8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 29, 2013

Penske Automotive Group, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	1-12297	22-3086739
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
2555 Telegraph Road, Bloomfield Hills, Michigan		48302
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 248-648-2500

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On April 29, 2013, we issued a press release announcing our first quarter 2013 financial results and other information. A copy of the press release is furnished as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure.

The following information is furnished pursuant to Item 7.01 "Regulation FD Disclosure."

On April 29, 2013, we issued a press release announcing our first quarter 2013 financial results and other information. A copy of the press release is furnished as Exhibit 99.1.

Item 8.01 Other Events.

Investors and others should note that we announce material financial information using our company website (www.penskeautomotive.com), our investor relations website (investors.penskeautomotive.com), SEC filings, press releases, public conference calls and webcasts. Information about Penske Automotive, its business, and its results of operations may also be announced by posts on the following social media channels:

• Penske Automotive Twitter feed (www.twitter.com/penskecarscorp)
• Penske Automotive’s Facebook page (www.facebook.com/penskecars)

The information that we post on these social media channels could be deemed to be material information. As a result, we encourage investors, the media, and others interested in Penske Automotive to review the information that we post on these social media channels. These channels may be updated from time to time on Penske Automotive’s investor relations website.

Item 9.01 Financial Statements and Exhibits.

99.1 Press Release

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Penske Automotive Group, Inc.
April 29, 2013	By:	/s/Shane M. Spradlin
		Name: Shane M. Spradlin
		Title: Executive Vice President

Exhibit Index

Exhibit No.	Description
99.1	Press Release.

EX-99.1

FOR IMMEDIATE RELEASE

PENSKE AUTOMOTIVE REPORTS RECORD RESULTS

Income and Earnings per Share Highest in Company History

• Revenue Increased 7.7% to $3.4 Billion

• Same-store Retail Revenue Increased 7.4%

•	Income from Continuing Operations Increased 13.9% to $56.9 Million
•	Earnings per Share from Continuing Operations Increased 14.5% to
	$0.63
•	EBITDA Increased 9.5% to $111.8 Million
•	Repurchased 410,000 shares
BLOOMFIELD HILLS, MI, April 29, 2013 – Penske Automotive Group, Inc. (NYSE:PAG), an
international automotive retailer, announced today the highest income and earnings per share in
company history. For the first quarter 2013, income from continuing operations attributable to
common shareholders increased 13.9% to $56.9 million and related earnings per share increased 14.5%
to $0.63 per share. This compares to income from continuing operations attributable to common
shareholders of $49.9 million, or $0.55 per share in the same period last year.

First quarter 2013 revenue was $3.4 billion, compared to $3.2 billion in the same period last year, an increase of 7.7%. On a same-store basis, retail revenue increased 7.4%. The revenue growth was driven by strong performance across each business area including a 9.9% increase in total retail unit sales and 6.8% on a same-store basis. Gross profit improved 7.9% to $533.0 million while overall gross margin increased 10 basis points. Operating income increased 11.7% to $105.2 million.

Highlights of the First Quarter

• Total Retail Unit Sales increased 9.9% to 85,821

• +12.7% in the United States; +4.5% Internationally

• New unit retail sales +9.7%

• Used unit retail sales +10.2%

• Same-store Retail Revenue increased 7.4%

• New +10.1%; Used +4.5%; Finance & Insurance +9.9%; Service and Parts +3.1%

• +11.5% in the United States; +1.2% Internationally

• Average Transaction Price Per Unit

• New $38,099; +2.9%

• Used $25,076; -2.6%

• Average Gross Profit Per Unit

• New $2,959, -$149/unit; Gross Margin 7.8%, -60 bps

• Used $1,958, -$133/unit; Gross Margin 7.8%, -30 bps

• Finance & Insurance $1,010, +$14/unit

Chairman Roger Penske said, “Penske Automotive Group delivered strong operating results and record profitability in the first quarter, including double-digit growth in operating income, income from continuing operations and earnings per share. I was pleased to see our gross margin improve to 15.7% on the strength of a 3.1% increase in same-store service and parts revenue and a 60 basis-point increase in service and parts gross margin to 58.4%. Additionally, SG&A as a percent of gross profit improved 80 basis points year-over-year to 77.5% and 200 basis-points sequentially, helping drive an increase in our operating margin to 3.1%.”

Securities Repurchase Activity

During the first quarter, the company acquired 410,000 shares of its common stock for an aggregate purchase price of $12.7 million, or an average price of $30.93 per share. The company currently has remaining authorization from its Board of Directors to repurchase up to $85.6 million of its outstanding common stock or debt. Securities may be acquired from time to time either through open market purchases, negotiated transactions or other means.

Conference Call

Penske Automotive will host a conference call discussing financial results relating to the first quarter of 2013 on April 29, 2013, at 2:00 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial (800) 230-1059 [International, please dial (612) 234-9959]. The call will also be simultaneously broadcast over the Internet through the Investors Relations section of the Penske Automotive Group website. Additionally, an investor presentation relating to the first quarter 2013 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., headquartered in Bloomfield Hills, Michigan, operates 342 retail automotive franchises, representing 40 different brands and 30 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 174 franchises in 18 states and Puerto Rico and 168 franchises located outside the United States, primarily in the United Kingdom. Penske Automotive is a member of the Fortune 500 and Russell 2000 and has approximately 16,700 employees.

Non-GAAP Financial Measures

This release contains certain non-GAAP financial measures as defined under SEC rules, such as 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 and outlook. 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, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters or other disruptions that interrupt the supply of vehicles or parts to us; changes in consumer credit availability, the outcome of legal, regulatory 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, 2012, 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.

Find a vehicle: http://www.penskecars.com
Engage Penske Automotive: http://www.penskesocial.com
Like Penske Automotive on Facebook: https://facebook.com/PenskeCars
Follow Penske Automotive on Twitter: https://twitter.com/#!/Penskecarscorp
Visit Penske Automotive on YouTube: http://www.youtube.com/penskecars

Inquiries should contact:

David K. Jones
Executive Vice President and
Chief Financial Officer
Penske Automotive Group, Inc.
248-648-2800
dave.jones@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 Thousands, Except Per Share Data)
(Unaudited)

	Three Months Ended
	March 31,
	2013			2012
Revenues:
New Vehicle	$	1,742,833		$	1,543,991
Used Vehicle		1,004,964			936,091
Finance and Insurance, Net		86,685			77,752
Service and Parts		383,483			359,206
Fleet, Wholesale and Other		181,902			239,350
Total Revenues	$	3,399,867		$	3,156,390
Cost of Sales:
New Vehicle		1,607,458			1,414,388
Used Vehicle		926,493			860,032
Service and Parts		159,615			151,654
Fleet, Wholesale and Other		173,314			236,457
Total Cost of Sales		2,866,880			2,662,531
Gross Profit		532,987			493,859
SG&A Expenses		413,312			386,705
Depreciation		14,449			12,950
Operating Income		105,226			94,204
Floor Plan Interest Expense		(10,211	)		(9,493	)
Other Interest Expense		(11,776	)		(12,131	)
Equity in Earnings of Affiliates		2,348			4,410
Income from Continuing Operations Before Income Taxes		85,587			76,990
Income Taxes		(28,381	)		(26,908	)
Income from Continuing Operations		57,206			50,082
(Loss) Income from Discontinued Operations, Net of Tax		813			(3,076	)
Net Income		58,019			47,006
Less: Income Attributable to Non-Controlling Interests		(355	)		(188	)
Net Income Attributable to Common Shareholders	$	57,664		$	46,818
Income from Continuing Operations Per Share	$	0.63		$	0.55
Income Per Share	$	0.64		$	0.52
Weighted Average Shares Outstanding		90,457			90,338
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations	$	57,206		$	50,082
Less: Income Attributable to Non-Controlling Interests		(355	)		(188	)
Income from Continuing Operations, net of tax	$	56,851		$	49,894
(Loss) Income from Discontinued Operations, net of tax		813			(3,076	)
Net Income	$	57,664		$	46,818

PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)

	March 31,		December 31,
	2013		2012
Assets
Cash and Cash Equivalents	$	31,627	$	43,753
Accounts Receivable, Net		527,663		552,868
Inventories		2,023,529		1,991,167
Other Current Assets		89,488		90,854
Assets Held for Sale		108,468		94,441
Total Current Assets		2,780,775		2,773,083
Property and Equipment, Net		1,078,627		1,023,781
Intangibles		1,225,591		1,258,012
Other Long-Term Assets		329,989		324,114
Total Assets	$	5,414,982	$	5,378,990
Liabilities and Equity
Floor Plan Notes Payable	$	1,425,199	$	1,408,363
Floor Plan Notes Payable – Non-Trade		744,223		716,621
Accounts Payable		287,744		263,349
Accrued Expenses		226,080		223,574
Current Portion Long-Term Debt		33,053		19,493
Liabilities Held for Sale		81,452		62,156
Total Current Liabilities		2,797,751		2,693,556
Long-Term Debt		858,676		918,024
Other Long-Term Liabilities		452,979		451,089
Total Liabilities		4,109,406		4,062,669
Equity		1,305,576		1,316,321
Total Liabilities and Equity	$	5,414,982	$	5,378,990

PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)

	Three Months Ended
	March 31,
							% Increase/
	2013			2012			(Decrease)
Revenues:
New Vehicle	$	1,742,833		$	1,543,991			12.9	%
Used Vehicle		1,004,964			936,091			7.4	%
Finance and Insurance, Net		86,685			77,752			11.5	%
Service and Parts		383,483			359,206			6.8	%
Fleet, Wholesale and Other		181,902			239,350			(24.0	%)
Total Revenues	$	3,399,867		$	3,156,390			7.7	%
Cost of Sales:
New Vehicle		1,607,458			1,414,388			13.7	%
Used Vehicle		926,493			860,032			7.7	%
Service and Parts		159,615			151,654			5.2	%
Fleet, Wholesale and Other		173,314			236,457			(26.7	%)
Total Cost of Sales		2,866,880			2,662,531			7.7	%
Gross Profit		532,987			493,859			7.9	%
SG&A Expenses		413,312			386,705			6.9	%
Depreciation		14,449			12,950			11.6	%
Operating Income		105,226			94,204			11.7	%
Floor Plan Interest Expense		(10,211	)		(9,493	)		7.6	%
Other Interest Expense		(11,776	)		(12,131	)		(2.9	%)
Equity in Earnings of Affiliates		2,348			4,410			(46.8	%)
Income from Continuing Operations Before Income Taxes		85,587			76,990			11.2	%
Income Taxes		(28,381	)		(26,908	)		5.5	%
Income from Continuing Operations		57,206			50,082			14.2	%
(Loss) Income from Discontinued Operations, Net of Tax		813			(3,076	)	NM
Net Income		58,019			47,006			23.4	%
Less: Income Attributable to Non-Controlling Interests		(355	)		(188	)		88.8	%
Net Income Attributable to Common Shareholders	$	57,664		$	46,818			23.2	%
Income from Continuing Operations Per Share	$	0.63		$	0.55			14.5	%
Income Per Share	$	0.64		$	0.52			23.1	%
Weighted Average Shares Outstanding		90,457			90,338			0.1	%
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations	$	57,206		$	50,082			14.2	%
Less: Income Attributable to Non-Controlling Interests		(355	)		(188	)		88.8	%
Income from Continuing Operations, net of tax	$	56,851		$	49,894			13.9	%
(Loss) Income from Discontinued Operations, net of tax		813			(3,076	)	NM
Net Income	$	57,664		$	46,818			23.2	%

NM – not meaningful

PENSKE AUTOMOTIVE GROUP, INC.
Selected Data
(Unaudited)

	Three Months Ended
	March 31,
							% Increase/
	2013			2012			(Decrease)
Total Retail Units:
New Retail		45,745			41,704			9.7	%
Used Retail		40,076			36,371			10.2	%
Total Retail		85,821			78,075			9.9	%
Same-Store Retail Units:
New Same-Store Retail		44,203			41,353			6.9	%
Used Same-Store Retail		38,492			36,109			6.6	%
Total Same-Store Retail		82,695			77,462			6.8	%
Same-Store Retail Revenue: (Amounts in thousands)
New Vehicles	$	1,687,000		$	1,532,293			10.1	%
Used Vehicles		974,251			931,971			4.5	%
Finance and Insurance, Net		84,839			77,198			9.9	%
Service and Parts		368,498			357,309			3.1	%
Total Same-Store Retail	$	3,114,588		$	2,898,771			7.4	%
Revenue Mix:
New Vehicles		51.3	%		48.9	%
Used Vehicles		29.6	%		29.7	%
Finance and Insurance, Net		2.5	%		2.5	%
Service and Parts		11.3	%		11.4	%
Fleet, Wholesale and Other		5.3	%		7.5	%
Average Revenue per Vehicle Retailed:
New Vehicles	$	38,099		$	37,023			2.9	%
Used Vehicles	$	25,076		$	25,737			(2.6	%)
Gross Profit per Vehicle Retailed:
New Vehicles	$	2,959		$	3,108			(4.8	%)
Used Vehicles	$	1,958		$	2,091			(6.4	%)
Finance and Insurance	$	1,010		$	996			1.4	%
Operating items as a percentage of revenue:
New Vehicle Gross Profit		7.8	%		8.4	%	(60 bps)
Used Vehicle Gross Profit		7.8	%		8.1	%	(30 bps)
Service and Parts Gross Profit		58.4	%		57.8	%	60 bps
Total Gross Profit		15.7	%		15.6	%	10 bps
Selling, General and Admin. Expenses		12.2	%		12.3	%	(10 bps)
Operating Income		3.1	%		3.0	%	10 bps
Inc. From Cont. Ops. Before Inc. Taxes		2.5	%		2.4	%	10 bps
Operating items as a percentage of total gross profit:
Selling, General and Administrative Expenses		77.5	%		78.3	%	(80 bps)
Operating Income		19.7	%		19.1	%	60 bps

PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)
(Unaudited)

	Three Months Ended
	March 31,
					% Increase/
	2013		2012		(Decrease)
Other (Amounts in Thousands):
EBITDA *	$	111,812	$	102,071		9.5	%
Rent Expense	$	44,487	$	42,908		3.7	%
Floorplan Credits	$	5,943	$	4,636		28.2	%

* See the following Non-GAAP reconciliation table

Selected Data
Brand Revenue Mix
(Unaudited)

	Three Months Ended
	March 31,
	2013			2012
Brand Revenue Mix:
Premium:
BMW		25	%		24	%
Audi		13	%		13	%
Mercedes-Benz		10	%		11	%
Lexus		4	%		4	%
Land Rover		5	%		5	%
Porsche		4	%		4	%
Ferrari / Maserati		3	%		3	%
Acura		1	%		1	%
Other		4	%		4	%
Total Premium		69	%		69	%
Foreign:
Toyota		11	%		10	%
Honda		10	%		11	%
Nissan		2	%		1	%
Volkswagen		2	%		2	%
Other		2	%		3	%
Total Foreign		27	%		27	%
Domestic Big 3
General Motors / Chrysler / Ford		4	%		4	%
Revenue Mix:
U.S.		63	%		61	%
International		37	%		39	%

PENSKE AUTOMOTIVE GROUP, INC.
Non-GAAP Reconciliations
(Unaudited)

Reconciliation of first quarter 2013 and 2012 net income to EBITDA (earnings before interest, income taxes, depreciation and amortization):

	Three Months Ended
	March 31,
						% Increase/
(Amounts in Thousands)	2013			2012		(Decrease)
Net Income	$	58,019		$	47,006		23.4	%
Depreciation		14,449			12,950		11.6	%
Other Interest Expense		11,776			12,131		(2.9	%)
Income Taxes		28,381			26,908		5.5	%
Loss (income) from Discontinued Operations, net		(813	)		3,076	NM
EBITDA	$	111,812		$	102,071		9.5	%

NM – not meaningful

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