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8-K - LIVE FILING - PENSKE AUTOMOTIVE GROUP, INC. | htm_44250.htm |
FOR IMMEDIATE RELEASE
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PENSKE AUTOMOTIVE REPORTS FOURTH QUARTER AND FULL YEAR RESULTS
Completes Most Profitable Year in Company History
Fourth Quarter 2011 | Full Year 2011 |
| Revenue Increases 11% to $3.0 Billion |
| Revenue Increases 12% to $11.6 Billion |
Same-store Retail Revenue Increases 5.9% | |||||||
Same-store Retail Revenue Increases 8.2% | |||||||
Operating Income Increases 16% to $76.6 | |||||||
Operating Income Increases 15% to $298.2 | |||||||
mil | mil | ||||||
Income from Continuing Operations | |||||||
Income from Continuing Operations | |||||||
Increases 22% to $42.5 Million | Increases 42% to $175.1 Million | ||||||
EPS from Continuing Operations Increases | |||||||
EPS from Continuing Operations Increases | |||||||
24% to $0.47 per share | 43% to $1.92 per share | ||||||
EBITDA Increases 16% to $89.7 Million | |||||||
EBITDA Increases 17% to $344.0 Million | |||||||
BLOOMFIELD HILLS, MI, February 15, 2012 Penske Automotive Group, Inc. (NYSE:PAG), an | |||||||
international automotive retailer, announced today that fourth quarter 2011 income from continuing | |||||||
operations attributable to common shareholders increased 22% to $42.5 million and related earnings | |||||||
per share increased 24% to $0.47 per share. This compares to income from continuing operations | |||||||
attributable to common shareholders of $34.9 million, or $0.38 per share in the same period last | |||||||
year. |
Total revenue increased by 10.8%, to $3.0 billion, driven largely by an increase in total retail unit sales of 10.6%. The increase in retail unit sales was highlighted by a 20.0% increase in used retail unit sales, which drove the Companys used-to-new ratio to 0.82 to 1. Same-store retail revenue increased 5.9% in the fourth quarter. Total gross profit for the Company improved 9.3% to $455.8 million and operating income increased 16.1% to $76.6 million.
Highlights of the Fourth Quarter |
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| Total retail unit sales increased 10.6% to 71,453 |
| +14.1% in the United States; +2.6% Internationally |
| New unit retail sales +4.0% |
| Used unit retail sales +20.0% |
| Same-store retail revenue increased 5.9% |
| New +2.7%; Used +14.1%; Finance & Insurance +11.4%; Service and Parts +0.7% |
| +9.3% in the United States; (0.1%) Internationally |
| Average Transaction Price Per Unit |
| New $38,816, +4.4% |
| Used $26,034, (1.3%) |
| Average Gross Profit Per Unit |
| New $3,251, +2.8%; Gross Margin 8.4% |
| Used $1,852, (2.6%); Gross Margin 7.1% |
| Finance & Insurance $965, +3.8% |
| Inventory Days Supply |
| New 49 days; Used 52 days |
Chairman Roger Penske said, Our fourth quarter results continue to demonstrate the strength of the automotive retail model and the benefit from our premium/luxury brand mix in both the U.S. and international markets. We produced another outstanding quarter of profitability while generating same-store revenue increases in each area of our business. I am extremely pleased with the continued strong performance of our used vehicle business, which increased same-store retail unit sales by 16% and same-store retail revenue by 14%, and our service and parts operations gross margin which added 120 basis points to 57.3%.
For the year ended December 31, 2011, total revenue increased 11.9% to $11.6 billion. Income from continuing operations attributable to common shareholders was an all-time company record, increasing 41.7% to $175.1 million and related earnings per share increased 43.3% to $1.92. This compares to income from continuing operations attributable to common shareholders of $123.6 million, and related
earnings per share of $1.34 per share in the same period last year. During 2011, the Company recognized a net income tax benefit of $11.0 million, or $0.12 per share, reflecting a positive adjustment from the resolution of certain tax items in the U.K. of $17.0 million, or $0.19 per share, partially offset by a reduction in deferred tax assets of $6.0 million, or $0.07 per share. After adjusting for these items, adjusted income from continuing operations attributable to common shareholders was $164.0 million, or $1.80 per share, representing an increase of 34.3% on a per share basis compared to last year.
Penske added, The performance of our business in 2011 exceeded our expectations. We completed the most profitable year in the history of our Company, generating a same-store retail revenue increase of 8.2% and $344 million in EBITDA. Further, we continued to grow the business through opportunistic acquisitions of approximately $1 billion in estimated annualized revenue, which includes the January 2012 Agnew Group acquisition in the U.K. We also discontinued non-strategic dealerships during 2011 with annualized revenues of approximately $300 million. These acquisitions, coupled with the continued recovery in the retail automotive market, are expected to drive our business to higher levels in 2012.
Securities Repurchase Activity
For the year ended December 31, 2011, the Company acquired 2,449,768 shares of its common stock for an aggregate purchase price of $44.3 million, or an average price of $18.07 per share. The Company currently has remaining authorization from its Board of Directors to repurchase up to $106.8 million of its outstanding common stock, debt or convertible debt. Securities may be acquired from time to time either through open market purchases, negotiated transactions or other means.
Conference Call
Penske Automotive will host a conference call discussing financial results relating to the fourth quarter of 2011 on February 15, 2012, at 2:00 p.m. Eastern Standard Time. To listen to the conference call, participants must dial (800) 288-8974 [International, please dial (612) 332-0530]. The call will also be simultaneously broadcast over the Internet through the Investors Relations section of the Penske Automotive Group website at www.penskeautomotive.com.
About Penske Automotive
Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 332
retail automotive franchises, representing 42 different brands and 29 collision repair centers.
Penske Automotive, which sells new and previously owned vehicles, finance and insurance products
and replacement parts, and offers maintenance and repair services on all brands it represents, has
166 franchises in 17 states and Puerto Rico and 166 franchises located outside the United States,
primarily in the United Kingdom. Penske Automotive is a member of the Fortune 500 and
Russell 2000 and has approximately 16,000 employees.
Non-GAAP Financial Measures
This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations, adjusted income from continuing operations per share and earnings before interest, taxes, depreciation and amortization (EBITDA). The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these widely accepted measures of operating profitability improve the transparency of the Companys disclosures. These non-GAAP financial measures are not substitutes for GAAP financial results, and should only be considered in conjunction with the Companys financial information that is presented in accordance with GAAP.
Caution Concerning Forward Looking Statements
Statements in this press release involve forward-looking statements, including forward-looking
statements regarding Penske Automotive Group, Inc.s future sales potential and outlook. Actual
results may vary materially because of risks and uncertainties that are difficult to predict.
These risks and uncertainties include, among others: economic conditions generally, conditions in
the credit markets and changes in interest rates, adverse conditions affecting a particular
manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural
disasters such as the earthquake and tsunami that struck Japan in March 2011; changes in consumer
credit availability, the outcome of legal and administrative matters, and other factors over which
management has limited control. These forward-looking statements should be evaluated together with
additional information about Penske Automotives business, markets, conditions and other
uncertainties, which could affect Penske Automotives future performance. These risks and
uncertainties are addressed in Penske Automotives Form 10-K for the year ended December 31, 2010,
and its other filings with the Securities and Exchange Commission (SEC). This press release
speaks only as of its date, and Penske Automotive disclaims any duty to update the information
herein.
Find a vehicle: http://www.penskecars.com
Engage Penske Automotive:
Like Penske Automotive on Facebook: https://facebook.com/PenskeCars
Follow Penske Automotive on Twitter: https://twitter.com/#!/Penskecarscorp
Visit Penske Automotive on YouTube: http://www.youtube.com/penskecars
Inquiries should contact:
David K. Jones Executive Vice President and Chief Financial Officer Penske Automotive Group, Inc. 248-648-2800 dave.jones@penskeautomotive.com |
Anthony R. Pordon Executive Vice President Investor Relations and Corporate Development Penske Automotive Group, Inc. 248-648-2540 tpordon@penskeautomotive.com |
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PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||
Revenues: |
||||||||||||||||||||
New Vehicle |
$ | 1,524,309 | $ | 1,404,398 | $ | 5,811,084 | $ | 5,276,371 | ||||||||||||
Used Vehicle |
837,857 | 707,809 | 3,399,981 | 2,857,922 | ||||||||||||||||
Finance and Insurance, Net |
68,940 | 60,033 | 278,027 | 244,687 | ||||||||||||||||
Service and Parts |
349,214 | 331,452 | 1,394,990 | 1,301,811 | ||||||||||||||||
Fleet and Wholesale Vehicle |
178,797 | 166,612 | 672,150 | 647,594 | ||||||||||||||||
Total Revenues |
2,959,117 | 2,670,304 | 11,556,232 | $ | 10,328,385 | |||||||||||||||
Cost of Sales: |
||||||||||||||||||||
New Vehicle |
1,396,639 | 1,285,004 | 5,328,053 | 4,841,556 | ||||||||||||||||
Used Vehicle |
778,262 | 656,803 | 3,136,474 | 2,637,356 | ||||||||||||||||
Service and Parts |
149,153 | 145,591 | 599,651 | 564,494 | ||||||||||||||||
Fleet and Wholesale Vehicle |
179,243 | 165,978 | 666,664 | 640,864 | ||||||||||||||||
Total Cost of Sales |
2,503,297 | 2,253,376 | 9,730,842 | $ | 8,684,270 | |||||||||||||||
Gross Profit |
455,820 | 416,928 | 1,825,390 | 1,644,115 | ||||||||||||||||
SG&A Expenses |
366,676 | 339,587 | 1,478,297 | 1,339,125 | ||||||||||||||||
Depreciation |
12,588 | 11,379 | 48,903 | 46,253 | ||||||||||||||||
Operating Income |
76,556 | 65,962 | 298,190 | 258,737 | ||||||||||||||||
Floor Plan Interest Expense |
(7,398 | ) | (8,832 | ) | (28,515 | ) | (33,779 | ) | ||||||||||||
Other Interest Expense |
(11,833 | ) | (11,751 | ) | (45,020 | ) | (49,176 | ) | ||||||||||||
Debt Discount Amortization |
| (1,647 | ) | (1,718 | ) | (8,637 | ) | |||||||||||||
Equity in Earnings of Affiliates |
7,924 | 8,844 | 25,451 | 20,569 | ||||||||||||||||
Other Income |
| | | 1,634 | ||||||||||||||||
Income from Continuing Operations Before Income Taxes |
65,249 | 52,576 | 248,388 | 189,348 | ||||||||||||||||
Income Taxes |
(22,287 | ) | (17,131 | ) | ( | (71,933 | ) | (64,732 | ) | |||||||||||
Income from Continuing Operations |
42,962 | 35,445 | 176,455 | 124,616 | ||||||||||||||||
Income (Loss) from Discontinued Operations, Net of Tax |
5,195 | (6,374 | ) | 1,803 | (15,269 | ) | ||||||||||||||
Net Income |
48,157 | 29,071 | 178,258 | 109,347 | ||||||||||||||||
Income Attributable to Non-Controlling Interests |
(470 | ) | (562 | ) | (1,377 | ) | (1,066 | ) | ||||||||||||
Net Income Attributable to Common Shareholders |
$ | 47,687 | $ | 28,509 | $ | 176,881 | $ | 108,281 | ||||||||||||
Income from Continuing Operations Per Share |
$ | 0.47 | $ | 0.38 | $ | 1.92 | $ | 1.34 | ||||||||||||
Income Per Share |
$ | 0.53 | $ | 0.31 | $ | 1.94 | $ | 1.18 | ||||||||||||
Weighted Average Shares Outstanding |
90,553 | 92,214 | 91,274 | 92,091 | ||||||||||||||||
Amounts Attributable to Common Shareholders: |
||||||||||||||||||||
Reported Income from Continuing Operations |
$ | 42,962 | $ | 35,445 | $ | 176,455 | $ | 124,616 | ||||||||||||
Income Attributable to Non-Controlling Interests |
(470 | ) | (562 | ) | (1,377 | ) | (1,066 | ) | ||||||||||||
Income from Continuing Operations, net of tax |
$ | 42,492 | $ | 34,883 | $ | 175,078 | $ | 123,550 | ||||||||||||
Income (Loss) from Discontinued Operations, net of tax |
5,195 | (6,374 | ) | 1,803 | (15,269 | ) | ||||||||||||||
Net Income |
$ | 47,687 | $ | 28,509 | $ | 176,881 | $ | 108,281 | ||||||||||||
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)
December 31, | December 31, | |||||||
2011 | 2010 | |||||||
Assets |
||||||||
Cash and Cash Equivalents |
$ | 29,116 | $ | 19,688 | ||||
Accounts Receivable, Net |
444,673 | 382,382 | ||||||
Inventories |
1,605,280 | 1,443,284 | ||||||
Other Current Assets |
80,307 | 68,225 | ||||||
Assets Held for Sale |
33,224 | 133,019 | ||||||
Total Current Assets |
2,192,600 | 2,046,598 | ||||||
Property and Equipment, Net |
858,975 | 716,427 | ||||||
Intangibles |
1,138,586 | 1,003,729 | ||||||
Other Long-Term Assets |
312,138 | 303,078 | ||||||
Total Assets |
$ | 4,502,299 | $ | 4,069,832 | ||||
Liabilities and Equity |
||||||||
Floor Plan Notes Payable |
$ | 988,650 | $ | 911,548 | ||||
Floor Plan Notes Payable Non-Trade |
713,635 | 497,074 | ||||||
Accounts Payable |
223,313 | 251,960 | ||||||
Accrued Expenses |
202,761 | 201,714 | ||||||
Current Portion Long-Term Debt |
3,414 | 10,593 | ||||||
Liabilities Held for Sale |
17,899 | 88,117 | ||||||
Total Current Liabilities |
2,149,672 | 1,961,006 | ||||||
Long-Term Debt |
846,777 | 769,285 | ||||||
Other Long-Term Liabilities |
365,437 | 293,688 | ||||||
Total Liabilities |
3,361,886 | 3,023,979 | ||||||
Equity |
1,140,413 | 1,045,853 | ||||||
Total Liabilities and Equity |
$ | 4,502,299 | $ | 4,069,832 | ||||
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data
(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
December 31, | % | December 31, | % | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Total Retail Units: |
||||||||||||||||||||||||
New Retail |
39,270 | 37,758 | 4.0 | % | 154,829 | 150,164 | 3.1 | % | ||||||||||||||||
Used Retail |
32,183 | 26,822 | 20.0 | % | 129,652 | 110,083 | 17.8 | % | ||||||||||||||||
Total Retail |
71,453 | 64,580 | 10.6 | % | 284,481 | 260,247 | 9.3 | % | ||||||||||||||||
Fleet |
1,462 | 1,603 | -8.8 | % | 5,308 | 6,103 | -13.0 | % | ||||||||||||||||
Wholesale |
14,523 | 14,686 | -1.1 | % | 58,593 | 60,254 | -2.8 | % | ||||||||||||||||
Total |
87,438 | 80,869 | 8.1 | % | 348,382 | 326,604 | 6.7 | % | ||||||||||||||||
Same-Store Retail Units: |
||||||||||||||||||||||||
New Same-Store Retail |
37,545 | 37,578 | -0.1 | % | 146,004 | 146,419 | -0.3 | % | ||||||||||||||||
Used Same-Store Retail |
31,006 | 26,738 | 16.0 | % | 122,515 | 107,500 | 14.0 | % | ||||||||||||||||
Total Same-Store Retail |
68,551 | 64,316 | 6.6 | % | 268,519 | 253,919 | 5.7 | % | ||||||||||||||||
Same-Store Retail Revenue: (Amounts in thousands) |
||||||||||||||||||||||||
New Vehicles |
$ | 1,435,999 | $ | 1,397,966 | 2.7 | % | $ | 5,429,084 | $ | 5,143,261 | 5.6 | % | ||||||||||||
Used Vehicles |
804,823 | 705,593 | 14.1 | % | 3,219,762 | 2,800,631 | 15.0 | % | ||||||||||||||||
Finance and Insurance, Net |
66,544 | 59,746 | 11.4 | % | 266,477 | 240,375 | 10.9 | % | ||||||||||||||||
Service and Parts |
332,898 | 330,550 | 0.7 | % | 1,315,134 | 1,274,234 | 3.2 | % | ||||||||||||||||
Total Same-Store Retail |
$ | 2,640,264 | $ | 2,493,855 | 5.9 | % | $ | 10,230,457 | $ | 9,458,501 | 8.2 | % | ||||||||||||
Revenue Mix: |
||||||||||||||||||||||||
New Vehicles |
51.5 | % | 52.6 | % | 50.3 | % | 51.1 | % | ||||||||||||||||
Used Vehicles |
28.3 | % | 26.5 | % | 29.4 | % | 27.7 | % | ||||||||||||||||
Finance and Insurance, Net |
2.4 | % | 2.2 | % | 2.4 | % | 2.4 | % | ||||||||||||||||
Service and Parts |
11.8 | % | 12.4 | % | 12.1 | % | 12.5 | % | ||||||||||||||||
Fleet and Wholesale |
6.0 | % | 6.3 | % | 5.8 | % | 6.3 | % | ||||||||||||||||
Average Revenue per Vehicle Retailed: |
||||||||||||||||||||||||
New Vehicles |
$ | 38,816 | $ | 37,195 | 4.4 | % | $ | 37,532 | $ | 35,137 | 6.8 | % | ||||||||||||
Used Vehicles |
26,034 | 26,389 | -1.3 | % | 26,224 | 25,962 | 1.0 | % | ||||||||||||||||
Gross Profit per Vehicle Retailed: |
||||||||||||||||||||||||
New Vehicles |
$ | 3,251 | $ | 3,162 | 2.8 | % | $ | 3,120 | $ | 2,896 | 7.7 | % | ||||||||||||
Used Vehicles |
1,852 | 1,902 | -2.6 | % | 2.032 | 2,003 | 1.4 | % | ||||||||||||||||
Finance and Insurance |
965 | 930 | 3.8 | % | 977 | 940 | 3.9 | % | ||||||||||||||||
Operating items as a percentage of
revenue: |
||||||||||||||||||||||||
New Vehicle Gross Profit |
8.4 | % | 8.5 | % | 8.3 | % | 8.2 | % | ||||||||||||||||
Used Vehicle Gross Profit |
7.1 | % | 7.2 | % | 7.7 | % | 7.7 | % | ||||||||||||||||
Service and Parts Gross Profit |
57.3 | % | 56.1 | % | 57.0 | % | 56.6 | % | ||||||||||||||||
Total Gross Profit |
15.4 | % | 15.6 | % | 15.8 | % | 15.9 | % | ||||||||||||||||
Selling, General and Admin. Expenses |
12.4 | % | 12.7 | % | 12.8 | % | 13.0 | % | ||||||||||||||||
Operating Income |
2.6 | % | 2.5 | % | 2.6 | % | 2.5 | % | ||||||||||||||||
Inc. From Cont. Ops. Before Inc. Taxes |
2.2 | % | 2.0 | % | 2.1 | % | 1.8 | % | ||||||||||||||||
Operating items as a percentage of total gross profit: |
||||||||||||||||||||||||
Selling, General and Administrative
Expenses |
80.4 | % | 81.4 | % | 81.0 | % | 81.4 | % | ||||||||||||||||
Operating Income |
16.8 | % | 15.8 | % | 16.3 | % | 15.7 | % |
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)
(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Brand Revenue Mix: |
||||||||||||||||
Premium: |
||||||||||||||||
BMW |
25 | % | 24 | % | 25 | % | 22 | % | ||||||||
Audi |
11 | % | 10 | % | 12 | % | 11 | % | ||||||||
Mercedes-Benz |
12 | % | 10 | % | 10 | % | 10 | % | ||||||||
Lexus |
4 | % | 5 | % | 4 | % | 5 | % | ||||||||
Land Rover |
5 | % | 4 | % | 4 | % | 4 | % | ||||||||
Porsche |
4 | % | 5 | % | 5 | % | 4 | % | ||||||||
Ferrari / Maserati |
3 | % | 3 | % | 3 | % | 3 | % | ||||||||
Acura |
2 | % | 2 | % | 2 | % | 2 | % | ||||||||
Other |
4 | % | 5 | % | 4 | % | 5 | % | ||||||||
Total Premium |
70 | % | 68 | % | 69 | % | 66 | % | ||||||||
Foreign: |
||||||||||||||||
Toyota |
10 | % | 11 | % | 11 | % | 12 | % | ||||||||
Honda |
11 | % | 12 | % | 11 | % | 12 | % | ||||||||
Nissan |
2 | % | 2 | % | 2 | % | 2 | % | ||||||||
Volkswagen |
2 | % | 1 | % | 2 | % | 1 | % | ||||||||
Other |
1 | % | 1 | % | 1 | % | 2 | % | ||||||||
Total Foreign |
26 | % | 27 | % | 27 | % | 29 | % | ||||||||
Domestic Big 3 |
||||||||||||||||
General Motors / Chrysler / Ford |
4 | % | 5 | % | 4 | % | 5 | % | ||||||||
Revenue Mix: |
||||||||||||||||
U.S. |
67 | % | 64 | % | 63 | % | 63 | % | ||||||||
International |
33 | % | 36 | % | 37 | % | 37 | % | ||||||||
Other (Amounts in Thousands): |
||||||||||||||||
EBITDA * |
$ | 89,670 | $ | 77,353 | $ | 344,029 | $ | 293,414 | ||||||||
Rent Expense |
43,207 | 42,925 | 171,328 | 163,234 | ||||||||||||
Floorplan Credits |
5,517 | 5,118 | 21,029 | 20,084 |
* See the following Non-GAAP reconciliation tables |
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)
(Unaudited)
Reconciliation of 2011 and 2010 net income to EBITDA:
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(Amounts in Thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Net Income |
$ | 48,157 | $ | 29,071 | $ | 178,258 | $ | 109,347 | ||||||||
Depreciation |
12,588 | 11,379 | 48,903 | 46,253 | ||||||||||||
Other Interest Expense |
11,833 | 11,751 | 45,020 | 49,176 | ||||||||||||
Debt Discount Amortization |
| 1,647 | 1,718 | 8,637 | ||||||||||||
Income Taxes |
22,287 | 17,131 | 71,933 | 64,732 | ||||||||||||
(Income)/Loss from Discontinued Operations, net |
(5,195 | ) | 6,374 | (1,803 | ) | 15,269 | ||||||||||
EBITDA |
$ | 89,670 | $ | 77,353 | $ | 344,029 | $ | 293,414 | ||||||||
Reconciliation of twelve months ended December 31, 2011, income from continuing operations attributable to common shareholders and related earnings per share to adjusted income from continuing operations attributable to common shareholders and related earnings per share:
Twelve Months Ended | ||||||||
December 31, 2011 | ||||||||
(Amounts in Thousands, |
||||||||
Except per
Share Amounts) |
Income | EPS | ||||||
Income From Continuing
Operations
Attributable to
Common Shareholders |
$ | 175,078 | $ | 1.92 | ||||
Net Tax Benefit |
(11,046 | ) | (0.12 | ) | ||||
Adjusted Income From
Continuing Operations
Attributable to Common
Shareholders |
$ | 164,032 | $ | 1.80 | ||||
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