Revenues Rise 4% to $3.2 Billion Income from Continuing Operations of $33.8 Million; 17% Increase Versus Adjusted Q1 '07 Earnings Per Share from Continuing Operations of $0.36; 16% Increase Versus Adjusted Q1 '07BLOOMFIELD HILLS, Mich., Apr 29, 2008 (BUSINESS WIRE) -- Penske Automotive Group, Inc. (NYSE: PAG), an international
automotive retailer, today reported that first quarter income from
continuing operations was $33.8 million, which represents a 17.4%
increase over adjusted income from continuing operations of $28.8
million in the prior year. Related earnings per share were $0.36 in
the first quarter, which compares to $0.31 per share in the prior
year. Net income in the first quarter was $33.9 million, or $0.36 per
share, compared with adjusted net income of $26.9 million, or $0.28
per share, in the prior year. Adjusted 2007 earnings exclude $12.3
million ($0.13 per share) of after-tax costs relating to the
redemption of the Company's 9.625% Senior Subordinated Notes in March
of 2007. In the first quarter of 2007, reported income from continuing
operations and reported net income were $16.5 million, or $0.18 per
share, and $14.6 million, or $0.15 per share, respectively.
Revenues in the first quarter increased 4.0% to $3.2 billion. On a
same-store basis, retail revenues declined 2.3%, due primarily to a
decline in new vehicle unit sales at the Company's U.S. dealerships.
"I'm pleased with the performance of our business in the first
quarter," said Penske Automotive Group Chairman Roger Penske. "While
the new vehicle sales environment was difficult, particularly in the
U.S., our business continued to perform well. In particular, I am
pleased that we were able to generate same-store retail revenue
increases in our used vehicle, finance & insurance, and service and
parts operations. Further, our overall gross margin increased to
15.4%, due primarily to the strength of our used vehicle and service
and parts performance." Penske continued, "I also remain excited about
our distribution of the smart fortwo in the U.S., and am optimistic
about its prospects and its potential to further diversify the
Company's overall business model."
During the first quarter, the Company did not effect any
repurchases under its previously announced share buyback authority.
The Company currently projects earnings from continuing operations in
the second quarter to be in the range of $0.45 to $0.47 per share, and
continues to project earnings from continuing operations for the year
in the range of $1.63 to $1.71 per share. Earnings per share
information in 2008 is based on an estimated average of 95.0 million
shares outstanding.
Penske Automotive will host a conference call discussing financial
results relating to the first quarter of 2008 on April 29, 2008, at
2:00 p.m. EDT. To listen to the conference call, participants must
dial (800) 230-1951 (International, please dial (612) 332-0530). The
call will be simultaneously broadcast over the Internet through the
Penske Automotive Group website at www.penskeautomotive.com.
About Penske Automotive
Penske Automotive Group, Inc., headquartered in Bloomfield Hills,
Michigan, operates 316 retail automotive franchises, representing more
than 40 different brands, and 27 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 19
states and Puerto Rico and 145 franchises located outside the United
States, primarily in the United Kingdom. Penske Automotive is a member
of the Fortune 500 and Russell 1000 and has approximately 16,000
employees. smart and fortwo are registered trademarks of Daimler AG.
Statements in this press release may involve forward-looking
statements, including forward-looking statements regarding Penske
Automotive Group, Inc.'s future sales and earnings potential. Actual
results may vary materially because of risks and uncertainties,
including external factors such as interest rate fluctuations, changes
in consumer spending and other factors over which management has no
control. 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, 2007, 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.
This release contains certain non-GAAP financial measures as
defined under SEC rules, such as adjusted income from continuing
operations and related earnings per share, which exclude certain items
disclosed in the release. The Company has reconciled these measures to
the most directly comparable GAAP measures in the release. The Company
believes that these non-GAAP financial measures improve the
transparency of the Company's disclosure and the period-to-period
comparability of the Company's results from operations.
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
First Quarter
-----------------------
2008 2007
----------- -----------
Revenues:
New Vehicle $1,635,602 $1,624,778
Used Vehicle 803,456 780,345
Finance and Insurance, Net 75,068 67,832
Service and Parts 363,385 347,954
Distribution 63,770 - -
Fleet and Wholesale Vehicle 263,189 259,106
----------- -----------
Total Revenues 3,204,470 3,080,015
Cost of Sales:
New Vehicle 1,497,644 1,488,202
Used Vehicle 735,849 719,240
Service and Parts 159,833 154,798
Distribution 53,618 - -
Fleet and Wholesale Vehicle 263,468 256,008
----------- -----------
Total Cost of Sales 2,710,412 2,618,248
----------- -----------
Gross Profit 494,058 461,767
SG&A Expenses 399,173 369,711
Depreciation and Amortization 13,501 12,340
----------- -----------
Operating Income 81,384 79,716
Floor Plan Interest Expense (17,312) (15,816)
Other Interest Expense (12,043) (18,823)
Equity in Earnings of Affiliates 1,392 (821)
Debt Redemption Charge - - (18,634)
----------- -----------
Income from Continuing Operations Before 53,421 25,622
Income Taxes and Minority Interests
Income Taxes (19,147) (8,796)
Minority Interests (435) (294)
----------- -----------
Income from Continuing Operations 33,839 16,532
Income (Loss) from Discontinued Operations, Net
of Tax 91 (1,950)
----------- -----------
Net Income $33,930 $14,582
=========== ===========
Income from Continuing Operations Per Diluted
Share $0.36 $0.18
=========== ===========
Diluted EPS $0.36 $0.15
=========== ===========
Diluted Weighted Average Shares Outstanding 94,657 94,412
=========== ===========
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)
3/31/08 12/31/07
---------- ----------
Assets
Cash and Cash Equivalents $20,394 $11,690
Accounts Receivable, Net 503,463 448,985
Inventories 1,818,846 1,682,736
Other Current Assets 89,092 65,948
Assets Held for Sale 110,307 96,638
---------- ----------
Total Current Assets 2,542,102 2,305,997
Property and Equipment, Net 650,360 617,874
Intangibles 1,661,243 1,659,788
Other Assets 87,466 84,894
---------- ----------
Total Assets $4,941,171 $4,668,553
========== ==========
Liabilities and Stockholders' Equity
Floor Plan Notes Payable $1,198,824 $1,070,882
Floor Plan Notes Payable - Non-Trade 502,620 476,854
Accounts Payable 291,725 266,726
Accrued Expenses 257,312 212,310
Current Portion Long-Term Debt 14,437 14,522
Liabilities Held for Sale 68,898 54,745
---------- ----------
Total Current Liabilities 2,333,816 2,096,039
Long-Term Debt 829,982 830,106
Other Long-Term Liabilities 328,893 320,949
---------- ----------
Total Liabilities 3,492,691 3,247,094
Stockholders' Equity 1,448,480 1,421,459
---------- ----------
Total Liabilities and Stockholders' Equity $4,941,171 $4,668,553
========== ==========
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data
Three Months
------------------------
2008 2007
------------ -----------
Total Retail Units
New Retail 45,550 45,105
Used Retail 26,911 25,550
------------ -----------
Total Retail 72,461 70,655
============ ===========
smart Wholesale Units 4,913 --
============ ===========
Same-Store Retail Units
New Same-Store Retail 41,668 44,659
Used Same-Store Retail 25,832 24,580
------------ -----------
Total Same-Store Retail 67,500 69,239
============ ===========
Same-Store Retail Revenue
New Vehicles $1,518,819 $1,607,937
Used Vehicles 768,434 751,735
Finance and Insurance, Net 71,151 67,452
Service and Parts 345,233 341,416
------------ -----------
Total Same-Store Retail $2,703,637 $2,768,540
============ ===========
Same-Store Retail Revenue Growth
New Vehicles (5.5%) 7.6%
Used Vehicles 2.2% 20.9%
Finance and Insurance, Net 5.5% 10.7%
Service and Parts 1.1% 10.4%
Revenue Mix
New Vehicles 51.1% 52.8%
Used Vehicles 25.1% 25.3%
Finance and Insurance, Net 2.3% 2.2%
Service and Parts 11.3% 11.3%
Distribution 2.0% --%
Fleet and Wholesale 8.2% 8.4%
Average Retail Selling Price
New Vehicles $35,908 $36,022
Used Vehicles 29,854 30,542
Gross Margin 15.4% 15.0%
Retail Gross Margin - by Product
New Vehicles 8.4% 8.4%
Used Vehicles 8.4% 7.8%
Service and Parts 56.0% 55.5%
Gross Profit per Retail Transaction
New Vehicles $3,029 $3,028
Used Vehicles 2,512 2,392
Finance and Insurance 1,036 960
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)
Three Months
-----------------
2008 2007
-------- --------
Brand Mix:
BMW 21% 22%
Toyota / Lexus 20% 19%
Honda / Acura 14% 14%
Mercedes Benz 10% 11%
Audi 8% 8%
Land Rover 5% 6%
Ferrari / Maserati 4% 2%
Porsche 3% 4%
General Motors 3% 3%
Other 12% 11%
-------- --------
100% 100%
Premium 65% 66%
Foreign 29% 28%
Domestic Big 3 6% 6%
-------- --------
100% 100%
Revenue Mix:
U.S. 60% 60%
International 40% 40%
-------- --------
100% 100%
Debt to Total Capital Ratio 37% 40%
Rent Expense $40,174 $36,235
SOURCE: Penske Automotive Group, Inc.
Penske Automotive Group, Inc.
Bob O'Shaughnessy, 248-648-2800
Chief Financial Officer
boshaughnessy@penskeautomotive.com
or
Tony Pordon, 248-648-2540
Senior Vice President
tpordon@penskeautomotive.com
