Group 1 Automotive Reports 2014 First Quarter Financial Results - WBOY.com: Clarksburg, Morgantown: News, Sports, Weather

Group 1 Automotive Reports 2014 First Quarter Financial Results

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SOURCE Group 1 Automotive, Inc.

HOUSTON, April 24, 2014 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI), an international, Fortune 500 automotive retailer, today reported 2014 first quarter net income of $31.3 million and diluted earnings per common share of $1.19 for the period ended March 31, 2014. Net income increased 7.1 percent from the comparable, adjusted prior-year period. On a GAAP basis, net income increased 41.5 percent over the first quarter 2013. GAAP results for first quarter 2013 included $7.1 million of net after-tax costs primarily related to our Brazil acquisition.

"Despite a difficult start to the year due to significant weather disruption, we were able to achieve respectable financial results for the quarter due to a very strong performance in March," said Earl J. Hesterberg, Group 1's president and chief executive officer. "Our March results were driven by all-time record performance in our U.K. operations and extremely strong vehicle sales in the U.S., especially in Texas and Oklahoma."

Consolidated Results for First Quarter 2014 (year-over-year comparable basis)

  • Total revenue increased 15.1 percent to $2.3 billion; total gross profit grew 12.5 percent to $338.1 million.
  • New vehicle revenues increased 14.3 percent. New vehicle gross profit increased 6.8 percent to $66.9 million as lower margins, down $121 per unit, partially offset the revenue growth. Same Store new vehicle unit sales grew 3.5 percent.
  • U.K. Same Store revenue increased 29.7 percent driven by 17.8 percent growth in new vehicle unit sales.
  • Retail used vehicle revenues increased 16.7 percent. Gross profit improved 6.3 percent to $42.8 million as lower margins, down $141 per unit, partially offset the revenue growth. Same Store used vehicle unit sales grew 5.0 percent.
  • Parts and service gross profit increased 13.3 percent on revenue growth of 13.4 percent. Same Store parts and service gross profit increased 6.7 percent on revenue growth of 6.3 percent.
  • Finance and Insurance (F&I) gross profit increased 19.3 percent. Same Store F&I gross profit per retail unit increased 10.8 percent to $1,391 per unit.
  • SG&A expenses as a percent of gross profit increased 80 basis points over adjusted 2013 results to 76.2 percent, primarily explained by a shift in business towards our foreign operations. On a Same Store basis, SG&A expenses as a percent of gross profit increased 10 basis points over adjusted 2013 results to 74.9 percent, primarily explained by the impact of the severe weather in the United States.

Segment Results for First Quarter 2014 (year-over-year comparable basis)

  • United States:

Group 1's U.S. revenues were $1.8 billion, an increase of 6.6 percent. The revenue growth was primarily explained by unit sales increases of 4.1 percent in new vehicles and 7.7 percent in retail used vehicles, as well as an increase of 6.5 percent in parts and service revenue. The revenue drove gross profit growth of 6.2 percent, reflecting the higher new and used retail volumes, flat parts and service margins, and an F&I increase of 8.9 percent, or $119, to $1,458 per retail unit.

On a comparable basis, SG&A expenses as a percent of gross profit improved 10 basis points to 74.7 percent and operating margin was 3.5 percent. Group 1's U.S. operations accounted for 81.1 percent of total revenues and 85.7 percent of total gross profit.

  • United Kingdom:

Group 1's U.K. operations accounted for 11.0 percent of total revenues and 8.5 percent of total gross profit. Reflecting significant acquisition activity over the past year and strong Same Store revenue growth of 29.7 percent, total revenue increased 44.8 percent to $247.7 million, and gross profit increased 49.9 percent. Revenue growth was primarily driven by 32.5 percent and 58.5 percent increases in new and used vehicle retail unit sales, respectively.

On a comparable basis, SG&A expenses as a percent of gross profit improved 470 basis points to 78.2 percent.

  • Brazil:

Group 1's Brazil operations accounted for 7.9 percent of total revenues and 5.8 percent of total gross profit. Gross profit was $19.7 million on revenues of $178.5 million. New vehicle sales were the primary revenue contributor at 70.4 percent, while new vehicles and parts and service were the primary gross profit contributors at 38.0 percent and 39.6 percent, respectively.

SG&A expenses as a percent of gross profit was at 95.1 percent and operating margin was 0.2 percent. The first quarter is seasonally the weakest of the year in Brazil and the Company expects to be profitable for the full year.

Corporate Development
As previously announced in January 2014, Group 1 acquired a Ford dealership and Hyundai dealership in California that are expected to generate $135 million in annualized revenue. Also in January 2014, Group 1 opened an additional Peugeot dealership in Brazil that was granted as an open point and is expected to generate $20 million in annual revenues. Two additional open points have been granted with openings targeted for late 2015. These additions include a Nissan franchise in Austin, Texas and a Land Rover franchise in Brazil. The Company will provide expected annual revenues for these open points as we announce their openings.

In early April 2014, Group 1 disposed of a Hyundai franchise in New Orleans, which generated $20 million of annual revenues.

Share Repurchase Authorization
During the quarter, Group 1 repurchased 270,054 shares at an average price per share of $62.74 for a total of $16.9 million. As of March 31, 2014, $54.5 million remains available under the Company's prior common stock share repurchase authorization. Purchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or in privately negotiated transactions.

First Quarter Earnings Conference Call Details
Group 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 visit www.group1corp.com/events. A webcast 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:    

1-877-870-4263

International:   

1-412-317-0790

A telephonic replay will be available following the call through May 26, 2014 at 9:00 a.m. ET by dialing:

Domestic:   

1-877-344-7529

International:   

1-412-317-0088

Replay ID:     

10044041

About Group 1 Automotive, Inc.
Group 1 owns and operates 150 automotive dealerships, 190 franchises, and 37 collision centers in the United States, the United Kingdom and Brazil that offer 34 brands of automobiles. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells 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:
Sheila Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | sroth@group1auto.com

Media contacts:
Pete DeLongchamps
V.P. Manufacturer Relations, Financial Services and Public Affairs
Group 1 Automotive, Inc.
713-647-5770 | pdelongchamps@group1auto.com 
or
Clint Woods
Pierpont 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, 


2014


2013


% Change

REVENUES:






New vehicle retail sales

$       1,268,836


$       1,110,235


14.3

Used vehicle retail sales

549,897


471,399


16.7

Used vehicle wholesale sales

89,173


74,551


19.6

Parts and service

269,317


237,510


13.4

Finance and insurance

83,640


70,137


19.3

Total revenues

2,260,863


1,963,832


15.1

COST OF SALES:






New vehicle retail sales

1,201,930


1,047,599


14.7

Used vehicle retail sales

507,096


431,123


17.6

Used vehicle wholesale sales

86,061


72,129


19.3

Parts and service

127,654


112,492


13.5

Total cost of sales

1,922,741


1,663,343


15.6

GROSS PROFIT

338,122


300,489


12.5

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

257,558


233,433


10.3

DEPRECIATION AND AMORTIZATION EXPENSE

9,925


8,413


18.0

OPERATING INCOME

70,639


58,643


20.5

OTHER EXPENSE:






Floorplan interest expense

(10,913)


(9,364)


16.5

Other interest expense, net

(10,513)


(9,242)


13.8

Other expense, net

-


(789)


(100.0)

INCOME BEFORE INCOME TAXES

49,213


39,248


25.4

PROVISION FOR INCOME TAXES

(17,910)


(17,130)


4.6

NET INCOME

$            31,303


$            22,118


41.5

Earnings allocated to participating securities

$            (1,156)


$               (930)


24.3

Earnings available to diluted common shares

$            30,147


$            21,188


42.3

DILUTED EARNINGS PER SHARE

$                1.19


$                0.88


35.2

Weighted average dilutive common shares outstanding

25,428


24,113


5.5

Weighted average participating securities

963


1,072


(10.2)

Total weighted average shares outstanding

26,391


25,185


4.8

 

Group 1 Automotive, Inc.

Consolidated Balance Sheets

(Dollars in thousands)










March 31,


December 31,





2014


2013


% Change

 ASSETS: 


(Unaudited)





 CURRENT ASSETS: 







 Cash and cash equivalents 


$            17,687


$            20,215


(12.5)

 Contracts in transit and vehicle receivables, net 


208,461


225,156


(7.4)

 Accounts and notes receivable, net 


131,494


135,058


(2.6)

 Inventories, net 


1,537,112


1,542,318


(0.3)

 Deferred income taxes 


18,262


21,150


(13.7)

 Prepaid expenses and other current assets 


23,257


24,041


(3.3)

 Total current assets 


1,936,273


1,967,938


(1.6)

 PROPERTY AND EQUIPMENT, net 


827,121


796,356


3.9

 GOODWILL AND INTANGIBLE FRANCHISE RIGHTS 


1,048,265


1,038,808


0.9

 OTHER ASSETS 


14,278


16,376


(12.8)

 Total assets 


$       3,825,937


$       3,819,478


0.2








 LIABILITIES AND STOCKHOLDERS' EQUITY: 







 CURRENT LIABILITIES: 







 Floorplan notes payable - credit facility and other 


$       1,108,849


$       1,143,104


(3.0)

 Offset account related to floorplan notes payable - credit facility 


(33,646)


(56,198)


(40.1)

 Floorplan notes payable - manufacturer affiliates 


314,976


346,572


(9.1)

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


29,967


36,225


(17.3)

 Accounts payable 


280,454


254,930


10.0

 Accrued expenses 


150,319


140,543


7.0

 Total current liabilities 


1,850,919


1,865,176


(0.8)

 2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $182,753 at March 31, 2014 and December 31, 2013) 


162,425


160,334


1.3

 3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of $115,000 at March 31, 2014 and December 31, 2013) 


85,255


84,305


1.1

 MORTGAGE FACILITY, net of current maturities 


63,786


64,271


(0.8)

 ACQUISITION LINE 


49,970


60,000


(16.7)

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


260,471


250,958


3.8

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


43,135


43,821


(1.6)

 DEFERRED INCOME TAXES 


150,009


152,291


(1.5)

 LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES 


25,661


26,078


(1.6)

 OTHER LIABILITIES 


49,052


47,975


2.2

 COMMITMENTS AND CONTINGENCIES 







 TEMPORARY EQUITY - REDEEMABLE EQUITY PORTION OF THE 3.00% CONVERTIBLE SENIOR NOTES 


28,194


29,094


(3.1)

 STOCKHOLDERS' EQUITY: 







 Common stock 


258


257


0.4

 Additional paid-in capital 


368,728


368,641


0.0

 Retained earnings 


803,302


776,101


3.5

 Accumulated other comprehensive loss 


(44,242)


(51,677)


(14.4)

 Treasury stock 


(70,986)


(58,147)


22.1

 Total stockholders' equity 


1,057,060


1,035,175


2.1

 Total liabilities and stockholders' equity 


$       3,825,937


$       3,819,478


0.2

 


Group 1 Automotive, Inc.

Consolidated Statements of Adjusted Cash Flows from Operating Activities

(Unaudited)

(Dollars in thousands)












Three Months Ended March 31,




2014


2013


% Change









Net income


$         31,303


$         22,118


41.5

Adjustments to reconcile net income to net cash provided by operating activities:








Depreciation and amortization


9,925


8,413


18.0


Deferred income taxes


2,913


9,127


(68.1)


Gain on disposition of assets and franchise


(16)


(578)


(97.2)


Stock-based compensation


3,660


3,403


7.6


Amortization of debt discount and issue costs


3,612


3,386


6.7


Other


(189)


55


(443.6)

Changes in operating assets and liabilities, net of effects of







  acquisitions and dispositions:








Accounts payable and accrued expenses


46,555


53,266


(12.6)


Accounts and notes receivable


4,822


1,838


162.4


Inventories


38,269


(84,053)


145.5


Contracts-in-transit and vehicle receivables


16,780


14,065


19.3


Prepaid expenses and other assets


2,697


1,764


52.9


Floorplan notes payable - credit facilities (1)


(43,981)


39,419


(211.6)


Floorplan notes payable - manufacturer affiliates (2)


(47,173)


25,769


(283.1)


Deferred revenues


504


79


538.0

Adjusted net cash provided by operating activities (3)


$         69,681


$         98,071


(28.9)









(1)

Excludes net acquisition/(disposition) related activity of $8,988 and $(7,323) for the three months ended March 31, 2014 and 2013, respectively.



(2)

Excludes net acquisition/(disposition) related activity of $19,530 and $3,274 for the three months ended March 31, 2014 and 2013, respectively.



(3)

We believe that all floorplan financing of inventory purchases in the normal course of business should correspond with the related inventory activity and be classified as an operating activity.  As a result, we use the non-GAAP measure "Adjusted net cash provided by operating activities" to evaluate our cash flows. We believe that this classification eliminates excess volatility in our operating cash flows prepared in accordance with U.S. GAAP and improves period-to-period comparability.

 

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)











Three Months Ended





March 31,





2014 (%)


2013 (%)


NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:





Region

Geographic Market






East

Massachusetts


5.4


6.4



Georgia


4.4


4.3



New Jersey


3.3


4.8



New Hampshire


2.1


2.3



Louisiana


2.0


2.5



New York


1.7


2.9



South Carolina


1.3


1.6



Mississippi


1.3


1.8



Florida


1.3


1.4



Alabama


0.8


0.9



Maryland


0.4


0.6





24.0


29.5









West

Texas


34.2


34.2



California


9.6


13.4



Oklahoma


8.5


7.4



Kansas


2.4


2.5



Louisiana


0.7


-





55.4


57.5
















International

Brazil


10.7


4.5



United Kingdom


9.9


8.5





100.0


100.0









NEW VEHICLE UNIT SALES BRAND MIX:






Toyota/Scion/Lexus


25.8


27.6


Ford/Lincoln


12.1


11.5


Honda/Acura


11.6


12.3


BMW/MINI


11.2


10.3


Nissan/Infiniti


9.7


10.6


Volkswagen/Audi/Porsche


6.6


6.9


Chevrolet/GMC/Buick/Cadillac


5.5


5.3


Hyundai/Kia


5.4


4.5


Chrysler/Dodge/Jeep/RAM


4.6


4.3


Mercedes Benz/smart/Sprinter


4.0


4.5


Other


3.5


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,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$       1,012,552


$          962,633


5.2

Used vehicle retail sales


450,487


418,339


7.7

Used vehicle wholesale sales


64,471


57,669


11.8

Total used


514,958


476,008


8.2

Parts and service


230,319


216,354


6.5

Finance and insurance


76,797


66,792


15.0

Total


$       1,834,626


$       1,721,787


6.6








GROSS MARGIN %:







New vehicle retail sales


5.0


5.4



Used vehicle retail sales


8.3


9.0



Used vehicle wholesale sales


3.5


3.7



Total used


7.7


8.3



Parts and service


53.1


53.1



Finance and insurance


100.0


100.0



Total


15.8


15.9










GROSS PROFIT:







New vehicle retail sales


$            50,935


$            51,582


(1.3)

Used vehicle retail sales


37,440


37,619


(0.5)

Used vehicle wholesale sales


2,256


2,125


6.2

Total used


39,696


39,744


(0.1)

Parts and service


122,303


114,823


6.5

Finance and insurance


76,797


66,793


15.0

Total


$          289,731


$          272,942


6.2








UNITS SOLD:







Retail new vehicles sold


29,947


28,778


4.1

Retail used vehicles sold


22,743


21,116


7.7

Wholesale used vehicles sold


9,950


9,657


3.0

Total used


32,693


30,773


6.2








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$            33,811


$            33,450


1.1

Used vehicle retail


$            19,808


$            19,811


(0.0)








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$              1,701


$              1,792


(5.1)

Used vehicle retail sales


1,646


1,782


(7.6)

Used vehicle wholesale sales


227


220


3.2

Total used


1,214


1,292


(6.0)

Finance and insurance (per retail unit)


$              1,458


$              1,339


8.9

OTHER: (1)







SG&A expenses


$          216,396


$          204,091


6.0

SG&A as % revenues


11.8


11.9



SG&A as % gross profit


74.7


74.8



Operating margin %


3.5


3.6



Pretax margin %


2.5


2.6










INTEREST EXPENSE:







Floorplan interest


$            (8,584)


$            (8,296)


3.5

Floorplan assistance


9,715


8,173


18.9

 Net floorplan income (expense) 


$              1,131


$               (123)


1,019.5

           Other interest expense, net


$          (10,263)


$            (9,041)


13.5



(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,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$          130,601


$            94,824


37.7

Used vehicle retail sales


71,477


44,965


59.0

Used vehicle wholesale sales


19,645


13,765


42.7

Total used


91,122


58,730


55.2

Parts and service


21,360


14,771


44.6

Finance and insurance


4,618


2,753


67.7

Total


$          247,701


$          171,078


44.8








GROSS MARGIN %:







New vehicle retail sales


6.5


7.0



Used vehicle retail sales


5.0


4.9



Used vehicle wholesale sales


2.3


0.6



Total used


4.4


3.9



Parts and service


54.2


50.7



Finance and insurance


100.0


100.0



Total


11.6


11.2










GROSS PROFIT:







New vehicle retail sales


$              8,498


$              6,632


28.1

Used vehicle retail sales


3,589


2,217


61.9

Used vehicle wholesale sales


451


84


436.9

Total used


4,040


2,301


75.6

Parts and service


11,573


7,484


54.6

Finance and insurance


4,618


2,753


67.7

Total


$            28,729


$            19,170


49.9








UNITS SOLD:







Retail new vehicles sold


3,745


2,827


32.5

Retail used vehicles sold


2,739


1,728


58.5

Wholesale used vehicles sold


2,161


1,443


49.8

Total used


4,900


3,171


54.5








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$            34,873


$            33,542


4.0

Used vehicle retail


$            26,096


$            26,021


0.3








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$              2,269


$              2,346


(3.3)

Used vehicle retail sales


1,310


1,283


2.1

Used vehicle wholesale sales


209


58


260.3

Total used


824


726


13.5

Finance and insurance (per retail unit)


$                 712


$                 604


17.9

OTHER:(1)







SG&A expenses


$            22,472


$            15,894


41.4

SG&A as % revenues


9.1


9.3



SG&A as % gross profit


78.2


82.9



Operating margin %


2.2


1.6



Pretax margin %


1.9


1.3










INTEREST EXPENSE:







Floorplan interest


$               (433)


$               (306)


41.5

Floorplan assistance


102


-


100.0

 Net floorplan expense 


$               (331)


$               (306)


8.2

           Other interest expense, net


$               (451)


$               (213)


111.7



(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 Months Ended March 31,



2014


2013 (2)


% Change

REVENUES:







New vehicle retail sales


$         125,683


$           52,778


138.1

Used vehicle retail sales


27,933


8,095


245.1

Used vehicle wholesale sales


5,057


3,117


62.2

Total used


32,990


11,212


194.2

Parts and service


17,638


6,385


176.2

Finance and insurance


2,225


592


275.8

Total


$         178,536


$           70,967


151.6








GROSS MARGIN %:







New vehicle retail sales


5.9


8.4



Used vehicle retail sales


6.3


5.4



Used vehicle wholesale sales


8.0


6.8



Total used


6.6


5.8



Parts and service


44.1


42.4



Finance and insurance


100.0


100.0



Total


11.0


11.8










GROSS PROFIT:







New vehicle retail sales


$             7,473


$             4,422


69.0

Used vehicle retail sales


1,772


440


302.7

Used vehicle wholesale sales


405


212


91.0

Total used


2,177


652


233.9

Parts and service


7,787


2,710


187.3

Finance and insurance


2,225


592


275.8

Total


$           19,662


$             8,376


134.7








UNITS SOLD:







Retail new vehicles sold


4,057


1,491


172.1

Retail used vehicles sold


1,395


394


254.1

Wholesale used vehicles sold


673


235


186.4

Total used


2,068


629


228.8








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$           30,979


$           35,398


(12.5)

Used vehicle retail


$           20,024


$           20,546


(2.5)








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$             1,842


$             2,966


(37.9)

Used vehicle retail sales


1,270


1,117


13.7

Used vehicle wholesale sales


602


902


(33.3)

Total used


1,053


1,037


1.5

Finance and insurance (per retail unit)


$                408


$                314


29.9

OTHER: (1)







SG&A expenses


$           18,690


$             6,702


178.9

SG&A as % revenues


10.5


9.4



SG&A as % gross profit


95.1


80.0



Operating margin %


0.2


2.0



Pretax margin %


(0.7)


1.0










INTEREST EXPENSE:







Floorplan interest expense


$            (1,896)


$               (762)


148.8

Floorplan assistance


-


-


-

Net floorplan expense


$            (1,896)


$               (762)


148.8

Other interest income, net


$                201


$                  12


1,575.0



(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.



(2)

Results are for the period from the date of acquisition (Feburary 28, 2013) through March 31, 2013.

 


Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended March 31,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$                 1,268,836


$                 1,110,235


14.3

Used vehicle retail sales


549,897


471,399


16.7

Used vehicle wholesale sales


89,173


74,551


19.6

Total used


639,070


545,950


17.1

Parts and service


269,317


237,510


13.4

Finance and insurance


83,640


70,137


19.3

Total


$                 2,260,863


$                 1,963,832


15.1








GROSS MARGIN %:







New vehicle retail sales


5.3


5.6



Used vehicle retail sales


7.8


8.5



Used vehicle wholesale sales


3.5


3.2



Total used


7.2


7.8



Parts and service


52.6


52.6



Finance and insurance


100.0


100.0



Total


15.0


15.3










GROSS PROFIT:







New vehicle retail sales


$                      66,906


$                      62,636


6.8

Used vehicle retail sales


42,801


40,276


6.3

Used vehicle wholesale sales


3,112


2,422


28.5

Total used


45,913


42,698


7.5

Parts and service


141,663


125,018


13.3

Finance and insurance


83,640


70,137


19.3

Total


$                    338,122


$                    300,489


12.5








UNITS SOLD:







Retail new vehicles sold


37,749


33,096


14.1

Retail used vehicles sold


26,877


23,238


15.7

Wholesale used vehicles sold


12,784


11,335


12.8

Total used


39,661


34,573


14.7








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$                      33,612


$                      33,546


0.2

Used vehicle retail


$                      20,460


$                      20,286


0.9








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$                        1,772


$                        1,893


(6.4)

Used vehicle retail sales


1,592


1,733


(8.1)

Used vehicle wholesale sales


243


214


13.6

Total used


1,158


1,235


(6.2)

Finance and insurance (per retail unit)


$                        1,294


$                        1,245


3.9

OTHER: (1)







SG&A expenses


$                    257,558


$                    226,687


13.6

SG&A as % revenues


11.4


11.5



SG&A as % gross profit


76.2


75.4



Operating margin %


3.1


3.3



Pretax margin %


2.2


2.4










INTEREST EXPENSE:







Floorplan interest


$                    (10,913)


$                      (9,364)


16.5

Floorplan assistance


9,817


8,173


20.1

 Net floorplan expense 


$                      (1,096)


$                      (1,191)


(8.0)

           Other interest expense, net


$                    (10,513)


$                      (9,242)


13.8



(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,



2014


2013


% Change

REVENUES:







New vehicle retail sales


$                1,114,243


$                1,069,157


4.2

Used vehicle retail sales


490,862


456,866


7.4

Used vehicle wholesale sales


79,910


72,001


11.0

Total used


570,772


528,867


7.9

Parts and service


241,273


226,938


6.3

Finance and insurance


78,266


67,849


15.4

Total


$                2,004,554


$                1,892,811


5.9








GROSS MARGIN %:







New vehicle retail sales


5.2


5.7



Used vehicle retail sales


7.7


8.5



Used vehicle wholesale sales


3.5


3.3



Total used


7.2


7.8



Parts and service


52.8


52.6



Finance and insurance


100.0


100.0



Total


15.2


15.3










GROSS PROFIT:







New vehicle retail sales


$                     58,362


$                     61,119


(4.5)

Used vehicle retail sales


38,000


39,006


(2.6)

Used vehicle wholesale sales


2,836


2,409


17.7

Total used


40,836


41,415


(1.4)

Parts and service


127,386


119,337


6.7

Finance and insurance


78,266


67,849


15.4

Total


$                   304,850


$                   289,720


5.2








UNITS SOLD:







Retail new vehicles sold


32,688


31,587


3.5

Retail used vehicles sold


23,588


22,456


5.0

Wholesale used vehicles sold


11,404


10,863


5.0

Total used


34,992


33,319


5.0








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$                     34,087


$                     33,848


0.7

Used vehicle retail


$                     20,810


$                     20,345


2.3








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$                       1,785


$                       1,935


(7.8)

Used vehicle retail sales


1,611


1,737


(7.3)

Used vehicle wholesale sales


249


222


12.2

Total used


1,167


1,243


(6.1)

Finance and insurance (per retail unit)


$                       1,391


$                       1,255


10.8

OTHER:(2)







SG&A expenses


$                   228,338


$                   216,809


5.3

SG&A as % revenues


11.4


11.5



SG&A as % gross profit


74.9


74.8



Operating margin %


3.4


3.4





(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)

















Three Months Ended March 31,



2014


2013


% Change

SG&A RECONCILIATION:














As reported

$           216,396


$           209,484


3.3


Pre-tax adjustments:







Catastrophic events

-


(808)




Gain on dealership disposition

-


574




Acquisition costs

-


(5,159)




Adjusted SG&A(1)

$           216,396


$           204,091


6.0








SG&A AS % REVENUES:














Unadjusted

11.8


12.2




Adjusted(1)

11.8


11.9










SG&A AS % GROSS PROFIT:














Unadjusted

74.7


76.8




Adjusted (1)

74.7


74.8










OPERATING MARGIN %














Unadjusted

3.5


3.2




Adjusted(1), (2)

3.5


3.6










PRETAX MARGIN %:














Unadjusted

2.5


2.2




Adjusted (1), (2)

2.5


2.6





(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 - U.K.

(Unaudited)

(Dollars in thousands)










Three Months Ended March 31,



2014


2013


% Change

SG&A RECONCILIATION:














As reported

$            22,472


$            16,036


40.1


Pre-tax adjustments:







Acquisition costs

-


(142)




Adjusted SG&A(1)

$            22,472


$            15,894


41.4








SG&A AS % REVENUES:














Unadjusted

9.1


9.4




Adjusted (1)

9.1


9.3










SG&A AS % GROSS PROFIT:














Unadjusted

78.2


83.7




Adjusted (1)

78.2


82.9










OPERATING MARGIN %














Unadjusted

2.2


1.5




Adjusted (1), (2)

2.2


1.6










PRETAX MARGIN %:














Unadjusted

1.9


1.2




Adjusted (1), (2)

1.9


1.3










(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 - Brazil

(Unaudited)

(Dollars in thousands)










Three Months Ended March 31,



2014


2013 (4)


% Change

SG&A RECONCILIATION:














As reported

$               18,690


$                 7,913


136.2


Pre-tax adjustments:







Acquisition costs

-


(1,211)


-


Adjusted SG&A(1)

$               18,690


$                 6,702


178.9








SG&A AS % REVENUES:














Unadjusted

10.5


11.2




Adjusted(1)

10.5


9.4










SG&A AS % GROSS PROFIT:














Unadjusted

95.1


94.5




Adjusted(1)

95.1


80.0










OPERATING MARGIN %














Unadjusted

0.2


0.3




Adjusted (1), (2)

0.2


2.0










PRETAX MARGIN %:














Unadjusted

(0.7)


(1.8)




Adjusted (1), (3)

(0.7)


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, net of $789, for the period from the date of acquisition (February 28, 2013) through March 31, 2013.



(4)

Results are for the period from the date of acquisition (February 28, 2013) through March 31, 2013.

 


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:

2014


2013


% Change









As reported

$             31,303


$             22,118


41.5


After-tax adjustments:







Catastrophic events(6)

-


504




Gain on dealership disposition (7)

-


(356)




Acquisition costs(5)

-


6,968




Adjusted net income (1)

$             31,303


$             29,234


7.1








ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED COMMON SHARES RECONCILIATION:














Adjusted net income

$             31,303


$             29,234


7.1


Less: Adjusted earnings allocated to participating securities

1,156


1,233


(6.2)


Adjusted net income available to diluted common shares

$             30,147


$             28,001


7.7








DILUTED INCOME PER COMMON SHARE RECONCILIATION:














As reported

$                 1.19


$                 0.88


35.2


After-tax adjustments:







Catastrophic events 

-


0.02




Gain on dealership disposition

-


(0.01)




Acquisition costs

-


0.27




Adjusted diluted income per share (1)

$                 1.19


$                 1.16


2.6








SG&A RECONCILIATION:














As reported

$           257,558


$           233,433


10.3


Pre-tax adjustments:







Catastrophic events 

-


(808)




Gain on dealership disposition

-


574




Acquisition costs

-


(6,512)




Adjusted SG&A (1)

$           257,558


$           226,687


13.6








SG&A AS % REVENUES:














Unadjusted

11.4


11.9




Adjusted(1)

11.4


11.5










SG&A AS % GROSS PROFIT:














Unadjusted

76.2


77.7




Adjusted(1)

76.2


75.4










OPERATING MARGIN %














Unadjusted

3.1


3.0




Adjusted (1), (2)

3.1


3.3










PRETAX MARGIN %:














Unadjusted

2.2


2.0




Adjusted (1), (3)

2.2


2.4










SAME STORE SG&A RECONCILIATION:







As reported

$           228,338


$           224,129


1.9


Pre-tax adjustments:







Catastrophic events

-


(808)




Acquisition costs

-


(6,512)




Adjusted Same Store SG&A (1)

$           228,338


$           216,809

















SAME STORE SG&A AS % REVENUES:







Unadjusted

11.4


11.8




Adjusted(1)

11.4


11.5










SAME STORE SG&A AS % GROSS PROFIT:














Unadjusted

74.9


77.4




Adjusted(1)

74.9


74.8










SAME STORE OPERATING MARGIN %:














Unadjusted

3.4


3.0




Adjusted (1), (4)

3.4


3.4










CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATION:







Net cash provided by operating activies

$           133,192


$             61,926


115.1


Change in floorplan notes payable-credit facilities, excluding floorplan offset account and net acquisition and disposition related activity

(43,981)


39,419




Change in floorplan notes payable-manufacturer affiliates associated with net acquisition and disposition related activity

(19,530)


(3,274)




Adjusted net cash provided by operating activities(1)

$             69,681


$             98,071


(28.9)



(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, net of $789, for the three months ended March 31, 2013.



(4)

Excludes the impact of Same Store SG&A reconciling items above.



(5)

Adjustment is net of tax benefit of $334 for the three months ended March 31, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.



(6)

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.



(7)

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.

 

 

 

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