Significant Growth in Retail Unit Sales and Revenue
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.--(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.
smart USA
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.
Conference Call
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 www.penskeautomotive.com.
About Penske Automotive
Penske Automotive Group, Inc. (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 (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.
|
| |
|
PENSKE AUTOMOTIVE GROUP, INC.
|
|
Consolidated Statements of Income
|
|
(Amounts In Thousands, Except Per Share Data)
|
|
(Unaudited)
|
| |
|
| |
Second Quarter
|
| |
2010
|
|
2009
|
|
Revenues:
| | | | |
|
New Vehicle
| |
$1,355,813
| | |
$1,090,127
| |
|
Used Vehicle
| |
749,669
| | |
658,787
| |
|
Finance and Insurance, Net
| |
63,558
| | |
54,674
| |
|
Service and Parts
| |
332,160
| | |
331,106
| |
|
Distribution
| |
19,933
| | |
53,152
| |
|
Fleet and Wholesale Vehicle
| |
182,555
|
| |
130,849
|
|
|
Total Revenues
| |
2,703,688
|
| |
2,318,695
|
|
|
Cost of Sales:
| | | | |
|
New Vehicle
| |
1,244,630
| | |
1,004,151
| |
|
Used Vehicle
| |
689,552
| | |
599,526
| |
|
Service and Parts
| |
141,655
| | |
148,692
| |
|
Distribution
| |
17,227
| | |
45,702
| |
|
Fleet and Wholesale Vehicle
| |
180,280
|
| |
126,869
|
|
|
Total Cost of Sales
| |
2,273,344
|
| |
1,924,940
|
|
|
Gross Profit
| |
430,344
| | |
393,755
| |
|
SG&A Expenses
| |
355,177
| | |
327,389
| |
|
Depreciation
| |
12,054
|
| |
13,811
|
|
|
Operating Income
| |
63,113
| | |
52,555
| |
|
Floor Plan Interest Expense
| |
(8,321
|
)
| |
(8,969
|
)
|
|
Other Interest Expense
| |
(12,542
|
)
| |
(13,687
|
)
|
|
Debt Discount Amortization
| |
(2,428
|
)
| |
(3,135
|
)
|
|
Equity in Earnings of Affiliates
| |
4,784
| | |
3,466
| |
|
Gain on Debt Repurchase
| |
422
|
| |
--
|
|
|
Income from Continuing Operations Before Income Taxes
| |
45,028
| | |
30,230
| |
|
Income Taxes
| |
(15,625
|
)
| |
(10,329
|
)
|
|
Income from Continuing Operations
| |
29,403
| | |
19,901
| |
|
Income (Loss) from Discontinued Operations, Net of Tax
| |
281
|
| |
(5,734
|
)
|
|
Net Income
| |
29,684
| | |
14,167
| |
|
Income Attributable to Non-Controlling Interests
| |
(243
|
)
| |
(88
|
)
|
|
Net Income Attributable to Common Shareholders
| |
$29,441
|
| |
$14,079
|
|
|
Income from Continuing Operations Per Share
| |
$0.32
|
| |
$0.22
|
|
|
Income Per Share
| |
$0.32
|
| |
$0.15
|
|
|
Weighted Average Shares Outstanding
| |
92,206
|
| |
91,592
|
|
| Amounts Attributable to Common Shareholders: | | | | |
|
Reported Income from Continuing Operations
| |
$29,403
| | |
$19,901
| |
|
Income Attributable to Non-Controlling Interests
| |
(243
|
)
| |
(88
|
)
|
|
Income from Continuing Operations, net of tax
| |
29,160
| | |
19,813
| |
|
Loss from Discontinued Operations, net of tax
| |
281
|
| |
(5,734
|
)
|
|
Net Income
| |
$29,441
|
| |
$14,079
|
|
|
| |
|
PENSKE AUTOMOTIVE GROUP, INC.
|
|
Consolidated Statements of Income
|
|
(Amounts In Thousands, Except Per Share Data)
|
|
(Unaudited)
|
| |
|
| |
Six Months
|
| |
2010
|
|
2009
|
|
Revenues:
| | | | |
|
New Vehicle
| |
$2,588,136
| | |
$2,061,323
| |
|
Used Vehicle
| |
1,446,337
| | |
1,275,286
| |
|
Finance and Insurance, Net
| |
122,992
| | |
103,137
| |
|
Service and Parts
| |
666,183
| | |
658,009
| |
|
Distribution
| |
27,869
| | |
133,265
| |
|
Fleet and Wholesale Vehicle
| |
337,850
|
| |
245,975
|
|
|
Total Revenues
| |
5,189,367
|
| |
4,476,995
|
|
|
Cost of Sales:
| | | | |
|
New Vehicle
| |
2,375,452
| | |
1,903,990
| |
|
Used Vehicle
| |
1,329,500
| | |
1,160,009
| |
|
Service and Parts
| |
287,275
| | |
298,867
| |
|
Distribution
| |
24,949
| | |
114,016
| |
|
Fleet and Wholesale Vehicle
| |
331,819
|
| |
238,319
|
|
|
Total Cost of Sales
| |
4,348,995
|
| |
3,715,201
|
|
|
Gross Profit
| |
840,372
| | |
761,794
| |
|
SG&A Expenses
| |
695,691
| | |
640,055
| |
|
Depreciation
| |
24,428
|
| |
26,692
|
|
|
Operating Income
| |
120,253
| | |
95,047
| |
|
Floor Plan Interest Expense
| |
(16,842
|
)
| |
(18,431
|
)
|
|
Other Interest Expense
| |
(25,262
|
)
| |
(28,187
|
)
|
|
Debt Discount Amortization
| |
(5,343
|
)
| |
(6,773
|
)
|
|
Equity in Earnings of Affiliates
| |
4,355
| | |
4,180
| |
|
Gain on Debt Repurchase
| |
1,027
|
| |
10,429
|
|
|
Income from Continuing Operations Before Income Taxes
| |
78,188
| | |
56,265
| |
|
Income Taxes
| |
(28,060
|
)
| |
(20,074
|
)
|
|
Income from Continuing Operations
| |
50,128
| | |
36,191
| |
|
Loss from Discontinued Operations, Net of Tax
| |
(112
|
)
| |
(5,822
|
)
|
|
Net Income
| |
50,016
| | |
30,369
| |
|
Income Attributable to Non-Controlling Interests
| |
(221
|
)
| |
(8
|
)
|
|
Net Income Attributable to Common Shareholders
| |
$49,795
|
| |
$30,361
|
|
|
Income from Continuing Operations Per Share
| |
$0.54
|
| |
$0.40
|
|
|
Income Per Share
| |
$0.54
|
| |
$0.33
|
|
|
Weighted Average Shares Outstanding
| |
92,086
|
| |
91,537
|
|
| Amounts Attributable to Common Shareholders: | | | | |
|
Reported Income from Continuing Operations
| |
$50,128
| | |
$36,191
| |
|
Income Attributable to Non-Controlling Interests
| |
(221
|
)
| |
(8
|
)
|
|
Income from Continuing Operations, net of tax
| |
49,907
| | |
36,183
| |
|
Loss from Discontinued Operations, net of tax
| |
(112
|
)
| |
(5,822
|
)
|
|
Net Income
| |
$49,795
|
| |
$30,361
|
|
|
| |
| |
|
PENSKE AUTOMOTIVE GROUP, INC.
|
|
Consolidated Condensed Balance Sheets
|
|
(Amounts In Thousands)
|
|
(Unaudited)
|
| | | |
|
| |
6/30/10
| |
12/31/09
|
| Assets | | | | |
|
Cash and Cash Equivalents
| |
$17,664
| |
$13,999
|
|
Accounts Receivable, Net
| |
351,013
| |
321,226
|
|
Inventories
| |
1,364,718
| |
1,302,495
|
|
Other Current Assets
| |
106,479
| |
95,426
|
|
Assets Held for Sale
| |
572
| |
10,625
|
|
Total Current Assets
| |
1,840,446
| |
1,743,771
|
|
Property and Equipment, Net
| |
707,832
| |
726,808
|
|
Intangibles
| |
994,947
| |
1,011,803
|
|
Other Long-Term Assets
| |
295,438
| |
313,625
|
|
Total Assets
| |
$3,838,663
| |
$3,796,007
|
| | | |
|
| Liabilities and Equity | | | | |
|
Floor Plan Notes Payable
| |
$818,339
| |
$769,657
|
|
Floor Plan Notes Payable – Non-Trade
| |
499,410
| |
423,316
|
|
Accounts Payable
| |
209,535
| |
189,989
|
|
Accrued Expenses
| |
218,716
| |
227,294
|
|
Current Portion Long-Term Debt
| |
16,551
| |
12,442
|
|
Liabilities Held for Sale
| |
501
| |
7,675
|
|
Total Current Liabilities
| |
1,763,052
| |
1,630,373
|
|
Long-Term Debt
| |
844,292
| |
933,966
|
|
Other Long-Term Liabilities
| |
269,585
| |
285,629
|
|
Total Liabilities
| |
2,876,929
| |
2,849,968
|
|
Equity
| |
961,734
| |
946,039
|
|
Total Liabilities and Equity
| |
$3,838,663
| |
$3,796,007
|
|
| |
| |
|
PENSKE AUTOMOTIVE GROUP, INC.
|
|
Selected Data
|
|
(Unaudited)
|
| | | |
|
| |
Second Quarter
| |
Six Months
|
| |
2010
|
|
2009
| |
2010
|
|
2009
|
|
Total Retail Units:
| | | | | | | | |
|
New Retail
| |
39,676
| | |
33,176
| | |
75,815
| | |
63,911
| |
|
Used Retail
| |
29,232
|
| |
26,100
|
| |
55,996
|
| |
53,090
|
|
|
Total Retail
| |
68,908
|
| |
59,276
|
| |
131,811
|
| |
117,001
|
|
| | | | | | | |
|
|
smart Wholesale Units
| |
2,040
|
| |
3,659
|
| |
2,996
|
| |
9,373
|
|
| | | | | | | |
|
|
Same-Store Retail Units:
| | | | | | | | |
|
New Same-Store Retail
| |
38,091
| | |
33,140
| | |
73,482
| | |
63,750
| |
|
Used Same-Store Retail
| |
28,239
|
| |
26,070
|
| |
54,512
|
| |
52,854
|
|
|
Total Same-Store Retail
| |
66,330
|
| |
59,210
|
| |
127,994
|
| |
116,604
|
|
| | | | | | | |
|
|
Same-Store Retail Revenue:
| | | | | | | | |
|
New Vehicles
| |
$1,301,745
| | |
$1,088,359
| | |
$2,498,367
| | |
$2,049,239
| |
|
Used Vehicles
| |
727,441
| | |
657,920
| | |
1,396,170
| | |
1,261,872
| |
|
Finance and Insurance, Net
| |
62,064
| | |
54,620
| | |
119,743
| | |
102,669
| |
|
Service and Parts
| |
321,851
|
| |
329,492
|
| |
649,707
|
| |
652,477
|
|
|
Total Same-Store Retail
| |
$2,413,101
|
| |
$2,130,391
|
| |
$4,663,987
|
| |
$4,066,257
|
|
| | | | | | | |
|
|
Same-Store Retail Revenue Growth:
| | | | | | | | |
|
New Vehicles
| |
19.6
|
%
| |
(39.2
|
%)
| |
21.9
|
%
| |
(41.0
|
%)
|
|
Used Vehicles
| |
10.6
|
%
| |
(23.0
|
%)
| |
10.6
|
%
| |
(25.0
|
%)
|
|
Finance and Insurance, Net
| |
13.6
|
%
| |
(29.8
|
%)
| |
16.6
|
%
| |
(33.3
|
%)
|
|
Service and Parts
| |
(2.3
|
%)
| |
(11.5
|
%)
| |
(0.4
|
%)
| |
(11.8
|
%)
|
| | | | | | | |
|
|
Revenue Mix:
| | | | | | | | |
|
New Vehicles
| |
50.1
|
%
| |
47.0
|
%
| |
49.9
|
%
| |
46.0
|
%
|
|
Used Vehicles
| |
27.7
|
%
| |
28.4
|
%
| |
27.9
|
%
| |
28.5
|
%
|
|
Finance and Insurance, Net
| |
2.4
|
%
| |
2.4
|
%
| |
2.4
|
%
| |
2.3
|
%
|
|
Service and Parts
| |
12.3
|
%
| |
14.3
|
%
| |
12.8
|
%
| |
14.7
|
%
|
|
Distribution
| |
0.7
|
%
| |
2.3
|
%
| |
0.5
|
%
| |
3.0
|
%
|
|
Fleet and Wholesale
| |
6.8
|
%
| |
5.6
|
%
| |
6.5
|
%
| |
5.5
|
%
|
| | | | | | | |
|
|
Average Retail Selling Price:
| | | | | | | | |
|
New Vehicles
| |
$34,172
| | |
$32,859
| | |
$34,137
| | |
$32,253
| |
|
Used Vehicles
| |
25,645
| | |
25,241
| | |
25,829
| | |
24,021
| |
| | | | | | | |
|
|
Gross Margin
| |
15.9
|
%
| |
17.0
|
%
| |
16.2
|
%
| |
17.0
|
%
|
| | | | | | | |
|
|
Retail Gross Margin – by Product:
| | | | | | | | |
|
New Vehicles
| |
8.2
|
%
| |
7.9
|
%
| |
8.2
|
%
| |
7.6
|
%
|
|
Used Vehicles
| |
8.0
|
%
| |
9.0
|
%
| |
8.1
|
%
| |
9.0
|
%
|
|
Service and Parts
| |
57.4
|
%
| |
55.1
|
%
| |
56.9
|
%
| |
54.6
|
%
|
|
| |
| |
|
PENSKE AUTOMOTIVE GROUP, INC.
|
|
Selected Data (Continued)
|
|
(Unaudited)
|
| | | |
|
| |
Second Quarter
| |
Six Months
|
| |
2010
|
|
2009
| |
2010
|
|
2009
|
|
Gross Profit per Retail Transaction:
| | | | | | | | |
|
New Vehicles
| |
$2,802
| | |
$2,591
| | |
$2,805
| | |
$2,462
| |
|
Used Vehicles
| |
2,056
| | |
2,271
| | |
2,086
| | |
2,171
| |
|
Finance and Insurance
| |
922
| | |
922
| | |
933
| | |
882
| |
| | | | | | | |
|
|
Brand Mix:
| | | | | | | | |
|
BMW
| |
20
|
%
| |
21
|
%
| |
20
|
%
| |
22
|
%
|
|
Toyota / Lexus
| |
18
|
%
| |
18
|
%
| |
18
|
%
| |
19
|
%
|
|
Honda / Acura
| |
15
|
%
| |
15
|
%
| |
14
|
%
| |
15
|
%
|
|
Audi
| |
11
|
%
| |
11
|
%
| |
11
|
%
| |
10
|
%
|
|
Mercedes Benz
| |
10
|
%
| |
10
|
%
| |
10
|
%
| |
10
|
%
|
|
Land Rover
| |
4
|
%
| |
3
|
%
| |
5
|
%
| |
4
|
%
|
|
Porsche
| |
4
|
%
| |
4
|
%
| |
4
|
%
| |
4
|
%
|
|
Ferrari / Maserati
| |
3
|
%
| |
3
|
%
| |
3
|
%
| |
3
|
%
|
|
Other
| |
15
|
%
| |
15
|
%
| |
15
|
%
| |
13
|
%
|
| |
100
|
%
| |
100
|
%
| |
100
|
%
| |
100
|
%
|
| | | | | | | |
|
|
Premium
| |
64
|
%
| |
65
|
%
| |
65
|
%
| |
65
|
%
|
|
Foreign
| |
31
|
%
| |
31
|
%
| |
31
|
%
| |
31
|
%
|
|
Domestic Big 3
| |
5
|
%
| |
4
|
%
| |
4
|
%
| |
4
|
%
|
| |
100
|
%
| |
100
|
%
| |
100
|
%
| |
100
|
%
|
| | | | | | | |
|
|
Revenue Mix:
| | | | | | | | |
|
U.S.
| |
65
|
%
| |
64
|
%
| |
63
|
%
| |
64
|
%
|
|
International
| |
35
|
%
| |
36
|
%
| |
37
|
%
| |
36
|
%
|
| |
100
|
%
| |
100
|
%
| |
100
|
%
| |
100
|
%
|
| | | | | | | |
|
|
Rent Expense
| |
$41,455
| | |
$40,859
| | |
$82,686
| | |
$80,484
| |
Source: Penske Automotive Group, Inc.
Contact:
Penske Automotive Group, Inc.
Bob O’Shaughnessy
Chief
Financial Officer
248-648-2800
boshaughnessy@penskeautomotive.com
or
Anthony
R. Pordon
Senior Vice President
248-648-2540
tpordon@penskeautomotive.com