FORT LAUDERDALE, Fla., July 26 /PRNewswire-FirstCall/ -- AutoNation,
Inc. (NYSE: AN), America's largest automotive retailer, today reported 2007
second- quarter net income from continuing operations of $79 million or
$0.38 per share, compared to year-ago net income from continuing operations
of $74 million or $0.33 per share. Last year's second quarter results
included one- time debt repurchase costs of approximately $21 million after
tax, or $.09 per share. Results for the second quarter of 2007 reflected a
decline in new vehicle retail sales especially in California and Florida,
partially offset by a tax adjustment.
Second-quarter 2007 revenue totaled $4.6 billion, compared to $4.9
billion in the year-ago period, driven primarily by lower new vehicle
sales. In the second-quarter, industry new vehicle retail sales for
California and Florida were off approximately 14%, based on CNW Research
data. AutoNation's decline for new vehicle unit sales for California and
Florida was 16%. Together, California and Florida represent approximately
50% of the Company's new vehicle business and 20% of the industry retail
new vehicles sold in the U.S.
Commenting on the second-quarter, Mike Jackson, Chairman and Chief
Executive Officer, said, "The second quarter was a challenging economic
environment for new vehicle sales driven largely by continued weakness in
the housing market in our key markets of Florida and California." Mr.
Jackson also noted, "A key force behind consumer spending in recent years
was the perceived growth in household wealth consumers had from the value
of increasing home prices and readily available home equity credit. With
the slumping housing market, consumers have been less willing to purchase
big-ticket items, including vehicles. We expect to continue to see a
challenging new vehicle retail market as long as the housing market
difficulties persist. AutoNation continues to have confidence in California
and Florida and views them as healthy markets over the long term."
For the six-month period ended June 30, 2007, the Company reported net
income from continuing operations of $162 million or $0.77 per share
compared to $172 million or $0.70 per share in the prior year. The
Company's revenue for the six-month period ended June 30, 2007 totaled $8.9
billion, down 5% compared to $9.4 billion in the prior year.
The Company also announced today that the Board of Directors approved
an extension of the employment agreements of Mr. Jackson and Michael E.
Maroone, the President and Chief Operating Officer of the Company, until
2010. Mr. Jackson has served as Chairman of the Board since January 2003
and as our Chief Executive Officer since September 1999. Mr. Maroone joined
the Company in 1997 and has served as our President and Chief Operating
Officer since August 1999.
The second quarter conference call may be accessed at 11:00 a.m.
Eastern Time today by phone at 866-269-9612 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 2:30 p.m. Eastern Time July 26,
2007 through August 2, 2007 by calling 800-475-6701 (access code # 875632).
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 six years. A
component of the Standard and Poor's 500 Index, AutoNation owns and
operates 321 new vehicle franchises in 16 states. For additional
information, please visit http://corp.AutoNation.com or http://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 for the three- and six-month
periods ended June 30, 2007 and 2006, adjusted in each case to exclude
certain items disclosed in the attached financial tables. As required by
SEC rules, the Company has provided reconciliations of these measures to
the most directly comparable GAAP measures, which are set forth in the
attachments to this release. The Company believes that each of the
foregoing non-GAAP financial measures improves the transparency of the
Company's disclosure, provides a meaningful presentation of the Company's
results from its core business operations excluding the impact of items not
related to the Company's ongoing core business operations, and improves the
period-to-period comparability of the Company's results from its core
business operations.
AUTONATION, INC.
UNAUDITED CONSOLIDATED INCOME STATEMENTS
($ in millions, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
Revenue:
New vehicle $2,631.5 $2,884.9 $5,094.7 $5,513.8
Used vehicle 1,104.5 1,171.3 2,193.1 2,282.8
Parts and service 653.8 648.2 1,310.4 1,289.9
Finance and insurance, net 152.3 167.6 300.6 316.4
Other 17.2 20.7 34.3 39.5
Total revenue 4,559.3 4,892.7 8,933.1 9,442.4
Cost of sales:
New vehicle 2,450.1 2,674.2 4,734.1 5,106.9
Used vehicle 1,010.2 1,067.8 1,994.1 2,067.4
Parts and service 366.8 360.5 736.9 720.0
Other 6.5 8.9 13.1 16.7
Total cost of sales 3,833.6 4,111.4 7,478.2 7,911.0
Gross profit 725.7 781.3 1,454.9 1,531.4
Selling, general and
administrative expenses 517.7 548.4 1,038.9 1,077.5
Depreciation and amortization 21.6 20.7 42.8 40.0
Other expenses, net 1.6 0.2 1.6 0.2
Operating income 184.8 212.0 371.6 413.7
Floorplan interest expense (33.5) (36.1) (66.0) (67.0)
Other interest expense (26.5) (25.2) (53.0) (37.2)
Other interest expense -
senior note repurchases - (34.5) - (34.5)
Interest income 0.9 3.1 1.8 6.6
Other gains, net 0.8 0.7 1.0 0.7
Income from continuing
operations before income
taxes 126.5 120.0 255.4 282.3
Provision for income taxes 47.2 46.1 93.4 110.6
Net income from continuing
operations 79.3 73.9 162.0 171.7
Loss from discontinued
operations, net of income
taxes (2.0) (1.2) (7.1) (11.8)
Net income $77.3 $72.7 $154.9 $159.9
Diluted earnings (loss) per
share:
Continuing operations $0.38 $0.33 $0.77 $0.70
Discontinued operations $(0.01) $(0.01) $(0.03) $(0.05)
Net income $0.37 $0.32 $0.74 $0.65
Weighted average common and
common equivalent shares
outstanding 208.6 225.2 209.7 246.5
Common shares outstanding, net
of treasury stock 201.9 213.0 201.9 213.0
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended June 30,
$ %
2007 2006 Variance Variance
Revenue:
New vehicle $2,631.5 $2,884.9 $(253.4) (8.8)
Retail used vehicle 880.1 937.9 (57.8) (6.2)
Wholesale 224.4 233.4 (9.0) (3.9)
Used vehicle 1,104.5 1,171.3 (66.8) (5.7)
Parts and service 653.8 648.2 5.6 0.9
Finance and insurance, net 152.3 167.6 (15.3) (9.1)
Other 17.2 20.7 (3.5)
Total revenue $4,559.3 $4,892.7 $(333.4) (6.8)
Gross profit:
New vehicle $181.4 $210.7 $(29.3) (13.9)
Retail used vehicle 93.6 103.2 (9.6) (9.3)
Wholesale 0.7 0.3 0.4
Used vehicle 94.3 103.5 (9.2) (8.9)
Parts and service 287.0 287.7 (0.7) (0.2)
Finance and insurance 152.3 167.6 (15.3) (9.1)
Other 10.7 11.8 (1.1)
Total gross profit 725.7 781.3 (55.6) (7.1)
Selling, general and
administrative expenses 517.7 548.4 30.7 5.6
Depreciation and amortization 21.6 20.7 (0.9)
Other expenses, net 1.6 0.2 (1.4)
Operating income 184.8 212.0 (27.2) (12.8)
Floorplan interest expense (33.5) (36.1) 2.6
Other interest expense (26.5) (25.2) (1.3)
Other interest expense - senior
note repurchases - (34.5) 34.5
Interest income 0.9 3.1 (2.2)
Other gains, net 0.8 0.7 0.1
Income from continuing
operations before income
taxes $126.5 $120.0 $6.5 5.4
Retail vehicle unit sales:
New 85,768 96,932 (11,164) (11.5)
Used 53,011 57,781 (4,770) (8.3)
138,779 154,713 (15,934) (10.3)
Revenue per vehicle retailed:
New $30,682 $29,762 $920 3.1
Used $16,602 $16,232 $370 2.3
Gross profit per vehicle
retailed:
New $2,115 $2,174 $(59) (2.7)
Used $1,766 $1,786 $(20) (1.1)
Finance and insurance $1,097 $1,083 $14 1.3
Operating Highlights Six Months Ended June 30,
$ %
2007 2006 Variance Variance
Revenue:
New vehicle $5,094.7 $5,513.8 $(419.1) (7.6)
Retail used vehicle 1,760.3 1,836.3 (76.0) (4.1)
Wholesale 432.8 446.5 (13.7) (3.1)
Used vehicle 2,193.1 2,282.8 (89.7) (3.9)
Parts and service 1,310.4 1,289.9 20.5 1.6
Finance and insurance, net 300.6 316.4 (15.8) (5.0)
Other 34.3 39.5 (5.2)
Total revenue $8,933.1 $9,442.4 $(509.3) (5.4)
Gross profit:
New vehicle $360.6 $406.9 $(46.3) (11.4)
Retail used vehicle 195.5 212.5 (17.0) (8.0)
Wholesale 3.5 2.9 0.6
Used vehicle 199.0 215.4 (16.4) (7.6)
Parts and service 573.5 569.9 3.6 0.6
Finance and insurance 300.6 316.4 (15.8) (5.0)
Other 21.2 22.8 (1.6)
Total gross profit 1,454.9 1,531.4 (76.5) (5.0)
Selling, general and
administrative expenses 1,038.9 1,077.5 38.6 3.6
Depreciation and amortization 42.8 40.0 (2.8)
Other expenses, net 1.6 0.2 (1.4)
Operating income 371.6 413.7 (42.1) (10.2)
Floorplan interest expense (66.0) (67.0) 1.0
Other interest expense (53.0) (37.2) (15.8)
Other interest expense - senior
note repurchases - (34.5) 34.5
Interest income 1.8 6.6 (4.8)
Other gains, net 1.0 0.7 0.3
Income from continuing
operations before income
taxes $255.4 $282.3 $(26.9) (9.5)
Retail vehicle unit sales:
New 165,279 184,045 (18,766) (10.2)
Used 107,111 114,004 (6,893) (6.0)
272,390 298,049 (25,659) (8.6)
Revenue per vehicle retailed:
New $30,825 $29,959 $866 2.9
Used $16,434 $16,107 $327 2.0
Gross profit per vehicle
retailed:
New $2,182 $2,211 $(29) (1.3)
Used $1,825 $1,864 $(39) (2.1)
Finance and insurance $1,104 $1,062 $42 4.0
Three Months Ended Six Months Ended
Operating Percentages June 30, June 30,
% 2007 % 2006 % 2007 % 2006
Revenue mix percentages:
New vehicle 57.7 59.0 57.0 58.4
Used vehicle 24.2 23.9 24.6 24.2
Parts and service 14.3 13.2 14.7 13.7
Finance and insurance, net 3.3 3.4 3.4 3.4
Other 0.5 0.5 0.3 0.3
100.0 100.0 100.0 100.0
Gross profit mix percentages:
New vehicle 25.0 27.0 24.8 26.6
Used vehicle 13.0 13.2 13.7 14.1
Parts and service 39.5 36.8 39.4 37.2
Finance and insurance 21.0 21.5 20.7 20.7
Other 1.5 1.5 1.4 1.4
100.0 100.0 100.0 100.0
Operating items as a percentage
of revenue:
Gross profit:
New vehicle 6.9 7.3 7.1 7.4
Used vehicle - retail 10.6 11.0 11.1 11.6
Parts and service 43.9 44.4 43.8 44.2
Total 15.9 16.0 16.3 16.2
Selling, general and
administrative expenses 11.4 11.2 11.6 11.4
Operating income 4.1 4.3 4.2 4.4
Operating items as a percentage
of total gross profit:
Selling, general and
administrative expenses 71.3 70.2 71.4 70.4
Operating income 25.5 27.1 25.5 27.0
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Three Months Ended Six Months Ended
Cash Flow Information June 30, June 30,
2007 2006 2007 2006
Capital expenditures $36.8 $29.1 $79.2 $48.9
Acquisitions $0.8 $ - $0.8 $67.4
Proceeds from exercises of stock
options $12.5 $19.3 $88.6 $51.6
Stock repurchases:
Aggregate purchase price $189.6 $1,218.6 $239.9 $1,218.6
Shares repurchased (in
millions) 8.7 53.1 11.0 53.1
Floorplan Assistance and Three Months Ended Six Months Ended
Expense June 30, June 30,
2007 2006 Variance 2007 2006 Variance
Floorplan assistance
earned (included in cost
of sales) $24.8 $29.3 $(4.5) $49.5 $55.4 $(5.9)
Floorplan interest expense (33.5) (36.1) 2.6 (66.0) (67.0) 1.0
Net floorplan cost $(8.7) $(6.8) $(1.9) $(16.5) $(11.6) $(4.9)
Balance Sheet and Other Highlights
June 30, December 31, June 30,
2007 2006 2006
Cash and cash equivalents $31.2 $52.6 $37.3
Inventory $2,346.6 $2,320.3 $2,706.2
Total floorplan notes
payable $2,099.8 $2,228.3 $2,433.5
Non-vehicle debt $1,528.6 $1,571.5 $1,493.5
Equity $3,738.1 $3,712.7 $3,683.0
New days supply (industry
standard of selling
days, including fleet) 56 days 51 days 60 days
Used days supply (trailing
30 days) 44 days 42 days 43 days
Brand Mix - New Vehicle Revenue %
Three Months Ended Six Months Ended
June 30, June 30,
% 2007 % 2006 % 2007 % 2006
Detroit 3:
Ford, Lincoln-Mercury 15.1 16.5 14.9 16.9
Chevrolet, Pontiac,
Buick, Cadillac, GMC 12.8 13.8 13.3 13.8
Chrysler, Jeep, Dodge 7.1 7.4 7.1 7.8
Detroit 3 total 35.0 37.7 35.3 38.5
Import Premium Luxury:
Mercedes 11.2 12.1 11.6 11.3
BMW 6.6 4.9 6.3 5.0
Lexus 3.8 3.3 3.9 3.4
Other premium luxury
(Land Rover, Porsche) 3.2 2.5 3.0 2.6
Premium Luxury total 24.8 22.8 24.8 22.3
Volume Imports:
Honda 9.1 8.8 9.0 8.6
Toyota 15.7 14.7 15.2 14.1
Nissan 9.1 9.7 9.4 10.1
Other imports 6.3 6.3 6.3 6.4
Import total 40.2 39.5 39.9 39.2
100.0 100.0 100.0 100.0
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Comparable Basis Reconciliations*
Three Months Ended June 30,
Diluted Earnings
Net Income Per Share
2007 2006 2007 2006
As reported $77.3 $72.7 $0.37 $0.32
Discontinued operations, net of
income taxes 2.0 1.2 $0.01 $0.01
From continuing operations, as
reported 79.3 73.9 $0.38 $0.33
Income tax adjustments (3.5) - $(0.02) $ -
Senior note repurchases - 21.3 $ - $0.09
Adjusted $75.8 $95.2 $0.36 $0.42
Six Months Ended June 30,
Net Income Diluted Earnings
Per Share
2007 2006 2007 2006
As reported $154.9 $159.9 $0.74 $0.65
Discontinued operations, net of
income taxes 7.1 11.8 $0.03 $0.05
From continuing operations, as
reported 162.0 171.7 $0.77 $0.70
Income tax adjustments (8.6) - $(0.04) $ -
Senior note repurchases - 21.0 $ - $0.09
Adjusted $153.4 $192.7 $0.73 $0.78
* Please refer to the "Non-GAAP Financial Measures" section of the
Press Release.
Business Assumptions Impacting Long-term Average EPS Growth Target of 10%
to 12% Per Year:
U.S. light vehicle annual intensely competitive, low 16
unit sales million units
SGA % reduction (over 2007, approximately 100 bp, excluding
2008 and 2009) stock option expense
(SGA % of gross profit less
floorplan interest expense)
Continued opportunistic share repurchase, capital
redeployment of cash flow expenditures and acquisitions
Targeted return on incremental
invested capital approximately 15% after-tax
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended June 30,
2007 2006 $ Variance % Variance
Revenue:
New vehicle $2,610.1 $2,884.9 $(274.8) (9.5)
Retail used vehicle 875.3 937.9 (62.6) (6.7)
Wholesale 221.4 232.7 (11.3) (4.9)
Used vehicle 1,096.7 1,170.6 (73.9) (6.3)
Parts and service 647.3 648.2 (0.9) (0.1)
Finance and insurance, net 152.7 167.9 (15.2) (9.1)
Other 6.6 8.4 (1.8)
Total revenue $4,513.4 $4,880.0 $(366.6) (7.5)
Gross profit:
New vehicle $179.5 $210.7 $(31.2) (14.8)
Retail used vehicle 93.3 103.3 (10.0) (9.7)
Wholesale 0.1 (0.4) 0.5
Used vehicle 93.4 102.9 (9.5) (9.2)
Parts and service 283.4 287.1 (3.7) (1.3)
Finance and insurance 152.7 167.9 (15.2) (9.1)
Other 6.9 6.7 0.2
Total gross profit $715.9 $775.3 $(59.4) (7.7)
Retail vehicle unit sales:
New 85,372 96,932 (11,560) (11.9)
Used 52,875 57,781 (4,906) (8.5)
138,247 154,713 (16,466) (10.6)
Revenue per vehicle retailed:
New $30,573 $29,762 $811 2.7
Used $16,554 $16,232 $322 2.0
Gross profit per vehicle
retailed:
New $2,103 $2,174 $(71) (3.3)
Used $1,765 $1,788 $(23) (1.3)
Finance and insurance $1,105 $1,085 $20 1.8
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except per vehicle data)
Operating Highlights Six Months Ended June 30,
2007 2006 $ Variance % Variance
Revenue:
New vehicle $5,038.4 $5,513.8 $(475.4) (8.6)
Retail used vehicle 1,746.2 1,836.4 (90.2) (4.9)
Wholesale 423.1 445.2 (22.1) (5.0)
Used vehicle 2,169.3 2,281.6 (112.3) (4.9)
Parts and service 1,293.7 1,289.9 3.8 0.3
Finance and insurance,
net 301.2 316.7 (15.5) (4.9)
Other 13.5 15.5 (2.0)
Total revenue $8,816.1 $9,417.5 $(601.4) (6.4)
Gross profit:
New vehicle $355.5 $406.9 $(51.4) (12.6)
Retail used vehicle 194.3 212.6 (18.3) (8.6)
Wholesale 2.3 1.6 0.7
Used vehicle 196.6 214.2 (17.6) (8.2)
Parts and service 564.5 568.7 (4.2) (0.7)
Finance and insurance 301.2 316.7 (15.5) (4.9)
Other 13.6 13.3 0.3
Total gross profit $1,431.4 $1,519.8 $(88.4) (5.8)
Retail vehicle unit sales:
New 164,282 184,045 (19,763) (10.7)
Used 106,736 114,004 (7,268) (6.4)
271,018 298,049 (27,031) (9.1)
Revenue per vehicle
retailed:
New $30,669 $29,959 $710 2.4
Used $16,360 $16,108 $252 1.6
Gross profit per vehicle
retailed:
New $2,164 $2,211 $(47) (2.1)
Used $1,820 $1,865 $(45) (2.4)
Finance and
insurance $1,111 $1,063 $48 4.5
Three Months Ended Six Months Ended
Operating Percentages June 30, June 30,
% 2007 % 2006 % 2007 % 2006
Revenue mix percentages:
New vehicle 57.8 59.1 57.1 58.5
Used vehicle 24.3 24.0 24.6 24.2
Parts and service 14.3 13.3 14.7 13.7
Finance and insurance,
net 3.4 3.4 3.4 3.4
Other 0.2 0.2 0.2 0.2
100.0 100.0 100.0 100.0
Gross profit mix percentages:
New vehicle 25.1 27.2 24.8 26.8
Used vehicle 13.0 13.3 13.7 14.1
Parts and service 39.6 37.0 39.4 37.4
Finance and insurance 21.3 21.7 21.0 20.8
Other 1.0 0.8 1.1 0.9
100.0 100.0 100.0 100.0
Operating items as a
percentage of revenue:
Gross Profit:
New vehicle 6.9 7.3 7.1 7.4
Used vehicle - retail 10.7 11.0 11.1 11.6
Parts and service 43.8 44.3 43.6 44.1
Total 15.9 15.9 16.2 16.1
SOURCE AutoNation, Inc.
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Related links:
http://corp.autonation.com
http://www.AutoNation.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20001017/AUTONATIONLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
http://www.prnewswire.com/comp/750525.html/
CONTACT:
Marc Cannon of AutoNation, Inc.,
+1-954-769-3146, cannonm@autonation.com
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