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|Penske Automotive Reports Third Quarter Results|
Same-Store Retail Revenue Increases 4.2% in U.S. and 3.1% Internationally
Income From Continuing Operations of $31.0 Million, or $0.34 Per Share
BLOOMFIELD HILLS, Mich., Oct 22, 2010 (BUSINESS WIRE) -- Penske Automotive Group, Inc. (NYSE: PAG), an international automotive retailer, today reported third quarter income from continuing operations attributable to common shareholders of $31.0 million, or $0.34 per share. This compares to income from continuing operations attributable to common shareholders of $27.7 million, or $0.30 per share, in the third quarter last year. Third quarter 2009 income from continuing operations attributable to common shareholders included net expenses of $3.4 million, or $0.04 per share, relating to unusual items as shown in the reconciliation included in the attached selected data tables.
Total revenue in the third quarter increased 6.5% to $2.8 billion. The revenue increase was driven by a 4.7% increase in total retail unit sales. Total used units retailed increased 16.5%, including an increase in the U.S. of 20.6%. Total new units retailed declined 2.6% due to the impact of the highly successful government incentive programs in the U.S., U.K. and Germany last year. Total same-store retail revenue increased 3.8% during the quarter, including growth of 4.2% and 3.1% in our U.S. and International operations, respectively. Excluding changes in exchange rates, total same-store retail revenue increased 6.0%.
Penske Automotive Group Chairman Roger Penske said, "The new vehicle retail environment was challenging during the third quarter, however, our performance at our premium/luxury franchises and our focus on increasing used vehicle sales drove our same-store retail revenue growth." Penske continued, "We remain committed to growing our business. In 2010, we have acquired or been awarded new franchises that we expect will generate approximately $350 million of revenue on an annualized basis. We will continue to pursue opportunities to generate incremental revenue, while maintaining the financial discipline that has allowed us to pay down more than $210 million of long-term debt since the beginning of 2009."
Total revenues for the nine months ended September 30, 2010 increased 12.5% to $7.9 billion. Income from continuing operations attributable to common shareholders in the nine months ended September 30, 2010 amounted to $80.9 million, or $0.88 per share. This compares to income from continuing operations attributable to common shareholders of $63.9 million, or $0.70 per share, in the nine months ended September 30, 2009. Income from continuing operations attributable to common shareholders for the nine months ended September 30, 2010 includes after-tax gains of $1.1 million, or $0.01 per share, relating to purchases of the Company's 3.5% Senior Subordinated Convertible Notes due 2026. Income from continuing operations attributable to common shareholders for the nine months ended September 30, 2009 includes a net after-tax gain of $3.1 million, or $0.04 per share, relating to unusual items as shown in the reconciliation included in the attached selected data tables.
As previously announced, smart USA expects to incur approximately $25 million of development, engineering and tooling costs relating to a new five-door vehicle based upon Nissan's global architecture to be distributed through the smart USA dealer network. smart USA currently expects that approximately $17 million of the costs incurred relating to the new vehicle will be expensed prior to the projected launch of the vehicle in the fourth quarter of 2011.
During the third quarter, smart USA wholesaled 1,165 units. In October, smart USA introduced finance and marketing campaigns designed to sell through the balance of the 2010 model year inventory, resulting in $0.9 million, or $0.01 per share, of after-tax expense in the third quarter. In addition, smart USA recognized $1.1 million, or $0.01 per share, of after-tax expense in the third quarter relating to the new vehicle.
The Company's U.S. credit facility was extended in September by one year to September 2013. As of September 30, 2010, the Company had approximately $262 million and $60 million of revolving credit available under its U.S. and U.K. credit facilities, respectively. Penske Automotive CFO Bob O'Shaughnessy said, "Together with cash flow from operations and working capital, we believe our credit facilities will provide liquidity to fund our growth objectives and repurchase or redeem outstanding securities, including the $150.6 million principal amount of convertible notes expected to be redeemed in April 2011."
Securities Repurchase Activity
The Company currently has authorization to repurchase up to $150 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.
Penske Automotive will host a conference call discussing financial results relating to the third quarter of 2010 on October 22, 2010, at 2:00 p.m.Eastern Daylight Time. To listen to the conference call, participants must dial (800) 230-1093 [International, please dial (612) 332-0228]. 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 324 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 173 franchises in 17 states and Puerto Rico and 151 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 14,500 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.