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Press Release

Penske Automotive Reports Record First Quarter Results
Acquisitions and Strong U.K. Performance Produce Record Results
Earnings Per Share From Continuing Operations Increases 7.8% to $0.97

BLOOMFIELD HILLS, Mich., April 26, 2017 /PRNewswire/ --  

First Quarter 2017 Highlights

-- Revenue Increases 5.3% to $5.1 Billion; Excluding Foreign Exchange +11.3%

-- Same-Store Retail Revenue Decreases 2.2%; Excluding Foreign Exchange +3.7%

-- Income from Continuing Operations Attributable to Common Shareholders Increases 4.9% to $83.2 Million; Excluding Foreign Exchange +14.4% to $90.7 Million

-- Earnings Per Share from Continuing Operations Attributable to Common Shareholders Increases 7.8% to $0.97;  Excluding Foreign Exchange +17.8% to $1.06

 

Penske Automotive Group, Inc. (NYSE: PAG), an international transportation services company, today announced record first quarter results, including record revenue, income from continuing operations and earnings per share. For the three months ended March 31, 2017, income from continuing operations attributable to common shareholders increased 4.9% to $83.2 million, and related earnings per share increased 7.8% to $0.97, when compared to the same period last year.  Foreign exchange negatively impacted income from continuing operations attributable to common shareholders by $7.5 million, and earnings per share attributable to common shareholders by $0.09. Excluding the foreign exchange impact, income from continuing operations attributable to common shareholders would have increased 14.4% to $90.7 million and earnings per share would have increased 17.8% to $1.06.  

For the three months ended March 31, 2017, total automotive units retailed increased 11.6%, driven by strength in the company's U.K. operations and acquisitions.  Total same-store units retailed declined 0.4%.  Total revenue increased 5.3% to $5.1 billion, and same-store retail revenue declined 2.2%. Foreign exchange rates negatively impacted revenues by approximately $287.6 million.  Excluding the foreign exchange impact, total revenue would have increased 11.3% to $5.4 billion and same-store retail revenue would have increased 3.7%.  

Commenting on the company's results, Penske Automotive Group Chairman Roger S. Penske said, "Our diversified transportation services business delivered another outstanding quarter of record results despite foreign currency headwinds.  I am pleased to see increases in average gross profit per transaction for new vehicles, used vehicles and finance and insurance when excluding the impact from foreign exchange, coupled with another strong quarter of record results by our U.K. business.  As we look to the future our recent acquisitions combined with the continued performance of our existing business provide a solid foundation for growth and profitability."

Automotive Retail Highlights - Note: f/x = foreign exchange

  • Retail Unit Sales +11.6% to 124,472
    • New unit retail sales +5.8%
    • Used unit retail sales +18.1%
  • Same-Store Retail Unit Sales  -0.4% to 110,577
    • New unit retail sales  +0.6%
    • Used unit retail sales -1.5%
  • Same-Store Retail Revenue -2.2%; excluding f/x +3.7%
    • New -2.9%; Used -2.7%; Finance & Insurance +4.9%; Service and Parts +0.9%
      • Excluding f/x: New +2.8%; Used +4.1%; Finance & Insurance +11.2%; Service and Parts +4.9%
  • Average Gross Profit Per Unit
    • New $2,848, -$140/unit;  Gross Margin 7.7%, flat
      • Excluding f/x $3,025, +$37/unit
    • Used $1,512, -$86/unit; Gross Margin 6.1%, +10 basis points
      • Excluding f/x $1,606, +$8/uni
    • Finance & Insurance $1,104, +$42/unit
      • Excluding f/x $1,174, +$112/unit

Automotive retail results include the company's recently acquired used vehicle superstores, which are located in the U.S. and in the U.K.  During the first quarter of 2017, these used vehicle dealerships retailed 8,200 units, generating $143.1 million in revenue and $24.6 million in gross profit.  The average transaction price was $14,372, generating a gross profit per unit of $1,382.  Finance and insurance gross profit per unit was $1,147

Retail Commercial Truck Operations

The company operates twenty locations in the U.S. and Canada under the "Premier Truck Group" brand name, offering primarily the Freightliner and Western Star brands. For the three months ended March 31, 2017, Premier Truck Group retailed 1,507 units, generated $211.7 million of revenue, and $36.4 million of gross profit, principally through the retail sale of new/used medium-and heavy-duty trucks and service/parts sales. For the three months ended March 31, 2017, gross profit per used truck retailed improved to $2,589 from a loss of $1,471 per unit in the same period last year, as used truck prices stabilized.  Service and parts gross profit represented approximately 79% of Premier Truck Group's gross profit for the three months ended March 31, 2017. 

Penske Truck Leasing

Penske Truck Leasing Co., L.P. ("PTL") is a leading provider of full-service truck leasing, truck rental, contract maintenance and logistics services.  For the three months ended March 31, 2017, we recorded $11.9 million as part of equity in earnings of affiliates compared to $3.5 million for the three months ended March 31, 2016.  The company acquired an additional 14.4% ownership interest in PTL in July 2016, increasing our ownership to 23.4%.  Accordingly, the company accounts for its ownership interest in PTL using the equity method of accounting. 

Acquisitions

During the three months ended March 31, 2017, the company completed acquisitions representing approximately $900 million in estimated annualized revenue.  These acquisitions include a Jaguar and Land Rover dealership in Paramus, New Jersey, U.S.-based CarSense and U.K.-based CarShop, both of which are stand-alone specialty retailers of used vehicles.

In April 2017, the company announced that it had acquired Schumacher European, LTD., an 88,000 square foot Mercedes-Benz and Sprinter dealership with 67 service bays located in Phoenix, Arizona.  Schumacher European is expected to add approximately $250 million in estimated annualized revenue.  The Schumacher dealership is located contiguous to the company's Scottsdale 101 Auto Collection which includes 15 franchises, over 220 service bays and generates over $800 million in annual revenues.    

Conference Call

Penske Automotive will host a conference call discussing financial results relating to the first quarter of 2017 on Wednesday, April 26, 2017, at 2:00 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial (800) 700-7860 - [International, please dial (612) 332-0720]. The call will also be simultaneously broadcast over the Internet through the Investor Relations section of the Penske Automotive Group website. Additionally, an investor presentation relating to the first quarter 2017 financial results has been posted to the company's website. To access the presentation or to listen to the company's webcast, please refer to www.penskeautomotive.com.

About Penske Automotive

Penske Automotive Group, Inc., (NYSE:PAG) headquartered in Bloomfield Hills, Michigan, is an international transportation services company that operates automotive and commercial truck dealerships principally in the United States, Canada, and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. PAG employs more than 25,000 people worldwide and is a member of the Fortune 500 and Russell 2000. For additional information, visit the company's website at www.penskeautomotive.com.

Non-GAAP Financial Measures

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, 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 company's disclosures and provide a meaningful presentation of the company's results from its core business operations excluding the impact of items not related to the company's ongoing core business operations, and improve the period-to-period comparability of the company's results from its core business operations. These non-GAAP financial measures are not substitutes for GAAP financial results, and should only be considered in conjunction with the company's financial information that is presented in accordance with GAAP.

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 future sales potential.  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 and foreign currency exchange rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters, recall or other disruptions that interrupt the supply of vehicles or parts to us, 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 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, 2016, and its other filings with the Securities and Exchange Commission ("SEC"). This press release speaks only as of its date, and Penske Automotive Group disclaims any duty to update the information herein.

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Inquiries should contact:

J.D. Carlson
Executive Vice President and

Chief Financial Officer

Penske Automotive Group, Inc.
248-648-2810
jcarlson@penskeautomotive.com

Anthony R. Pordon
Executive Vice President Investor Relations and Corporate Development

Penske Automotive Group, Inc.
248-648-2540

tpordon@penskeautomotive.com

 

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Statements of Income

(Amounts In Millions, Except Per Share Data)

(Unaudited)


Three Months Ended


March 31,


2017


2016


Increase/

(Decrease)

Revenue

$   5,081.1


$   4,824.6


5.3%

Cost of Sales

4,306.8


4,100.8


5.0%

Gross Profit

$      774.3


$      723.8


 

7.0%

SG&A Expenses

601.7


558.9


 

7.7%

Depreciation

22.4


20.8


 

7.7%

    Operating Income

$      150.2


$      144.1


 

4.2%

Floor Plan Interest Expense

(13.7)


(12.8)


 

7.0%

Other Interest Expense

(25.0)


(17.2)


 

45.3%

Equity in Earnings of Affiliates

13.2


5.5


 

140.0%

    Income from Continuing Operations Before Income Taxes

$      124.7


$      119.6


 

4.3%

Income Taxes

(41.1)


(39.4)


 

4.3%

    Income from Continuing Operations

$       83.6


$        80.2


 

4.2%

Loss from Discontinued Operations, net of tax

(0.6)


---


 

nm

    Net Income

$       83.0


$        80.2


 

3.5%

Less: Income Attributable to Non-Controlling Interests

0.4


0.9


 

(55.6%)

    Net Income Attributable to Common Shareholders

 

$       82.6


$        79.3


 

4.2%







Amounts Attributable to Common Shareholders:






Reported Income from Continuing Operations

$       83.6


$        80.2


 

4.2%

Less: Income Attributable to Non-Controlling Interests

0.4


0.9


 

(55.6%)

Income from Continuing Operations, net of tax

$        83.2


$        79.3


 

4.9%

Loss from Discontinued Operations, net of tax

(0.6)


---


 

nm

Net Income Attributable to Common Shareholders

$        82.6


$        79.3


 

4.2%

Income from Continuing Operations Per Share

$        0.97


$        0.90


 

7.8%

Income Per Share

$        0.96


$        0.90


 

6.7%

Weighted Average Shares Outstanding

85.6


88.3


 

(3.1%)


nm – not meaningful


 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Balance Sheets

(Amounts In Millions)

(Unaudited)



March 31,


December 31,


2017


2016

Assets:




Cash and Cash Equivalents

$             72.2


$             24.0

Accounts Receivable, Net

852.2


879.0

Inventories

3,565.8


3,408.2

Other Current Assets

99.3


73.9

Assets Held for Sale

---


8.4

Total Current Assets

4,589.5


4,393.5

Property and Equipment, Net

1,874.7


1,806.5

Intangibles

1,985.4


1,711.3

Other Long-Term Assets

945.8


921.7

Total Assets

$        9,395.4


$        8,833.0





Liabilities and Equity:




Floor Plan Notes Payable

$        2,104.8


$        2,084.5

Floor Plan Notes Payable – Non-Trade

1,296.4


1,233.3

Accounts Payable

555.9


497.4

Accrued Expenses

413.9


360.0

Current Portion Long-Term Debt

48.4


48.3

Liabilities Held for Sale

0.8


6.1

Total Current Liabilities

4,420.2


4,229.6

Long-Term Debt

1,989.0


1,828.8

Other Long-Term Liabilities

1,089.3


995.1

Total Liabilities

7,498.5


7,053.5

Equity

1,896.9


1,779.5

Total Liabilities and Equity

$          9,395.4


$          8,833.0

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Operations

Selected Data

(Unaudited)



Three Months Ended


March 31,


2017


2016

Geographic Revenue Mix:




North America

56.5%


57.3%

U.K.

35.9%


35.4%

Other International

7.6%


7.3%

Total

100.0%


100.0%





Revenue: (Amounts in Millions)




Retail Automotive

$      4,756.4


$      4,512.9

Retail Commercial Trucks

211.7


206.7

Commercial Vehicles Australia/Power Systems and Other

113.0


105.0

Total

$      5,081.1


$      4,824.6





Gross Profit: (Amounts in Millions)




Retail Automotive

$         708.3


$         665.0

Retail Commercial Trucks

36.4


33.2

Commercial Vehicles Australia/Power Systems and Other

29.6


25.6

Total

$         774.3


$         723.8





Gross Margin:




Retail Automotive

14.9%


14.7%

Retail Commercial Trucks

17.2%


16.1%

Commercial Vehicles Australia/Power Systems and Other

26.2%


24.4%

Total

15.2%


15.0%

 


 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Operations

Selected Data

(Unaudited)



Three Months Ended


March 31,


2017


2016


Increase/

(Decrease)

Operating Items as a Percentage of Revenue:






Gross Profit

15.2%


15.0%


     20 bps

Selling, General and Administrative Expenses

11.8%


11.6%


     20 bps

Operating Income

3.0%


3.0%


     --- bps

Inc. From Cont. Ops. Before Inc. Taxes

2.5%


2.5%


     --- bps







Operating Items as a Percentage of Total Gross Profit:





Selling, General and Administrative Expenses

77.7%


77.2%


     50 bps

Operating Income

19.4%


19.9%


    (50 bps)








 

 



Three Months Ended



March 31,



2017


2016


Increase/
(Decrease)


(Amounts in Millions)







EBITDA*

$         172.1


$         157.6


9.2%


Floorplan Credits

$             8.3


$             8.9


(6.7%)


Rent Expense

$           53.4


$           51.5


3.7%


* See the following Non-GAAP reconciliation table.

 

 

 


 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations

Selected Data

(Unaudited)



Three Months Ended


March 31,


2017


2016

Retail Automotive Units:




New Retail

62,188


58,753

Used Retail

62,284


52,741

Total

124,472


111,494





Retail Automotive Revenue: (Amounts in Millions)




New Vehicles

$        2,307.4


$      2,268.2

Used Vehicles

1,541.0


1,412.4

Finance and Insurance, Net

137.4


118.4

Service and Parts

498.9


478.1

Fleet and Wholesale

271.7


235.8

Total Revenue

$        4,756.4


$      4,512.9





Retail Automotive Gross Profit: (Amounts in Millions)



New Vehicles

$           177.1


$         175.5

Used Vehicles

94.1


84.3

Finance and Insurance, Net

137.4


118.4

Service and Parts

293.7


281.4

Fleet and Wholesale

6.0


5.4

Total Gross Profit

$           708.3


$         665.0





Retail Automotive Revenue Per Vehicle Retailed:




New Vehicles

$         37,103


$         38,607

Used Vehicles

24,742


26,780





Retail Automotive Gross Profit Per Vehicle Retailed:




New Vehicles

$           2,848


$           2,988

Used Vehicles

1,512


1,598

Finance & Insurance

1,104


1,062


 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations

 Selected Data

(Unaudited)



Three Months Ended


March 31,


2017


2016

Retail Automotive Revenue Mix Percentages:




New Vehicles

48.5%


50.3%

Used Vehicles

32.4%


31.3%

Finance and Insurance, Net

2.9%


2.6%

Service and Parts

10.5%


10.6%

Fleet and Wholesale

5.7%


5.2%

Total

100.0%


100.0%





Retail Automotive Gross Profit Mix Percentages:




New Vehicles

25.0%


26.4%

Used Vehicles

13.3%


12.7%

Finance and Insurance, Net

19.4%


17.8%

Service and Parts

41.5%


42.3%

Fleet and Wholesale

0.8%


0.8%

Total

100.0%


100.0%

 

 


Three Months Ended


March 31,


2017


2016


Increase/

(Decrease)

Retail Automotive Gross Margin:






New Vehicles

7.7%


7.7%


    --- bps

Used Vehicles

6.1%


6.0%


10 bps

Service and Parts

58.9%


58.9%


    --- bps

Fleet and Wholesale

2.2%


2.3%


(10 bps)

Total Gross Margin

14.9%


14.7%


20 bps


 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations

Selected Data

(Unaudited)



Three Months Ended


March 31,


2017


2016

Retail Automotive Revenue Mix:




Premium:




BMW / MINI

23%


25%

Audi

14%


14%

Mercedes-Benz

10%


10%

Land Rover

7%


7%

Porsche

6%


5%

Lexus

3%


4%

Ferrari / Maserati

3%


2%

Acura

1%


1%

Bentley

1%


1%

Others

2%


3%

Total Premium

70%


72%

Volume Non-U.S.:




Toyota

10%


11%

Honda

7%


7%

Volkswagen

4%


3%

Nissan

1%


1%

Others

2%


2%

Total Volume Non-U.S.

24%


24%

U.S.:




General Motors / Chrysler / Ford

3%


4%

    Stand-Alone Used

3%


---

Total

100%


100%





Retail Automotive Geographic Revenue Mix:




U.S.

55.8%


56.6%

U.K.

38.4%


37.8%

Other International

5.8%


5.6%

Total

100.0%


100.0%





Retail Automotive Geographic Gross Profit Mix:




U.S.

60.7%


61.2%

U.K.

33.9%


33.5%

Other International

5.4%


5.3%

Total

100.0%


100.0%

 

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations

Same-Store

Selected Data

(Unaudited)



Three Months Ended


March 31,


2017


2016

Retail Automotive Same-Store Units:




New Retail

58,725


58,387

Used Retail

51,852


52,615

Total

110,577


111,002





Retail Automotive Same-Store Revenue: (Amounts in Millions)



New Vehicles

$        2,194.6


$        2,260.8

Used Vehicles

1,371.9


1,410.2

Finance and Insurance, Net

124.1


118.3

Service and Parts

481.2


477.1

Fleet and Wholesale

246.1


235.6

Total Revenue

$        4,417.9


$        4,502.0





Retail Automotive Same-Store Gross Profit: (Amounts in Millions)



New Vehicles

$           166.4


 

$           175.0

Used Vehicles

80.3


84.2

Finance and Insurance, Net

124.1


118.3

Service and Parts

282.8


281.1

Fleet and Wholesale

5.3


5.5

Total Gross Profit

$           658.9


$           664.1





Retail Automotive Same-Store Revenue Per Vehicle Retailed:



New Vehicles

$         37,370


 

$         38,721

Used Vehicles

26,457


26,802





Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:



New Vehicles

$           2,833


$           2,997

Used Vehicles

1,549


1,601

Finance & Insurance

1,123


1,066


 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Commercial Truck Operations

Selected Data

(Unaudited)

 



Three Months Ended


March 31,

Retail Commercial Truck Units:

2017


2016

New Retail

1,126


1,160

Used Retail

381


271

Total

1,507


1,431





Retail Commercial Truck Revenue: (Amounts in Millions)




New Vehicles

$                        110.7


$                        116.7

Used Vehicles

19.0


13.5

Finance and Insurance, Net

2.1


1.9

Service and Parts

78.0


71.4

Lease, Rental & Wholesale

1.9


3.2

Total Revenue

$                        211.7


$                        206.7

Retail Commercial Truck Gross Profit: (Amounts in Millions)




New Vehicles

$                            4.5


$                            4.9

Used Vehicles

1.0


(0.4)

Finance and Insurance, Net

2.2


1.9

Service and Parts

28.8


26.4

Lease, Rental & Wholesale

(0.1)


0.4

Total Gross Profit

$                          36.4


$                          33.2

Retail Commercial Truck Revenue Per Vehicle Retailed:




New Vehicles

$                      98,271


$                    100,618

Used Vehicles

49,845


49,727





Retail Commercial Truck Gross Profit Per Vehicle Retailed:




New Vehicles

$                        3,981


$                        4,201

Used Vehicles

2,589


(1,471)

Finance & Insurance

1,426


1,311





Retail Commercial Truck Gross Profit as a Percentage of Revenue




Gross Profit:




   New Vehicles

4.1%


4.2%

   Used Vehicles

5.3%


(3.0%)

   Service and Parts

36.9%


37.0%

   Lease, Rental & Wholesale

(5.3%)


12.5%

        Total Gross Profit

17.2%


16.1%


 

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Commercial Truck Operations

Same-Store

Selected Data

(Unaudited)

 



Three Months Ended


March 31,

Retail Commercial Truck Same-Store Units:

2017


2016

New Retail

959


1,160

Used Retail

320


271

Total

1,279


1,431





Retail Commercial Truck Same-Store Revenue: (Amounts in Millions)




New Vehicles

$                          92.5


$                        116.7

Used Vehicles

16.2


13.5

Finance and Insurance, Net

1.9


1.9

Service and Parts

67.6


71.4

Lease, Rental & Wholesale

1.9


3.2

Total Revenue

$                        180.1


$                        206.7

Retail Commercial Truck Same-Store Gross Profit: (Amounts in Millions)




New Vehicles

$                            4.1


$                            4.9

Used Vehicles

0.9


(0.4)

Finance and Insurance, Net

1.9


1.9

Service and Parts

25.4


26.4

Lease, Rental & Wholesale

(0.1)


0.4

Total Gross Profit

$                          32.2


$                          33.2

Retail Commercial Truck Same-Store Revenue Per Vehicle Retailed:




New Vehicles

$                      96,461


$                    100,618

Used Vehicles

50,607


49,727





Retail Commercial Truck Same-Store Gross Profit Per Vehicle Retailed:




New Vehicles

$                        4,279


$                        4,201

Used Vehicles

2,660


(1,471)

Finance & Insurance

1,523


1,311





Retail Commercial Truck Same-Store Gross Profit as a Percentage of Revenue




Gross Profit:




   New Vehicles

4.4%


4.2%

   Used Vehicles

5.6%


(3.0%)

   Service and Parts

37.6%


37.0%

   Lease, Rental & Wholesale

(5.3%)


12.5%

        Total Gross Profit

17.9%


16.1%









 

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Non-GAAP Reconciliations

(Unaudited)


 

The following table reconciles reported net income to earnings before interest, taxes, depreciation and amortization ("EBITDA") for the three months ended March 31, 2017 and 2016:




Three Months Ended


March 31,


2017


2016


Increase/

(Decrease)

(Amounts in Millions)






Net Income

$       83.0


$        80.2


3.5%

Add: Depreciation

22.4


20.8


7.7%

     Other Interest Expense

25.0


17.2


45.3%

     Income Taxes

41.1


39.4


4.3%

     Loss from Discontinued Operations, net of tax

0.6


---


     nm

EBITDA

$     172.1


$      157.6


9.2%







nm – not meaningful

 

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/penske-automotive-reports-record-first-quarter-results-300445790.html

SOURCE Penske Automotive Group, Inc.