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|Penske Automotive Reports Second Quarter Results|
Same-Store Retail Revenue Growth of 16% in U.S. and 9% Internationally
Income From Continuing Operations Increases 47% to $29.2 Million and Related Earnings Per Share Increases 45% to $0.32
Repurchased Additional $84.6 Million of Convertible Notes $150.6 Million Currently Outstanding
U.S. Credit Facility Capacity Increased by $50 Million
BLOOMFIELD HILLS, Mich., Jul 29, 2010 (BUSINESS WIRE) --
Penske Automotive Group, Inc. (NYSE: PAG), an international automotive retailer, today reported second quarter income from continuing operations attributable to common shareholders of $29.2 million, or $0.32 per share. This compares to income from continuing operations attributable to common shareholders of $19.8 million, or $0.22 per share, in the second quarter last year.
Total revenue in the second quarter increased 16.6% to $2.7 billion. The revenue growth was driven by a 16.2% increase in new and used retail unit sales. Total new retail unit sales increased 19.6%, including increases of 20.5% and 17.2% in our U.S. and International operations, respectively, resulting in a 24.4% increase in total new retail revenue. Used retail unit sales increased 12.0%, including increases of 17.1% and 4.2% in our U.S. and International operations, respectively, resulting in a 13.8% increase in total used retail revenue.
Total same-store retail revenue increased 13.3% during the quarter, including growth of 15.8% and 9.0% in our U.S. and International operations, respectively. Excluding changes in exchange rates, total same-store retail revenue increased 15.0%.
Penske Automotive Group Chairman Roger Penske said, "The improving retail environment and our premium/luxury brand mix helped drive double-digit growth in units, revenue, income from continuing operations and earnings per share in the second quarter. Our new vehicle unit sales outperformed industry sales in both the U.S. and the U.K., and we maintained a greater than one to one ratio of used unit to new unit sales in our international markets. Along with our strong operating performance, we have further reduced our leverage, resulting in a decrease in our long-term debt to capital ratio from 50% at the beginning of this year to 47% as of June 30."
Total revenues for the six months ended June 30, 2010, increased 15.9% to $5.2 billion. Income from continuing operations attributable to common shareholders for the six months ended June 30, 2010 and 2009, amounted to $49.9 million, or $0.54 per share, and $36.2 million, or $0.40 per share, respectively. Income from continuing operations for the six months ended June 30, 2010 and 2009, include after-tax gains of $0.7 million, or $0.01 per share, and $6.5 million, or $0.07 per share, respectively, relating to purchases of the Company's 3.5% Senior Subordinated Convertible Notes due 2026. Net income attributable to common shareholders in the six months ended June 30, 2010, was $49.8 million, or $0.54 per share.
During the second quarter, smart USA wholesaled 2,040 units, which compares to 956 units in the first quarter of this year. Recent sales activity and proactive management of current model year inventory purchases has resulted in inventory levels more closely aligned with current market conditions. Based on the increase in sales in the second quarter, coupled with expense reduction efforts, the loss in the distribution segment improved to $0.02 per share in the second quarter compared to $0.04 in the first quarter.
Securities Repurchase Activity
In the second and third quarters, the Company repurchased $84.6 million principal amount of its 3.5% Senior Subordinated Convertible Notes due 2026 (the "Notes"), leaving $150.6 million principal amount of the securities outstanding today. The Company also repurchased 68,340 shares of its common stock at an average price of $10.97 per share in July, and currently has approximately 92.1 million shares outstanding.
The Board of Directors of the Company has increased the Company's authority to repurchase its outstanding common stock, debt and convertible debt, depending on market conditions, price and other factors to $150 million. Securities may be acquired from time to time either through open market purchases, negotiated transactions or other means.
U.S. Credit Facility
The Company's U.S. credit facility has been amended to increase the revolving credit line by $50 million to $300 million. Including this increase, the Company currently has approximately $250 million of revolving credit available under the U.S. credit facility, all of which is currently available to repurchase or redeem the remaining $150.6 million of outstanding Notes.
Penske Automotive will host a conference call discussing financial results relating to the second quarter of 2010 on July 29, 2010, at 2:00 p.m.Eastern Daylight Time. To listen to the conference call, participants must dial (800) 230-1074 [International, please dial (612) 234-9959]. The call will also be simultaneously broadcast over the Internet through the Penske Automotive Group website at http://www.penskeautomotive.com.
About Penske Automotive
Penske Automotive Group, Inc. (http://www.penskeautomotive.com), headquartered in Bloomfield Hills, Michigan, operates 323 retail automotive franchises, representing 40 different brands and 25 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 171 franchises in 17 states and Puerto Rico and 152 franchises located outside the United States, primarily in the United Kingdom.
Penske Automotive, through its wholly-owned subsidiary smart USA Distributor LLC (http://www.smartusa.com), is the exclusive distributor of the smart fortwo vehicle and related parts in the United States. smart USA supports more than 75 smart retail centers in the United States.
Penske Automotive is a member of the Fortune 500 and Russell 1000 and has approximately 14,100 employees. smart and fortwo are registered trademarks of Daimler AG.
Caution Concerning Forward Looking Statements
Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s expected ability to access amounts under its U.S. revolving credit facility. Actual results may vary materially because of risks and uncertainties, including external factors such as consumer credit conditions, adverse conditions affecting a particular manufacturer, macro-economic factors, interest rate fluctuations, changes in consumer spending, and other factors over which management has no control. Availability of revolving credit under the Company's U.S. credit facility is predicated on continued covenant compliance and other factors. These forward-looking statements should be evaluated together with additional information about Penske Automotive's business, markets, conditions and other uncertainties which could affect Penske Automotive's future performance. These risks and uncertainties are addressed in Penske Automotive's Form 10-K for the year ended December 31, 2009, 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.
SOURCE: Penske Automotive Group, Inc.