Delaware | 1-13107 | 73-1105145 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | 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. |
Item 9.01 | Financial Statements and Exhibits. |
99.1 | Press Release of AutoNation, Inc. dated April 22, 2015 regarding results of operations for the fiscal quarter ended March 31, 2015. |
AUTONATION, INC. | |||||
Date: | April 22, 2015 | By: | /s/ Jonathan P. Ferrando | ||
Jonathan P. Ferrando | |||||
Executive Vice President - General Counsel, Corporate Development and Human Resources |
Contact: Marc Cannon (954) 769-3146 cannonm@autonation.com Investor contacts: Andrew Wamser (954) 769-7023 wamsera@autonation.com Robert Quartaro (954) 769-7342 quartaror@autonation.com |
• | EPS from continuing operations was $0.97, a record for first quarter results and an increase of 29% compared to first quarter 2014 adjusted EPS from continuing operations of $0.75 ($0.79 for the first quarter of 2014 on a GAAP basis) |
• | Net income from continuing operations was $112 million, up 23% compared to first quarter 2014 adjusted net income from continuing operations of $91 million ($96 million for the first quarter of 2014 on a GAAP basis) |
• | Total revenue of $4.9 billion, up 13% compared to the year-ago period, increasing across all major business sectors |
• | Domestic – Domestic segment income(2) was $79 million compared to year-ago segment income of $64 million, an increase of 24%. |
• | Import – Import segment income(2) was $75 million compared to year-ago segment income of $65 million, an increase of 15%. |
• | Premium Luxury – Premium Luxury segment income(2) was $94 million compared to year-ago segment income of $83 million, an increase of 13%. |
(1) | AutoNation has three operating segments: Domestic, Import, and Premium Luxury. The Domestic segment is comprised of stores that sell vehicles manufactured by General Motors, Ford, and FCA US (formerly Chrysler); the Import segment is comprised of stores that sell vehicles manufactured primarily by Toyota, Honda, Nissan, and Hyundai; and the Premium Luxury segment is comprised of stores that sell vehicles manufactured primarily by Mercedes-Benz, BMW, Lexus, and Audi. |
(2) | Segment income represents income for each of our reportable segments and is defined as operating income less floorplan interest expense. |
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Revenue: | ||||||||
New vehicle | $ | 2,769.6 | $ | 2,428.6 | ||||
Used vehicle | 1,193.2 | 1,049.7 | ||||||
Parts and service | 743.4 | 671.0 | ||||||
Finance and insurance, net | 207.6 | 172.4 | ||||||
Other | 30.4 | 41.8 | ||||||
Total revenue | 4,944.2 | 4,363.5 | ||||||
Cost of sales: | ||||||||
New vehicle | 2,608.1 | 2,282.7 | ||||||
Used vehicle | 1,089.5 | 955.4 | ||||||
Parts and service | 423.4 | 384.3 | ||||||
Other | 23.3 | 33.7 | ||||||
Total cost of sales | 4,144.3 | 3,656.1 | ||||||
Gross profit | 799.9 | 707.4 | ||||||
Selling, general, and administrative expenses | 557.6 | 500.7 | ||||||
Depreciation and amortization | 28.7 | 25.6 | ||||||
Other income, net | (1.3 | ) | (8.0 | ) | ||||
Operating income | 214.9 | 189.1 | ||||||
Non-operating income (expense) items: | ||||||||
Floorplan interest expense | (13.2 | ) | (13.2 | ) | ||||
Other interest expense | (21.4 | ) | (21.6 | ) | ||||
Interest income | 0.1 | — | ||||||
Other income, net | 1.1 | 1.5 | ||||||
Income from continuing operations before income taxes | 181.5 | 155.8 | ||||||
Income tax provision | 69.8 | 60.3 | ||||||
Net income from continuing operations | 111.7 | 95.5 | ||||||
Loss from discontinued operations, net of income taxes | (0.2 | ) | (0.4 | ) | ||||
Net income | $ | 111.5 | $ | 95.1 | ||||
Diluted earnings (loss) per share*: | ||||||||
Continuing operations | $ | 0.97 | $ | 0.79 | ||||
Discontinued operations | $ | — | $ | — | ||||
Net income | $ | 0.97 | $ | 0.78 | ||||
Weighted average common shares outstanding | 115.1 | 121.3 | ||||||
Common shares outstanding, net of treasury stock, at period end | 113.9 | 119.4 |
Operating Highlights | Three Months Ended March 31, | ||||||||||||||
2015 | 2014 | $ Variance | % Variance | ||||||||||||
Revenue: | |||||||||||||||
New vehicle | $ | 2,769.6 | $ | 2,428.6 | $ | 341.0 | 14.0 | ||||||||
Retail used vehicle | 1,094.1 | 945.8 | 148.3 | 15.7 | |||||||||||
Wholesale | 99.1 | 103.9 | (4.8 | ) | (4.6 | ) | |||||||||
Used vehicle | 1,193.2 | 1,049.7 | 143.5 | 13.7 | |||||||||||
Finance and insurance, net | 207.6 | 172.4 | 35.2 | 20.4 | |||||||||||
Total variable operations | 4,170.4 | 3,650.7 | 519.7 | 14.2 | |||||||||||
Parts and service | 743.4 | 671.0 | 72.4 | 10.8 | |||||||||||
Other | 30.4 | 41.8 | (11.4 | ) | |||||||||||
Total revenue | $ | 4,944.2 | $ | 4,363.5 | $ | 580.7 | 13.3 | ||||||||
Gross profit: | |||||||||||||||
New vehicle | $ | 161.5 | $ | 145.9 | $ | 15.6 | 10.7 | ||||||||
Retail used vehicle | 102.5 | 92.8 | 9.7 | 10.5 | |||||||||||
Wholesale | 1.2 | 1.5 | (0.3 | ) | |||||||||||
Used vehicle | 103.7 | 94.3 | 9.4 | 10.0 | |||||||||||
Finance and insurance | 207.6 | 172.4 | 35.2 | 20.4 | |||||||||||
Total variable operations | 472.8 | 412.6 | 60.2 | 14.6 | |||||||||||
Parts and service | 320.0 | 286.7 | 33.3 | 11.6 | |||||||||||
Other | 7.1 | 8.1 | (1.0 | ) | |||||||||||
Total gross profit | 799.9 | 707.4 | 92.5 | 13.1 | |||||||||||
Selling, general, and administrative expenses | 557.6 | 500.7 | (56.9 | ) | (11.4 | ) | |||||||||
Depreciation and amortization | 28.7 | 25.6 | (3.1 | ) | |||||||||||
Other income, net | (1.3 | ) | (8.0 | ) | (6.7 | ) | |||||||||
Operating income | 214.9 | 189.1 | 25.8 | 13.6 | |||||||||||
Non-operating income (expense) items: | |||||||||||||||
Floorplan interest expense | (13.2 | ) | (13.2 | ) | — | ||||||||||
Other interest expense | (21.4 | ) | (21.6 | ) | 0.2 | ||||||||||
Interest income | 0.1 | — | 0.1 | ||||||||||||
Other income, net | 1.1 | 1.5 | (0.4 | ) | |||||||||||
Income from continuing operations before income taxes | $ | 181.5 | $ | 155.8 | $ | 25.7 | 16.5 | ||||||||
Retail vehicle unit sales: | |||||||||||||||
New | 78,560 | 71,223 | 7,337 | 10.3 | |||||||||||
Used | 58,624 | 52,136 | 6,488 | 12.4 | |||||||||||
137,184 | 123,359 | 13,825 | 11.2 | ||||||||||||
Revenue per vehicle retailed: | |||||||||||||||
New | $ | 35,255 | $ | 34,099 | $ | 1,156 | 3.4 | ||||||||
Used | $ | 18,663 | $ | 18,141 | $ | 522 | 2.9 | ||||||||
Gross profit per vehicle retailed: | |||||||||||||||
New | $ | 2,056 | $ | 2,048 | $ | 8 | 0.4 | ||||||||
Used | $ | 1,748 | $ | 1,780 | $ | (32 | ) | (1.8 | ) | ||||||
Finance and insurance | $ | 1,513 | $ | 1,398 | $ | 115 | 8.2 | ||||||||
Total variable operations(1) | $ | 3,438 | $ | 3,333 | $ | 105 | 3.2 | ||||||||
(1) Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales. |
Operating Percentages | Three Months Ended March 31, | |||
2015 (%) | 2014 (%) | |||
Revenue mix percentages: | ||||
New vehicle | 56.0 | 55.7 | ||
Used vehicle | 24.1 | 24.1 | ||
Parts and service | 15.0 | 15.4 | ||
Finance and insurance, net | 4.2 | 4.0 | ||
Other | 0.7 | 0.8 | ||
100.0 | 100.0 | |||
Gross profit mix percentages: | ||||
New vehicle | 20.2 | 20.6 | ||
Used vehicle | 13.0 | 13.3 | ||
Parts and service | 40.0 | 40.5 | ||
Finance and insurance | 26.0 | 24.4 | ||
Other | 0.8 | 1.2 | ||
100.0 | 100.0 | |||
Operating items as a percentage of revenue: | ||||
Gross profit: | ||||
New vehicle | 5.8 | 6.0 | ||
Used vehicle - retail | 9.4 | 9.8 | ||
Parts and service | 43.0 | 42.7 | ||
Total | 16.2 | 16.2 | ||
Selling, general and administrative expenses | 11.3 | 11.5 | ||
Operating income | 4.3 | 4.3 | ||
Operating items as a percentage of total gross profit: | ||||
Selling, general and administrative expenses | 69.7 | 70.8 | ||
Operating income | 26.9 | 26.7 |
Segment Operating Highlights | Three Months Ended March 31, | |||||||||||||
2015 | 2014 | $ Variance | % Variance | |||||||||||
Revenue: | ||||||||||||||
Domestic | $ | 1,665.7 | $ | 1,473.0 | $ | 192.7 | 13.1 | |||||||
Import | 1,678.7 | 1,549.4 | 129.3 | 8.3 | ||||||||||
Premium luxury | 1,563.2 | 1,306.4 | 256.8 | 19.7 | ||||||||||
Total | 4,907.6 | 4,328.8 | 578.8 | 13.4 | ||||||||||
Corporate and other | 36.6 | 34.7 | 1.9 | 5.5 | ||||||||||
Total consolidated revenue | $ | 4,944.2 | $ | 4,363.5 | $ | 580.7 | 13.3 | |||||||
*Segment income | ||||||||||||||
Domestic | $ | 79.3 | $ | 63.8 | $ | 15.5 | 24.3 | |||||||
Import | 75.0 | 65.4 | 9.6 | 14.7 | ||||||||||
Premium luxury | 94.1 | 83.3 | 10.8 | 13.0 | ||||||||||
Total | 248.4 | 212.5 | 35.9 | 16.9 | ||||||||||
Corporate and other | (46.7 | ) | (36.6 | ) | (10.1 | ) | ||||||||
Add: Floorplan interest expense | 13.2 | 13.2 | — | |||||||||||
Operating income | $ | 214.9 | $ | 189.1 | $ | 25.8 | 13.6 | |||||||
* Segment income represents income for each of our reportable segments and is defined as operating income less floorplan interest expense | ||||||||||||||
Retail new vehicle unit sales: | ||||||||||||||
Domestic | 25,750 | 23,815 | 1,935 | 8.1 | ||||||||||
Import | 36,914 | 34,925 | 1,989 | 5.7 | ||||||||||
Premium luxury | 15,896 | 12,483 | 3,413 | 27.3 | ||||||||||
78,560 | 71,223 | 7,337 | 10.3 | |||||||||||
Brand Mix - New Vehicle Retail Units Sold | Three Months Ended | |||||||||||||
March 31, | ||||||||||||||
2015 (%) | 2014 (%) | |||||||||||||
Domestic: | ||||||||||||||
Ford, Lincoln | 16.5 | 17.7 | ||||||||||||
Chevrolet, Buick, Cadillac, GMC | 9.8 | 10.0 | ||||||||||||
Chrysler, Jeep, Dodge | 6.5 | 5.7 | ||||||||||||
Domestic total | 32.8 | 33.4 | ||||||||||||
Import: | ||||||||||||||
Honda | 10.9 | 11.4 | ||||||||||||
Toyota | 18.7 | 19.0 | ||||||||||||
Nissan | 10.1 | 11.6 | ||||||||||||
Other imports | 7.3 | 7.1 | ||||||||||||
Import total | 47.0 | 49.1 | ||||||||||||
Premium Luxury: | ||||||||||||||
Mercedes-Benz | 8.1 | 7.5 | ||||||||||||
BMW | 4.9 | 4.6 | ||||||||||||
Lexus | 3.2 | 2.6 | ||||||||||||
Audi | 1.9 | 1.0 | ||||||||||||
Other premium luxury (Land Rover, Porsche) | 2.1 | 1.8 | ||||||||||||
Premium Luxury total | 20.2 | 17.5 | ||||||||||||
100.0 | 100.0 |
Capital Expenditures / Stock Repurchases | Three Months Ended March 31, | ||||||
2015 | 2014 | ||||||
Capital expenditures (1) | $ | 62.9 | $ | 34.9 | |||
Cash paid for acquisitions (2) | $ | 27.7 | $ | — | |||
Proceeds from exercises of stock options | $ | 12.4 | $ | 15.3 | |||
Stock repurchases: | |||||||
Aggregate purchase price | $ | 9.1 | $ | 115.7 | |||
Shares repurchased (in millions) | 0.2 | 2.4 |
Floorplan Assistance and Expense | Three Months Ended March 31, | |||||||||||
2015 | 2014 | Variance | ||||||||||
Floorplan assistance earned (included in cost of sales) | $ | 26.7 | $ | 24.0 | $ | 2.7 | ||||||
New vehicle floorplan interest expense | (12.5 | ) | (12.7 | ) | 0.2 | |||||||
Net new vehicle inventory carrying benefit | $ | 14.2 | $ | 11.3 | $ | 2.9 |
Balance Sheet and Other Highlights | March 31, 2015 | December 31, 2014 | March 31, 2014 | |||||||||
Cash and cash equivalents | $ | 74.1 | $ | 75.4 | $ | 69.2 | ||||||
Inventory | $ | 2,928.4 | $ | 2,899.0 | $ | 2,712.0 | ||||||
Total floorplan notes payable | $ | 3,002.4 | $ | 3,097.2 | $ | 2,844.2 | ||||||
Non-vehicle debt | $ | 2,055.7 | $ | 2,128.4 | $ | 1,803.9 | ||||||
Equity | $ | 2,205.6 | $ | 2,072.1 | $ | 2,068.9 | ||||||
New days supply (industry standard of selling days) | 52 days | 54 days | 61 days | |||||||||
Used days supply (trailing calendar month days) | 34 days | 38 days | 31 days |
Key Credit Agreement Covenant Compliance Calculations | ||
Ratio of funded indebtedness/ | ||
Adjusted EBITDA | 2.15x | |
Covenant | less than or equal to | 3.75x |
Ratio of funded indebtedness including floorplan/ | |||
Total capitalization including floorplan | 57.5 | % | |
Covenant | less than or equal to | 65.0 | % |
Comparable Basis Reconciliations* | Three Months Ended March 31, | |||||||||||||||
Net Income | Diluted Earnings Per Share** | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
As reported | $ | 111.5 | $ | 95.1 | $ | 0.97 | $ | 0.78 | ||||||||
Discontinued operations, net of income taxes | 0.2 | 0.4 | $ | — | $ | — | ||||||||||
From continuing operations, as reported | 111.7 | 95.5 | $ | 0.97 | $ | 0.79 | ||||||||||
Net gain related to business/property dispositions | — | (5.0 | ) | $ | — | $ | (0.04 | ) | ||||||||
Adjusted | $ | 111.7 | $ | 90.5 | $ | 0.97 | $ | 0.75 | ||||||||
* | Please refer to the “Non-GAAP Financial Measures” section of the Press Release. |
** | Diluted earnings per share amounts are calculated discretely and therefore may not add up to the total. |
Operating Highlights | Three Months Ended March 31, | ||||||||||||||
2015 | 2014 | $ Variance | % Variance | ||||||||||||
Revenue: | |||||||||||||||
New vehicle | $ | 2,692.1 | $ | 2,414.9 | $ | 277.2 | 11.5 | ||||||||
Retail used vehicle | 1,060.7 | 939.6 | 121.1 | 12.9 | |||||||||||
Wholesale | 97.3 | 103.6 | (6.3 | ) | (6.1 | ) | |||||||||
Used vehicle | 1,158.0 | 1,043.2 | 114.8 | 11.0 | |||||||||||
Finance and insurance, net | 203.4 | 171.4 | 32.0 | 18.7 | |||||||||||
Total variable operations | 4,053.5 | 3,629.5 | 424.0 | 11.7 | |||||||||||
Parts and service | 722.7 | 666.3 | 56.4 | 8.5 | |||||||||||
Other | 30.4 | 40.8 | (10.4 | ) | |||||||||||
Total revenue | $ | 4,806.6 | $ | 4,336.6 | $ | 470.0 | 10.8 | ||||||||
Gross profit: | |||||||||||||||
New vehicle | $ | 154.2 | $ | 145.1 | $ | 9.1 | 6.3 | ||||||||
Retail used vehicle | 99.7 | 92.0 | 7.7 | 8.4 | |||||||||||
Wholesale | 1.2 | 1.5 | (0.3 | ) | |||||||||||
Used vehicle | 100.9 | 93.5 | 7.4 | 7.9 | |||||||||||
Finance and insurance | 203.4 | 171.4 | 32.0 | 18.7 | |||||||||||
Total variable operations | 458.5 | 410.0 | 48.5 | 11.8 | |||||||||||
Parts and service | 310.1 | 284.6 | 25.5 | 9.0 | |||||||||||
Other | 6.8 | 7.9 | (1.1 | ) | |||||||||||
Total gross profit | $ | 775.4 | $ | 702.5 | $ | 72.9 | 10.4 | ||||||||
Retail vehicle unit sales: | |||||||||||||||
New | 76,919 | 70,676 | 6,243 | 8.8 | |||||||||||
Used | 57,353 | 51,674 | 5,679 | 11.0 | |||||||||||
134,272 | 122,350 | 11,922 | 9.7 | ||||||||||||
Revenue per vehicle retailed: | |||||||||||||||
New | $ | 34,999 | $ | 34,169 | $ | 830 | 2.4 | ||||||||
Used | $ | 18,494 | $ | 18,183 | $ | 311 | 1.7 | ||||||||
Gross profit per vehicle retailed: | |||||||||||||||
New | $ | 2,005 | $ | 2,053 | $ | (48 | ) | (2.3 | ) | ||||||
Used | $ | 1,738 | $ | 1,780 | $ | (42 | ) | (2.4 | ) | ||||||
Finance and insurance | $ | 1,515 | $ | 1,401 | $ | 114 | 8.1 | ||||||||
Total variable operations(1) | $ | 3,406 | $ | 3,339 | $ | 67 | 2.0 | ||||||||
(1) Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales. |
Operating Percentages | Three Months Ended March 31, | |||
2015 (%) | 2014 (%) | |||
Revenue mix percentages: | ||||
New vehicle | 56.0 | 55.7 | ||
Used vehicle | 24.1 | 24.1 | ||
Parts and service | 15.0 | 15.4 | ||
Finance and insurance, net | 4.2 | 4.0 | ||
Other | 0.7 | 0.8 | ||
100.0 | 100.0 | |||
Gross profit mix percentages: | ||||
New vehicle | 19.9 | 20.7 | ||
Used vehicle | 13.0 | 13.3 | ||
Parts and service | 40.0 | 40.5 | ||
Finance and insurance | 26.2 | 24.4 | ||
Other | 0.9 | 1.1 | ||
100.0 | 100.0 | |||
Operating items as a percentage of revenue: | ||||
Gross Profit: | ||||
New vehicle | 5.7 | 6.0 | ||
Used vehicle - retail | 9.4 | 9.8 | ||
Parts and service | 42.9 | 42.7 | ||
Total | 16.1 | 16.2 |
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