FORT LAUDERDALE, Fla., July 24 FL-AutoNation-earns
FORT LAUDERDALE, Fla., July 24 /PRNewswire-FirstCall/ -- AutoNation, Inc.
(NYSE: AN), America's largest automotive retailer, today reported 2008 second
quarter net income from continuing operations of $53 million or $0.29 per
share, compared to year-ago net income from continuing operations of $79
million or $0.38 per share. After adjusting for certain items disclosed in the
attached financial tables, net income from continuing operations for the 2008
second quarter was $59 million or $0.33 per share, compared to $76 million or
$0.36 per share in the prior year.
Second quarter 2008 revenue totaled $3.9 billion, compared to $4.5 billion
in the year-ago period, driven primarily by lower new vehicle sales. In the
second quarter, total U.S. industry retail sales declined 16%, based on CNW
Research data. In comparison, in the second quarter AutoNation's new vehicle
unit sales declined 12%.
Commenting on the second quarter, Mike Jackson, Chairman and Chief
Executive Officer, said, "Despite the fact that this past quarter was the most
challenging automotive sales environment any of us have encountered,
AutoNation delivered solid profitability." Mr. Jackson also noted, "In the
second quarter, the industry encountered $4.00 per gallon gasoline on top of
the continued housing depression and credit crisis, resulting in a significant
challenge as consumers are either postponing the purchase of vehicles or they
are purchasing smaller vehicles that are more economical both at the time of
purchase and at the pump. We now believe that, in 2008, U.S. new vehicle
industry sales will decline to the low-14 million unit level."
Mr. Jackson added, "In continuing response to the ongoing macroeconomic
and industry challenges, we are executing a cost reduction plan with a
targeted annualized run rate pre-tax savings of $100 million. In the first
half of the year, we achieved approximately $25 million of this benefit. In
the second half of the year, we expect to achieve approximately $50 million of
savings, for a full-year 2008 impact of $75 million on a pre-tax basis. Our
targeted annualized cost savings include reductions in advertising spending,
corporate overhead expense and store personnel expense."
For the six-month period ended June 30, 2008, the Company reported net
income from continuing operations of $109 million or $0.60 per share compared
to $162 million or $0.77 per share in the prior year. After adjusting for
certain items as disclosed in the attached financial tables, net income from
continuing operations for the six-month period ended June 30, 2008 was $115
million or $0.64 per share, compared to $153 million or $0.73 per share. The
Company's revenue for the six-month period ended June 30, 2008 totaled $7.9
billion, down 10% compared to $8.8 billion in the prior year.
The second quarter conference call may be accessed at 10:00 a.m. Eastern
Time today by phone at 888-769-8515 or via the Internet (audio webcast) 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 12:00 (noon) p.m. Eastern Time August 1, 2008 through August
7, 2008 by calling 888-562-6304.
About AutoNation, Inc.
AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's
largest automotive retailer and has been named America's Most Admired
Automotive Retailer by FORTUNE Magazine in five of the last seven years. A
component of the Standard and Poor's 500 Index, AutoNation owns and operates
319 new vehicle franchises in 15 states. For additional information, please
visit http://corp.AutoNation.com or www.AutoNation.com, where more than 80,000
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, including its long-term growth targets.
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 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 CONDENSED CONSOLIDATED INCOME STATEMENTS
($ in millions, except per share data)
Three Months Ended Six Months Ended
June 30,June 30,
2008 2007 2008 2007
Revenue:
New vehicle $2,178.4 $2,587.4 $4,376.5 $5,010.4
Used vehicle 940.4 1,080.6 1,920.8 2,146.8
Parts and service 637.8 641.7 1,292.3 1,286.3
Finance and insurance, net 136.0 150.1 280.9 296.3
Other 17.0 17.1 34.6 34.2
Total revenue 3,909.6 4,476.9 7,905.1 8,774.0
Cost of sales:
New vehicle 2,034.6 2,408.5 4,086.7 4,654.8
Used vehicle 860.2 987.9 1,756.5 1,951.3
Parts and service 359.6 359.9 730.1 723.1
Other7.7 6.5 15.2 13.2
Total cost of sales 3,262.1 3,762.8 6,588.5 7,342.4
Gross profit 647.5 714.1 1,316.6 1,431.6
Selling, general and
administrative expenses 488.8 507.4 986.7 1,018.3
Depreciation and amortization 22.4 21.3 45.9 42.2
Other expenses (income), net5.2 1.5 5.5 1.5
Operating income 131.1 183.9 278.5 369.6
Floorplan interest expense(21.5)(32.6)(46.8)(64.3)
Other interest expense(21.6)(26.4)(48.4)(52.8)
Interest income 0.3 0.9 0.8 1.8
Other gains (losses), net 0.9 0.7 (0.9) 0.9
Income from continuing operations
before income taxes 89.2 126.5 183.2 255.2
Provision for income taxes 36.6 47.2 74.7 93.3
Net income from continuing
operations52.6 79.3 108.5 161.9
Loss from discontinued operations,
net of income taxes (0.8) (2.0) (6.0) (7.0)
Net income$51.8 $77.3$102.5$154.9
Diluted earnings (loss) per share:
Continuing operations $0.29 $0.38 $0.60 $0.77
Discontinued operations $(0.00) $(0.01) $(0.03) $(0.03)
Net income $0.29 $0.37 $0.57 $0.74
Weighted average common shares
outstanding 178.7 208.6 179.6 209.7
Common shares outstanding, net of
treasury stock, at June 30 176.7 201.9 176.7 201.9
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended June 30,
2008 2007 $ Variance % Variance
Revenue:
New vehicle $2,178.4 $2,587.4$(409.0)(15.8)
Retail used vehicle 789.3 859.7 (70.4) (8.2)
Wholesale 151.1 220.9 (69.8)(31.6)
Used vehicle940.41,080.6 (140.2)(13.0)
Parts and service 637.8 641.7 (3.9) (0.6)
Finance and insurance, net 136.0 150.1 (14.1) (9.4)
Other17.0 17.1 (0.1)
Total revenue $3,909.6 $4,476.9$(567.3)(12.7)
Gross profit:
New vehicle$143.8 $178.9 $(35.1)(19.6)
Retail used vehicle81.3 91.9 (10.6)(11.5)
Wholesale (1.1) 0.8 (1.9)
Used vehicle 80.2 92.7 (12.5)(13.5)
Parts and service 278.2 281.8 (3.6) (1.3)
Finance and insurance 136.0 150.1 (14.1) (9.4)
Other 9.3 10.6 (1.3)
Total gross profit 647.5 714.1 (66.6) (9.3)
Selling, general and
administrative expenses 488.8 507.4 18.6 3.7
Depreciation and amortization 22.4 21.3 (1.1)
Other expenses (income), net 5.21.5 (3.7)
Operating income131.1 183.9 (52.8)(28.7)
Floorplan interest expense (21.5) (32.6) 11.1
Other interest expense (21.6) (26.4) 4.8
Interest income 0.30.9 (0.6)
Other gains (losses), net0.90.70.2
Income from continuing
operations before income
taxes $89.2 $126.5 $(37.3)(29.5)
Retail vehicle unit sales:
New73,811 84,295(10,484)(12.4)
Used 49,925 51,802 (1,877) (3.6)
123,736136,097(12,361) (9.1)
Revenue per vehicle retailed:
New $29,513$30,695$(1,182) (3.9)
Used $15,810$16,596 $(786) (4.7)
Gross profit per vehicle
retailed:
New$1,948 $2,122 $(174) (8.2)
Used $1,628 $1,774 $(146) (8.2)
Finance and insurance $1,099 $1,103$(4) (0.4)
Operating Highlights Six Months Ended June 30,
2008 2007 $ Variance % Variance
Revenue:
New vehicle $4,376.5 $5,010.4$(633.9)(12.7)
Retail used vehicle 1,603.61,720.3 (116.7) (6.8)
Wholesale 317.2 426.5 (109.3)(25.6)
Used vehicle 1,920.82,146.8 (226.0)(10.5)
Parts and service 1,292.31,286.36.0 0.5
Finance and insurance, net 280.9 296.3 (15.4) (5.2)
Other34.6 34.20.4
Total revenue $7,905.1 $8,774.0$(868.9) (9.9)
Gross profit:
New vehicle$289.8 $355.6 $(65.8)(18.5)
Retail used vehicle 165.8 191.9 (26.1)(13.6)
Wholesale (1.5) 3.6 (5.1)
Used vehicle164.3 195.5 (31.2)(16.0)
Parts and service 562.2 563.2 (1.0) (0.2)
Finance and insurance 280.9 296.3 (15.4) (5.2)
Other19.4 21.0 (1.6)
Total gross profit 1,316.61,431.6 (115.0) (8.0)
Selling, general and
administrative expenses 986.71,018.3 31.6 3.1
Depreciation and amortization 45.9 42.2 (3.7)
Other expenses (income), net 5.51.5 (4.0)
Operating income278.5 369.6 (91.1)(24.6)
Floorplan interest expense (46.8) (64.3) 17.5
Other interest expense (48.4) (52.8) 4.4
Interest income 0.81.8 (1.0)
Other gains (losses), net (0.9) 0.9 (1.8)
Income from continuing
operations before income
taxes $183.2 $255.2 $(72.0)(28.2)
Retail vehicle unit sales:
New 145,473162,407(16,934)(10.4)
Used 100,704104,652 (3,948) (3.8)
246,177267,059(20,882) (7.8)
Revenue per vehicle retailed:
New $30,085$30,851 $(766) (2.5)
Used $15,924$16,438 $(514) (3.1)
Gross profit per vehicle
retailed:
New$1,992 $2,190 $(198) (9.0)
Used $1,646 $1,834 $(188)(10.3)
Finance and insurance $1,141 $1,109$32 2.9
Three Months Ended Six Months Ended
Operating Percentages June 30, June 30,
2008(%)2007(%)2008(%) 2007(%)
Revenue mix percentages:
New vehicle 55.7 57.8 55.4 57.1
Used vehicle 24.1 24.1 24.3 24.5
Parts and service 16.3 14.3 16.3 14.7
Finance and insurance, net 3.53.43.6 3.4
Other 0.40.40.4 0.3
100.0 100.0 100.0 100.0
Gross profit mix percentages:
New vehicle 22.2 25.1 22.0 24.8
Used vehicle 12.4 13.0 12.5 13.7
Parts and service 43.0 39.5 42.7 39.3
Finance and insurance 21.0 21.0 21.3 20.7
Other 1.41.41.5 1.5
100.0 100.0 100.0 100.0
Operating items as a percentage
of revenue:
Gross profit:
New vehicle6.66.96.6 7.1
Used vehicle - retail 10.3 10.7 10.3 11.2
Parts and service 43.6 43.9 43.5 43.8
Total 16.6 16.0 16.7 16.3
Selling, general and
administrative expenses 12.5 11.3 12.5 11.6
Operating income 3.44.13.5 4.2
Operating items as a percentage
of total gross profit:
Selling, general and
administrative expenses 75.5 71.1 74.9 71.1
Operating income 20.2 25.8 21.2 25.8
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Capital Expenditures / Stock
Repurchases Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 20082007
Capital expenditures $18.0$36.6 $41.5$78.9
Acquisitions $- $0.8 $29.4 $0.8
Proceeds from exercises of stock
options $-$12.5 $1.0$88.6
Stock repurchases:
Aggregate purchase price$26.3 $189.6 $54.1 $239.9
Shares repurchased (in millions) 1.9 8.73.8 11.0
Floorplan Assistance Three Months Ended Six Months Ended
and Expense June 30, June 30,
2008 2007 Variance 2008 2007 Variance
Floorplan assistance earned
(included in cost of sales) $19.6 $24.3 $(4.7) $40.6 $48.4 $(7.8)
Floorplan interest expense
(new vehicles) $(20.8) $(32.4) 11.6 $(45.9) $(64.0) 18.1
Net inventory carrying
cost $(1.2) $(8.1) $6.9 $(5.3) $(15.6) $10.3
Balance Sheet and Other
Highlights June 30, December 31, June 30,
200820072007
Cash and cash equivalents $42.1 $33.0 $31.7
Inventory $2,295.4$2,281.5$2,289.2
Total floorplan notes payable $2,245.0$2,142.7$2,053.6
Non-vehicle debt$1,518.1$1,775.8$1,528.6
Equity $3,535.1$3,473.5$3,738.1
New days supply (industry standard
of selling days, including fleet) 62 days 52 days 55 days
Used days supply (trailing 30 days) 42 days 44 days 44 days
Brand Mix - New Vehicle
Revenue % Three Months Ended Six Months Ended
June 30, June 30,
2008(%)2007(%) 2008(%) 2007(%)
Detroit 3:
Ford, Lincoln-Mercury 11.9 15.1 12.8 14.9
Chevrolet, Pontiac, Buick,
Cadillac, GMC 12.2 13.0 12.6 13.4
Chrysler, Jeep, Dodge 5.46.7 5.9 6.6
Detroit 3 total29.5 34.8 31.3 34.9
Import Premium Luxury:
Mercedes 12.5 11.4 12.2 11.8
BMW6.96.7 6.7 6.4
Lexus 3.93.9 4.0 3.9
Other premium luxury (Land
Rover, Porsche) 2.73.1 2.7 3.1
Premium Luxury total 26.0 25.1 25.6 25.2
Volume Imports:
Honda 11.59.3 10.5 9.2
Toyota17.4 16.0 16.8 15.4
Nissan 9.59.0 9.7 9.4
Other imports 6.15.8 6.1 5.9
Import total 44.5 40.1 43.1 39.9
100.0 100.0 100.0100.0
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Comparable Basis Reconciliations*
Three Months Ended June 30,
Diluted Earnings
Net Income Per Share
2008 2007 2008 2007
As reported $51.8 $77.3 $0.29$0.37
Discontinued operations, net
of income taxes 0.82.0 $0.00$0.01
From continuing operations, as
reported52.6 79.3 $0.29$0.38
Income tax adjustments - (3.5) $- $(0.02)
Stock compensation expense
adjustment 3.1 - $0.02 $-
Franchise impairments 3.0 - $0.02 $-
Adjusted$58.7 $75.8 $0.33$0.36
Six Months Ended June 30,
Diluted Earnings
Net Income Per Share
2008 2007 2008 2007
As reported$102.5 $154.9 $0.57$0.74
Discontinued operations, net
of income taxes 6.07.0 $0.03$0.03
From continuing operations, as
reported 108.5 161.9 $0.60$0.77
Income tax adjustments - (8.6) $- $(0.04)
Stock compensation expense
adjustment3.1 - $0.02 $-
Franchise impairments 3.0 - $0.02 $-
Adjusted $114.6 $153.3$0.64$0.73
* Please refer to the "Non-GAAP Financial Measures" section of the Press
Release.
Business Assumptions Impacting Long-term Average EPS Growth Target of
10% to 12% Per Year:
U.S. light vehicle annual unit sales assumes recovery in key markets
Continued opportunistic redeployment share repurchase, capital
of cash flow expenditures and acquisitions
Targeted return on incremental
invested capital approximately 15% after-tax
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended June 30,
2008 2007 $ Variance % Variance
Revenue:
New vehicle $2,168.8 $2,587.4$(418.6) (16.2)
Retail used vehicle 784.2 859.7 (75.5) (8.8)
Wholesale 148.9 220.4 (71.5) (32.4)
Used vehicle 933.11,080.1 (147.0) (13.6)
Parts and service 634.3 641.7 (7.4) (1.2)
Finance and insurance, net 135.4 150.1 (14.7) (9.8)
Other5.36.5 (1.2) (18.5)
Total revenue $3,876.9 $4,465.8$(588.9) (13.2)
Gross profit:
New vehicle $143.1 $178.9 $(35.8) (20.0)
Retail used vehicle 80.8 91.9 (11.1) (12.1)
Wholesale(1.7) 0.3 (2.0)
Used vehicle79.1 92.2 (13.1) (14.2)
Parts and service 275.9 281.2 (5.3) (1.9)
Finance and insurance 135.4 150.1 (14.7) (9.8)
Other5.76.8 (1.1)
Total gross profit $639.2 $709.2 $(70.0) (9.9)
Retail vehicle unit sales:
New 73,545 84,295(10,750) (12.8)
Used 49,674 51,802 (2,128) (4.1)
123,219136,097(12,878) (9.5)
Revenue per vehicle retailed:
New $29,489$30,695$(1,206) (3.9)
Used $15,787$16,596 $(809) (4.9)
Gross profit per vehicle
retailed:
New $1,946 $2,122 $(176) (8.3)
Used $1,627 $1,774 $(147) (8.3)
Finance and insurance $1,099 $1,103$(4) (0.4)
Operating Highlights Six Months Ended June 30,
2008 2007 $ Variance % Variance
Revenue:
New vehicle $4,356.3 $5,010.4$(654.1) (13.1)
Retail used vehicle 1,593.51,720.3 (126.8) (7.4)
Wholesale 313.4 425.5 (112.1) (26.3)
Used vehicle 1,906.92,145.8 (238.9) (11.1)
Parts and service1,284.11,286.3 (2.2) (0.2)
Finance and insurance, net 279.8 296.3 (16.5) (5.6)
Other 11.8 13.5 (1.7) (12.6)
Total revenue $7,838.9 $8,752.3$(913.4) (10.4)
Gross profit:
New vehicle $288.2 $355.6 $(67.4) (19.0)
Retail used vehicle 164.6 191.9 (27.3) (14.2)
Wholesale(2.5) 2.6 (5.1)
Used vehicle 162.1 194.5 (32.4) (16.7)
Parts and service 557.3 562.0 (4.7) (0.8)
Finance and insurance 279.8 296.3 (16.5) (5.6)
Other 12.2 13.5 (1.3)
Total gross profit $1,299.6 $1,421.9$(122.3) (8.6)
Retail vehicle unit sales:
New 144,929162,407(17,478) (10.8)
Used 100,206104,652 (4,446) (4.2)
245,135267,059(21,924) (8.2)
Revenue per vehicle retailed:
New $30,058$30,851 $(793) (2.6)
Used $15,902$16,438 $(536) (3.3)
Gross profit per vehicle
retailed:
New $1,989 $2,190 $(201) (9.2)
Used $1,643 $1,834 $(191) (10.4)
Finance and insurance $1,141 $1,109$322.9
Three Months EndedSix Months Ended
Operating Percentages June 30, June 30,
2008(%)2007(%)2008(%) 2007(%)
Revenue mix percentages:
New vehicle 55.9 57.9 55.6 57.2
Used vehicle 24.1 24.2 24.3 24.5
Parts and service16.4 14.4 16.4 14.7
Finance and insurance, net3.53.43.6 3.4
Other 0.10.10.1 0.2
100.0 100.0 100.0 100.0
Gross profit mix percentages:
New vehicle 22.4 25.2 22.2 25.0
Used vehicle 12.4 13.0 12.5 13.7
Parts and service43.2 39.7 42.9 39.5
Finance and insurance21.2 21.2 21.5 20.8
Other 0.80.90.9 1.0
100.0 100.0 100.0 100.0
Operating items as a percentage
of revenue:
Gross Profit:
New vehicle6.66.96.6 7.1
Used vehicle - retail 10.3 10.7 10.3 11.2
Parts and service 43.5 43.8 43.4 43.7
Total 16.5 15.9 16.6 16.2
SOURCE AutoNation, Inc.
