STOCKHOLDERS' EQUITY:

Common stock

259

258

0.4

Additional paid-in capital

363,511

332,837

9.2

Retained earnings

696,366

677,863

2.7

Accumulated other comprehensive loss

(38,819)

(33,057)

17.4

Treasury stock

(60,160)

(117,617)

(48.9)

Total stockholders' equity

961,157

860,284

11.7

Total liabilities and stockholders' equity

$       3,395,733

$       3,023,015

12.3

 

 

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)

Three Months Ended

March 31,

2013 (%)

2012 (%)

NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: 

Region

Geographic Market

East

Massachusetts

6.4

10.6

New Jersey

4.8

5.1

Georgia

4.3

3.4

New York

2.9

3.4

Louisiana

2.5

2.8

New Hampshire

2.3

2.8

Mississippi

1.8

2.2

South Carolina

1.6

1.7

Florida

1.4

0.7

Alabama

0.9

1.1

Maryland

0.6

0.7

29.5

34.5

West

Texas

34.2

38.0

California

13.4

14.6

Oklahoma

7.4

7.7

Kansas

2.5

1.1

57.5

61.4

International

United Kingdom

8.5

4.1

Brazil

4.5

-

100.0

100.0

NEW VEHICLE UNIT SALES BRAND MIX:

Toyota/Scion/Lexus

27.6

30.7

Honda/Acura

12.3

10.9

Ford/Lincoln

11.5

10.3

Nissan/Infiniti

10.6

13.1

BMW/MINI

10.3

10.8

Volkswagen/Audi/Porsche

6.9

4.0

GM/Chevrolet/GMC/Buick/Cadillac

5.3

6.2

Mercedes Benz/smart/Sprinter

4.5

4.7

Hyundai/Kia

4.5

2.6

Chrysler/Dodge/Jeep/RAM

4.3

4.5

Other

2.2

2.2

100.0

100.0

 

 

Group 1 Automotive, Inc.

Additional Information - U.S.

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended March 31,

2013

2012

% Change

REVENUES:

New vehicle retail sales

$         962,633

$        872,989

10.3

Used vehicle retail sales

418,339

392,273

6.6

Used vehicle wholesale sales

57,669

59,418

(2.9)

Total used

476,008

451,691

5.4

Parts and service

216,354

205,385

5.3

Finance and insurance

66,792

56,154

18.9

Total 

$       1,721,787

$     1,586,219

8.5

GROSS MARGIN %:

New vehicle retail sales

5.4

5.7

Used vehicle retail sales

9.0

9.0

Used vehicle wholesale sales

3.7

4.4

Total used

8.3

8.4

Parts and service

53.1

52.1

Finance and insurance

100.0

100.0

Total

15.9

15.8

GROSS PROFIT:

New vehicle retail sales

$          51,582

$         49,766

3.6

Used vehicle retail sales

37,619

35,336

6.5

Used vehicle wholesale sales

2,125

2,600

(18.3)

Total used

39,744

37,936

4.8

Parts and service

114,823

107,061

7.3

Finance and insurance

66,793

56,154

18.9

Total 

$         272,942

$       250,917

8.8

UNITS SOLD:

Retail new vehicles sold

28,778

26,783

7.4

Retail used vehicles sold

21,116

19,895

6.1

Wholesale used vehicles sold

9,657

9,304

3.8

Total used

30,773

29,199

5.4

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$          33,450

$         32,595

2.6

Used vehicle retail

$          19,811

$         19,717

0.5

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$            1,792

$           1,858

(3.6)

Used vehicle retail sales

1,782

1,776

0.3

Used vehicle wholesale sales

220

279

(21.1)

Total used

1,292

1,299

(0.5)

Finance and insurance (per retail unit)

$            1,339

$           1,203

11.3

OTHER: (1)

SG&A expenses

$         204,091

$        191,578

6.5

SG&A as % revenues

11.9

12.1

SG&A as % gross profit

74.8

76.4

Operating margin %

3.6

3.3

Pretax margin %

2.6

2.3

INTEREST EXPENSE:

Floorplan interest

$            8,296

$            7,482

10.9

Floorplan assistance

(8,173)

(7,414)

10.2

Net floorplan expense

$               123

$                 68

80.9

            Other Interest expense, net

$             9,041

$             8,919

1.4

(1)

These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

 

Group 1 Automotive, Inc.

Additional Information - U.K.

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended March 31,

2013

2012

% Change

REVENUES:

New vehicle retail sales

$        94,824

$          39,607

139.4

Used vehicle retail sales

44,965

22,701

98.1

Used vehicle wholesale sales

13,765

7,439

85.0

Total used

58,730

30,140

94.9

Parts and service

14,771

7,716

91.4

Finance and insurance

2,753

1,063

159.0

Total 

$       171,078

$          78,526

117.9

GROSS MARGIN %:

New vehicle retail sales

7.0

7.7

Used vehicle retail sales

4.9

4.7

Used vehicle wholesale sales

0.6

1.4

Total used

3.9

3.9

Parts and service

50.7

54.7

Finance and insurance

100.0

100.0

Total

11.2

12.1

GROSS PROFIT:

New vehicle retail sales

$          6,632

$           3,056

117.0

Used vehicle retail sales

2,217

1,061

109.0

Used vehicle wholesale sales

84

103

(18.4)

Total used

2,301

1,164

97.7

Parts and service

7,484

4,224

77.2

Finance and insurance

2,753

1,063

159.0

Total 

$        19,170

$           9,507

101.6

UNITS SOLD:

Retail new vehicles sold

2,827

1,147

146.5

Retail used vehicles sold

1,728

854

102.3

Wholesale used vehicles sold

1,443

690

109.1

Total used

3,171

1,544

105.4

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$        33,542

$         34,531

(2.9)

Used vehicle retail

$        26,021

$         26,582

(2.1)

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$          2,346

$           2,664

(11.9)

Used vehicle retail sales

1,283

1,242

3.3

Used vehicle wholesale sales

58

149

(61.1)

Total used

726

754

(3.7)

Finance and insurance (per retail unit)

$             604

$              531

13.7

OTHER: (1)

SG&A expenses

$         15,894

$           7,534

111.0

SG&A as % revenues

9.3

9.6

SG&A as % gross profit

82.9

79.2

Operating margin %

1.6

1.9

Pretax margin %

1.3

1.6

INTEREST EXPENSE:

Floorplan interest

$             306

$              137

123.4

Floorplan assistance

-

-

Net floorplan expense

$             306

$              137

123.4

            Other Interest expense, net

$             213

$              121

76.0

(1)

These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

 

Group 1 Automotive, Inc.

Additional Information - Brazil

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three MonthsEnded March 31,

2013

REVENUES:

New vehicle retail sales

52,778

Used vehicle retail sales

8,095

Used vehicle wholesale sales

3,117

Total used

11,212

Parts and service

6,385

Finance and insurance

592

Total 

$         70,967

GROSS MARGIN %:

New vehicle retail sales

8.4

Used vehicle retail sales

5.4

Used vehicle wholesale sales

6.8

Total used

5.8

Parts and service

42.4

Finance and insurance

100.0

Total

11.8

GROSS PROFIT:

New vehicle retail sales

$           4,422

Used vehicle retail sales

440

Used vehicle wholesale sales

212

Total used

652

Parts and service

2,710

Finance and insurance

592

Total 

$           8,376

UNITS SOLD:

Retail new vehicles sold

1,491

Retail used vehicles sold

394

Wholesale used vehicles sold

235

Total used

629

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$         35,398

Used vehicle retail

$         20,546

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$           2,966

Used vehicle retail sales

1,117

Used vehicle wholesale sales

902

Total used

1,037

Finance and insurance (per retail unit)

$              314

OTHER: (1)

SG&A expenses

$           6,702

SG&A as % revenues

9.4

SG&A as % gross profit

80.0

Operating margin %

2.0

Pretax margin %

1.0

INTEREST EXPENSE:

Floorplan interest

$              762

Floorplan assistance

-

Net floorplan expense

$              762

            Other Interest expense, net 

$              (12)

(1)

These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

 

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended March 31,

2013

2012

% Change

REVENUES:

New vehicle retail sales

$          1,110,235

$            912,595

21.7

Used vehicle retail sales

471,399

414,974

13.6

Used vehicle wholesale sales

74,551

66,857

11.5

Total used

545,950

481,831

13.3

Parts and service

237,510

213,101

11.5

Finance and insurance

70,137

57,218

22.6

Total 

$          1,963,832

$         1,664,745

18.0

GROSS MARGIN %:

New vehicle retail sales

5.6

5.8

Used vehicle retail sales

8.5

8.8

Used vehicle wholesale sales

3.2

4.0

Total used

7.8

8.1

Parts and service

52.6

52.2

Finance and insurance

100.0

100.0

Total

15.3

15.6

GROSS PROFIT:

New vehicle retail sales

$              62,636

$             52,820

18.6

Used vehicle retail sales

40,276

36,397

10.7

Used vehicle wholesale sales

2,422

2,704

(10.4)

Total used

42,698

39,101

9.2

Parts and service

125,018

111,285

12.3

Finance and insurance

70,137

57,218

22.6

Total 

$            300,489

$           260,424

15.4

UNITS SOLD:

Retail new vehicles sold

33,096

27,930

18.5

Retail used vehicles sold

23,238

20,749

12.0

Wholesale used vehicles sold

11,335

9,994

13.4

Total used

34,573

30,743

12.5

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$              33,546

$             32,674

2.7

Used vehicle retail

$              20,286

$             20,000

1.4

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$                1,893

$               1,891

0.1

Used vehicle retail sales

1,733

1,754

(1.2)

Used vehicle wholesale sales

214

271

(21.0)

Total used

1,235

1,272

(2.9)

Finance and insurance (per retail unit)

$                1,245

$               1,175

6.0

OTHER: (1)

SG&A expenses

$             226,687

$            199,112

13.8

SG&A as % revenues

11.5

12.0

SG&A as % gross profit

75.4

76.5

Operating margin %

3.3

3.2

Pretax margin %

2.4

2.2

INTEREST EXPENSE:

Floorplan interest

$                9,364

$               7,619

22.9

Floorplan assistance

(8,173)

(7,414)

10.2

Net floorplan expense

$                1,191

$                  205

481.0

            Other Interest expense, net

$                9,242

$               9,040

2.2

(1)

These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

 

Group 1 Automotive, Inc.

Additional Information - Same Store(1)

(Unaudited)

(Dollars in thousands, except per unit amounts)

Three Months Ended March 31,

2013

2012

% Change

REVENUES:

New vehicle retail sales

$         967,330

$         889,162

8.8

Used vehicle retail sales

420,466

404,965

3.8

Used vehicle wholesale sales

62,157

64,390

(3.5)

Total used

482,623

469,355

2.8

Parts and service

219,641

208,427

5.4

Finance and insurance

65,464

56,089

16.7

Total 

$      1,735,058

$      1,623,033

6.9

GROSS MARGIN %:

New vehicle retail sales

5.4

5.8

Used vehicle retail sales

8.6

8.8

Used vehicle wholesale sales

3.5

4.1

Total used

8.0

8.2

Parts and service

52.8

52.2

Finance and insurance

100.0

100.0

Total

15.7

15.7

GROSS PROFIT:

New vehicle retail sales

$          52,281

$           51,563

1.4

Used vehicle retail sales

36,291

35,613

1.9

Used vehicle wholesale sales

2,175

2,666

(18.4)

Total used

38,466

38,279

0.5

Parts and service

115,991

108,796

6.6

Finance and insurance

65,464

56,089

16.7

Total 

$        272,202

$         254,727

6.9

UNITS SOLD:

Retail new vehicles sold

28,635

27,076

5.8

Retail used vehicles sold

20,670

20,193

2.4

Wholesale used vehicles sold

9,753

9,518

2.5

Total used

30,423

29,711

2.4

AVERAGE RETAIL SALES PRICE:

New vehicle retail

$          33,781

$           32,839

2.9

Used vehicle retail

$          20,342

$           20,055

1.4

GROSS PROFIT PER UNIT SOLD:

New vehicle retail sales

$            1,826

$             1,904

(4.1)

Used vehicle retail sales

1,756

1,764

(0.5)

Used vehicle wholesale sales

223

280

(20.4)

Total used

1,264

1,288

(1.9)

Finance and insurance (per retail unit)

$            1,328

$             1,187

11.9

OTHER: (2)

SG&A expenses

$        203,401

$         193,495

5.1

SG&A as % revenues

11.7

11.9

SG&A as % gross profit

74.7

76.0

Operating margin % 

3.5

3.3

(1)

Same store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same store results also include the activities of our corporate office.

(2)

These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

 

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - U.S.

(Unaudited)

 (Dollars in thousands, except per share amounts)

Three Months Ended March 31,

2013

2012

% Change

SG&A RECONCILIATION:

As reported

$      209,484

$      191,578

9.3

  Pre-tax adjustments:

Acquisition costs

(5,159)

-

Catastrophic events

(808)

-

Gain on dealership disposition 

574

-

Adjusted SG&A (1)

$      204,091

$      191,578

6.5

SG&A AS % REVENUES:

Unadjusted

12.2

12.1

Adjusted (1)

11.9

12.1

SG&A AS % OF GROSS PROFIT:

Unadjusted

76.8

76.4

Adjusted (1)

74.8

76.4

OPERATING MARGIN %

Unadjusted

3.2

3.3

Adjusted (1), (2)

3.6

3.3

PRETAX MARGIN %:

Unadjusted

2.2

2.3

Adjusted (1), (2)

2.6

2.3

(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items. These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 

(2)

Excludes the impact of SG&A reconciling items above.

 

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - U.K.

(Unaudited)

 (Dollars in thousands, except per share amounts)

Three Months Ended March 31,

2013

2012

% Change

SG&A RECONCILIATION:

As reported

$     16,036

$         7,534

112.8

  Pre-tax adjustments:

Acquisition costs

(142)

-

Adjusted SG&A (1)

$     15,894

$         7,534

111.0

SG&A AS % REVENUES:

Unadjusted

9.4

9.6

Adjusted (1)

9.3

9.6

SG&A AS % OF GROSS PROFIT:

Unadjusted

83.7

79.2

Adjusted (1)

82.9

79.2

OPERATING MARGIN %

Unadjusted

1.5

1.9

Adjusted (1), (2)

1.6

1.9

PRETAX MARGIN %:

Unadjusted

1.2

1.6

Adjusted (1), (2)

1.3

1.6

(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 

(2)

Excludes the impact of SG&A reconciling items above.

 

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP

 Financial Measures - Brazil

(Unaudited)

 (Dollars in thousands, except per share amounts)

Three MonthsEndedMarch 31,

2013

SG&A RECONCILIATION:

As reported

$            7,913

  Pre-tax adjustments:

Acquisition costs

(1,211)

Adjusted SG&A (1)

$            6,702

SG&A AS % REVENUES:

Unadjusted

11.2

Adjusted (1)

9.4

SG&A AS % OF GROSS PROFIT:

Unadjusted

94.5

Adjusted (1)

80.0

OPERATING MARGIN %

Unadjusted

0.3

Adjusted (1), (2)

2.0

PRETAX MARGIN %:

Unadjusted

(1.8)

Adjusted (1), (3)

1.0

(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items. These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 

(2)

Excludes the impact of SG&A reconciling items above.

(3)

Excludes the impact of SG&A reconciling items above, as well as the other expense of $789.

 

 

Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - Consolidated

(Unaudited)

 (Dollars in thousands, except per share amounts)

Three Months Ended March 31,

NET INCOME RECONCILIATION:

2013

2012

% Change

As reported

$         22,118

$     23,117

(4.3)

  After-tax adjustments:

Acquisition costs(2)

4,639

-

Income tax effect of non-deductible acquisition costs

2,329

-

Catastrophic events (3)

504

-

Gain on dealership disposition (4)

(356)

-

Adjusted net income (1)

$         29,234

$      23,117

26.5

ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED COMMON SHARES RECONCILIATION:

Adjusted net income

$         29,234

$      23,117

26.5

Less: Adjusted earnings allocated to participating securities

1,233

1,165

5.8

Adjusted net income available to diluted common shares

$         28,001

$      21,952

27.6

DILUTED INCOME PER COMMON SHARE RECONCILIATION:

As reported

$            0.88

$         0.97

(9.3)

  After-tax adjustments:

Acquisition costs

0.18

-

Income tax effect of non-deductible acquisition costs

0.09

Catastrophic events

0.02

-

Gain on dealership disposition 

(0.01)

-

Adjusted diluted income per share (1)

$            1.16

$         0.97

19.6

SG&A RECONCILIATION:

As reported

$       233,433

$    199,112

17.2

  Pre-tax adjustments:

Acquisition costs

(6,512)

-

Catastrophic events

(808)

-

Gain on dealership disposition 

574

-

Adjusted SG&A (1)

$       226,687

$    199,112

13.8

SG&A AS % REVENUES:

Unadjusted

11.9

12.0

Adjusted (1)

11.5

12.0

SG&A AS % OF GROSS PROFIT:

Unadjusted

77.7

76.5

Adjusted (1)

75.4

76.5

OPERATING MARGIN %

Unadjusted

3.0

3.2

Adjusted (1), (5)

3.3

3.2

PRETAX MARGIN %:

Unadjusted

2.0

2.2

Adjusted (1), (7)

2.4

2.2

SAME STORE SG&A RECONCILIATION:

As reported

  Pre-tax adjustments:

$       209,510

$     193,495

8.3

Acquisition costs

(5,301)

-

Catastrophic events

(808)

-

Adjusted Same Store SG&A (1)

$       203,401

$     193,495

5.1

SAME STORE SG&A AS % REVENUES:

Unadjusted

12.1

11.9

Adjusted (1)

11.7

11.9

SAME STORE SG&A AS % OF GROSS PROFIT:

Unadjusted

77.0

76.0

Adjusted (1)

74.7

76.0

SAME STORE OPERATING MARGIN %:

Unadjusted

3.2

3.3

Adjusted (1), (6)

3.5

3.3

(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items. These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 

(2)

Adjustment is net of tax benefit of $2,394 for the three months ended March 31, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.

(3)

Adjustment is net of tax benefit of $304 for the three months ended March 31, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.

(4)

Adjustment is net of tax provision of $218 for the three months ended March 31, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.

(5)

Excludes the impact of SG&A reconciling items above.

(6)

Excludes the impact of Same Store SG&A reconciling items. Adjusted Same Store Operating Income was $61,113 and $54,081 for the periods presented respectively.

(7)

Excludes the impact of SG&A reconciling items above, as well as the other expense of $789.

SOURCE Group 1 Automotive, Inc.

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