Delaware | 1-13107 | 73-1105145 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | 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 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
• | Mr. Liebert will serve as Chief Executive Officer and President of the Company, and his employment period under the agreement will commence on March 11, 2019 and continue until March 10, 2022. |
• | Mr. Liebert’s annual base salary will be $1,000,000, subject to annual review and adjustment by the Compensation Committee (the “Committee”) of the Board, provided that his annual base salary may not be reduced during the employment period. |
• | During the employment period, Mr. Liebert will participate in the Company’s annual bonus plan at such target award levels and upon such terms and conditions as may be established by the Committee, provided that the target award level will be no less than 150% of his then-current annual base salary. |
• | Mr. Liebert will be eligible to receive an annual grant of equity-based awards during the employment period at an appropriate level as determined by the Committee, with a grant date value of no less than $5,000,000. For 2019, Mr. Liebert will be granted, as soon as reasonably practicable following his commencement date, (i) restricted stock units (“RSUs”) subject to a four-year installment vesting schedule with an aggregate grant date fair value of $3,333,330 and (ii) RSUs subject to a three-year cliff vesting schedule with an aggregate grant date fair value of $1,666,670 (clauses (i) and (ii) referred to as the “2019 RSU Awards”). |
• | As soon as reasonably practicable following the commencement date, Mr. Liebert will be granted, in the form of a sign-on award, RSUs subject to a three-year installment vesting schedule with an aggregate grant date fair value of $7,500,000 (the “Sign-On Award”). Mr. Liebert will be required to hold the shares of Company common stock issuable pursuant to the Sign-On Award until the date he is in compliance with the Company’s Executive Stock Ownership Guidelines. |
• | If the Company terminates Mr. Liebert’s employment without “cause” or if he resigns for “good reason” (in each case, as defined in the Employment Agreement), then, provided he is in compliance with all applicable restrictive covenants and he signs a mutually acceptable severance agreement, Mr. Liebert will be entitled to receive: (i) in equal installments over 18 months, 1.5 times the sum of his annual base salary and target annual bonus, and (ii) in a lump sum at the same time bonuses are paid to active employees generally, an amount equal to his annual bonus as determined by the Committee, pro-rated for the number of days he was employed during the applicable calendar year through the applicable termination date. |
Item 7.01 | Regulation FD Disclosure. |
Item 9.01 | Financial Statements and Exhibits. |
10.1 |
99.1 |
99.2 |
AUTONATION, INC. | ||||
Date: | February 22, 2019 | By: | /s/ C. Coleman Edmunds | |
C. Coleman Edmunds | ||||
Executive Vice President, General Counsel and Corporate Secretary |
1. | Employment. |
Contact: Marc Cannon (954) 769-3146 cannonm@autonation.com Robert Quartaro (954) 769-7342 quartaror@autonation.com |
• | EPS from continuing operations was $1.02, and total revenue was $5.4 billion |
• | AutoNation incurred approximately $0.08 per share, or $9 million, in restructuring-related charges during the fourth quarter of 2018 |
• | The tax reform bill positively impacted fourth quarter 2017 net income from continuing operations by $41 million, or $0.45 per share |
• | AutoNation implements corporate and regional restructuring and cost savings plan expected to reduce costs by approximately $50 million annually |
• | Domestic – Domestic segment income(2) was $55 million compared to year-ago segment income of $67 million, a decrease of 18%. |
• | Import – Import segment income(2) was $69 million compared to year-ago segment income of $75 million, a decrease of 9%. |
• | Premium Luxury – Premium Luxury segment income(2) was $91 million compared to year-ago segment income of $106 million, a decrease 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; 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 December 31, | Twelve Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue: | |||||||||||||||
New vehicle | $ | 3,066.6 | $ | 3,345.3 | $ | 11,751.6 | $ | 12,180.8 | |||||||
Used vehicle | 1,212.4 | 1,208.1 | 5,123.3 | 4,878.4 | |||||||||||
Parts and service | 868.0 | 854.1 | 3,447.6 | 3,398.3 | |||||||||||
Finance and insurance, net | 245.4 | 247.2 | 981.4 | 939.2 | |||||||||||
Other | 19.3 | 28.8 | 108.9 | 137.9 | |||||||||||
Total revenue | 5,411.7 | 5,683.5 | 21,412.8 | 21,534.6 | |||||||||||
Cost of sales: | |||||||||||||||
New vehicle | 2,930.4 | 3,184.2 | 11,235.5 | 11,592.4 | |||||||||||
Used vehicle | 1,138.7 | 1,130.1 | 4,781.6 | 4,563.2 | |||||||||||
Parts and service | 476.1 | 479.4 | 1,892.3 | 1,907.6 | |||||||||||
Other | 18.6 | 22.6 | 106.1 | 112.4 | |||||||||||
Total cost of sales | 4,563.8 | 4,816.3 | 18,015.5 | 18,175.6 | |||||||||||
Gross profit | 847.9 | 867.2 | 3,397.3 | 3,359.0 | |||||||||||
Selling, general, and administrative expenses | 631.5 | 622.1 | 2,509.8 | 2,436.2 | |||||||||||
Depreciation and amortization | 42.2 | 40.6 | 166.2 | 158.6 | |||||||||||
Franchise rights impairment | — | — | 8.1 | — | |||||||||||
Other income, net | (23.1 | ) | (24.8 | ) | (64.7 | ) | (79.2 | ) | |||||||
Operating income | 197.3 | 229.3 | 777.9 | 843.4 | |||||||||||
Non-operating income (expense) items: | |||||||||||||||
Floorplan interest expense | (37.0 | ) | (26.3 | ) | (130.4 | ) | (97.0 | ) | |||||||
Other interest expense | (29.0 | ) | (32.2 | ) | (119.4 | ) | (120.2 | ) | |||||||
Interest income | 0.3 | 0.2 | 1.1 | 1.0 | |||||||||||
Other income (loss), net | (3.1 | ) | 2.9 | 0.2 | 9.3 | ||||||||||
Income from continuing operations before income taxes | 128.5 | 173.9 | 529.4 | 636.5 | |||||||||||
Income tax provision | 35.6 | 22.4 | 133.5 | 201.5 | |||||||||||
Net income from continuing operations | 92.9 | 151.5 | 395.9 | 435.0 | |||||||||||
Income (loss) from discontinued operations, net of income taxes | (0.2 | ) | (0.2 | ) | 0.1 | (0.4 | ) | ||||||||
Net income | $ | 92.7 | $ | 151.3 | $ | 396.0 | $ | 434.6 | |||||||
Diluted earnings (loss) per share*: | |||||||||||||||
Continuing operations | $ | 1.02 | $ | 1.64 | $ | 4.34 | $ | 4.43 | |||||||
Discontinued operations | $ | — | $ | — | $ | — | $ | — | |||||||
Net income | $ | 1.02 | $ | 1.64 | $ | 4.34 | $ | 4.43 | |||||||
Weighted average common shares outstanding | 90.7 | 92.3 | 91.3 | 98.2 | |||||||||||
Common shares outstanding, net of treasury stock, at period end | 90.0 | 91.6 | 90.0 | 91.6 |
* | Earnings per share amounts are calculated discretely and therefore may not add up to the total due to rounding. |
Operating Highlights | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||||
2018 | 2017 | $ Variance | % Variance | 2018 | 2017 | $ Variance | % Variance | |||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||
New vehicle | $ | 3,066.6 | $ | 3,345.3 | $ | (278.7 | ) | (8.3 | ) | $ | 11,751.6 | $ | 12,180.8 | $ | (429.2 | ) | (3.5 | ) | ||||||||||||
Retail used vehicle | 1,141.5 | 1,138.4 | 3.1 | 0.3 | 4,807.6 | 4,577.1 | 230.5 | 5.0 | ||||||||||||||||||||||
Wholesale | 70.9 | 69.7 | 1.2 | 1.7 | 315.7 | 301.3 | 14.4 | 4.8 | ||||||||||||||||||||||
Used vehicle | 1,212.4 | 1,208.1 | 4.3 | 0.4 | 5,123.3 | 4,878.4 | 244.9 | 5.0 | ||||||||||||||||||||||
Finance and insurance, net | 245.4 | 247.2 | (1.8 | ) | (0.7 | ) | 981.4 | 939.2 | 42.2 | 4.5 | ||||||||||||||||||||
Total variable operations | 4,524.4 | 4,800.6 | (276.2 | ) | (5.8 | ) | 17,856.3 | 17,998.4 | (142.1 | ) | (0.8 | ) | ||||||||||||||||||
Parts and service | 868.0 | 854.1 | 13.9 | 1.6 | 3,447.6 | 3,398.3 | 49.3 | 1.5 | ||||||||||||||||||||||
Other | 19.3 | 28.8 | (9.5 | ) | 108.9 | 137.9 | (29.0 | ) | ||||||||||||||||||||||
Total revenue | $ | 5,411.7 | $ | 5,683.5 | $ | (271.8 | ) | (4.8 | ) | $ | 21,412.8 | $ | 21,534.6 | $ | (121.8 | ) | (0.6 | ) | ||||||||||||
Gross profit: | ||||||||||||||||||||||||||||||
New vehicle | $ | 136.2 | $ | 161.1 | $ | (24.9 | ) | (15.5 | ) | $ | 516.1 | $ | 588.4 | $ | (72.3 | ) | (12.3 | ) | ||||||||||||
Retail used vehicle | 71.2 | 75.2 | (4.0 | ) | (5.3 | ) | 327.6 | 308.0 | 19.6 | 6.4 | ||||||||||||||||||||
Wholesale | 2.5 | 2.8 | (0.3 | ) | 14.1 | 7.2 | 6.9 | |||||||||||||||||||||||
Used vehicle | 73.7 | 78.0 | (4.3 | ) | (5.5 | ) | 341.7 | 315.2 | 26.5 | 8.4 | ||||||||||||||||||||
Finance and insurance | 245.4 | 247.2 | (1.8 | ) | (0.7 | ) | 981.4 | 939.2 | 42.2 | 4.5 | ||||||||||||||||||||
Total variable operations | 455.3 | 486.3 | (31.0 | ) | (6.4 | ) | 1,839.2 | 1,842.8 | (3.6 | ) | (0.2 | ) | ||||||||||||||||||
Parts and service | 391.9 | 374.7 | 17.2 | 4.6 | 1,555.3 | 1,490.7 | 64.6 | 4.3 | ||||||||||||||||||||||
Other | 0.7 | 6.2 | (5.5 | ) | 2.8 | 25.5 | (22.7 | ) | ||||||||||||||||||||||
Total gross profit | 847.9 | 867.2 | (19.3 | ) | (2.2 | ) | 3,397.3 | 3,359.0 | 38.3 | 1.1 | ||||||||||||||||||||
Selling, general, and administrative expenses | 631.5 | 622.1 | (9.4 | ) | (1.5 | ) | 2,509.8 | 2,436.2 | (73.6 | ) | (3.0 | ) | ||||||||||||||||||
Depreciation and amortization | 42.2 | 40.6 | (1.6 | ) | 166.2 | 158.6 | (7.6 | ) | ||||||||||||||||||||||
Franchise rights impairment | — | — | — | 8.1 | — | (8.1 | ) | |||||||||||||||||||||||
Other income, net | (23.1 | ) | (24.8 | ) | (1.7 | ) | (64.7 | ) | (79.2 | ) | (14.5 | ) | ||||||||||||||||||
Operating income | 197.3 | 229.3 | (32.0 | ) | (14.0 | ) | 777.9 | 843.4 | (65.5 | ) | (7.8 | ) | ||||||||||||||||||
Non-operating income (expense) items: | ||||||||||||||||||||||||||||||
Floorplan interest expense | (37.0 | ) | (26.3 | ) | (10.7 | ) | (130.4 | ) | (97.0 | ) | (33.4 | ) | ||||||||||||||||||
Other interest expense | (29.0 | ) | (32.2 | ) | 3.2 | (119.4 | ) | (120.2 | ) | 0.8 | ||||||||||||||||||||
Interest income | 0.3 | 0.2 | 0.1 | 1.1 | 1.0 | 0.1 | ||||||||||||||||||||||||
Other income (loss), net | (3.1 | ) | 2.9 | (6.0 | ) | 0.2 | 9.3 | (9.1 | ) | |||||||||||||||||||||
Income from continuing operations before income taxes | $ | 128.5 | $ | 173.9 | $ | (45.4 | ) | (26.1 | ) | $ | 529.4 | $ | 636.5 | $ | (107.1 | ) | (16.8 | ) | ||||||||||||
Retail vehicle unit sales: | ||||||||||||||||||||||||||||||
New | 78,370 | 87,234 | (8,864 | ) | (10.2 | ) | 310,839 | 329,116 | (18,277 | ) | (5.6 | ) | ||||||||||||||||||
Used | 54,985 | 55,944 | (959 | ) | (1.7 | ) | 237,722 | 234,148 | 3,574 | 1.5 | ||||||||||||||||||||
133,355 | 143,178 | (9,823 | ) | (6.9 | ) | 548,561 | 563,264 | (14,703 | ) | (2.6 | ) | |||||||||||||||||||
Revenue per vehicle retailed: | ||||||||||||||||||||||||||||||
New | $ | 39,130 | $ | 38,349 | $ | 781 | 2.0 | $ | 37,806 | $ | 37,011 | $ | 795 | 2.1 | ||||||||||||||||
Used | $ | 20,760 | $ | 20,349 | $ | 411 | 2.0 | $ | 20,224 | $ | 19,548 | $ | 676 | 3.5 | ||||||||||||||||
Gross profit per vehicle retailed: | ||||||||||||||||||||||||||||||
New | $ | 1,738 | $ | 1,847 | $ | (109 | ) | (5.9 | ) | $ | 1,660 | $ | 1,788 | $ | (128 | ) | (7.2 | ) | ||||||||||||
Used | $ | 1,295 | $ | 1,344 | $ | (49 | ) | (3.6 | ) | $ | 1,378 | $ | 1,315 | $ | 63 | 4.8 | ||||||||||||||
Finance and insurance | $ | 1,840 | $ | 1,727 | $ | 113 | 6.5 | $ | 1,789 | $ | 1,667 | $ | 122 | 7.3 | ||||||||||||||||
Total variable operations(1) | $ | 3,395 | $ | 3,377 | $ | 18 | 0.5 | $ | 3,327 | $ | 3,259 | $ | 68 | 2.1 | ||||||||||||||||
(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 December 31, | Twelve Months Ended December 31, | ||||||
2018 (%) | 2017 (%) | 2018 (%) | 2017 (%) | |||||
Revenue mix percentages: | ||||||||
New vehicle | 56.7 | 58.9 | 54.9 | 56.6 | ||||
Used vehicle | 22.4 | 21.3 | 23.9 | 22.7 | ||||
Parts and service | 16.0 | 15.0 | 16.1 | 15.8 | ||||
Finance and insurance, net | 4.5 | 4.3 | 4.6 | 4.4 | ||||
Other | 0.4 | 0.5 | 0.5 | 0.5 | ||||
100.0 | 100.0 | 100.0 | 100.0 | |||||
Gross profit mix percentages: | ||||||||
New vehicle | 16.1 | 18.6 | 15.2 | 17.5 | ||||
Used vehicle | 8.7 | 9.0 | 10.1 | 9.4 | ||||
Parts and service | 46.2 | 43.2 | 45.8 | 44.4 | ||||
Finance and insurance | 28.9 | 28.5 | 28.9 | 28.0 | ||||
Other | 0.1 | 0.7 | — | 0.7 | ||||
100.0 | 100.0 | 100.0 | 100.0 | |||||
Operating items as a percentage of revenue: | ||||||||
Gross profit: | ||||||||
New vehicle | 4.4 | 4.8 | 4.4 | 4.8 | ||||
Used vehicle - retail | 6.2 | 6.6 | 6.8 | 6.7 | ||||
Parts and service | 45.1 | 43.9 | 45.1 | 43.9 | ||||
Total | 15.7 | 15.3 | 15.9 | 15.6 | ||||
Selling, general, and administrative expenses | 11.7 | 10.9 | 11.7 | 11.3 | ||||
Operating income | 3.6 | 4.0 | 3.6 | 3.9 | ||||
Operating items as a percentage of total gross profit: | ||||||||
Selling, general, and administrative expenses | 74.5 | 71.7 | 73.9 | 72.5 | ||||
Operating income | 23.3 | 26.4 | 22.9 | 25.1 |
Segment Operating Highlights | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||||
2018 | 2017 | $ Variance | % Variance | 2018 | 2017 | $ Variance | % Variance | |||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||
Domestic | $ | 1,745.0 | $ | 1,895.1 | $ | (150.1 | ) | (7.9 | ) | $ | 7,134.5 | $ | 7,452.8 | $ | (318.3 | ) | (4.3 | ) | ||||||||||||
Import | 1,646.2 | 1,749.9 | (103.7 | ) | (5.9 | ) | 6,786.4 | 6,873.4 | (87.0 | ) | (1.3 | ) | ||||||||||||||||||
Premium luxury | 1,894.1 | 1,937.8 | (43.7 | ) | (2.3 | ) | 7,010.9 | 6,832.7 | 178.2 | 2.6 | ||||||||||||||||||||
Total | 5,285.3 | 5,582.8 | (297.5 | ) | (5.3 | ) | 20,931.8 | 21,158.9 | (227.1 | ) | (1.1 | ) | ||||||||||||||||||
Corporate and other | 126.4 | 100.7 | 25.7 | 25.5 | 481.0 | 375.7 | 105.3 | 28.0 | ||||||||||||||||||||||
Total consolidated revenue | $ | 5,411.7 | $ | 5,683.5 | $ | (271.8 | ) | (4.8 | ) | $ | 21,412.8 | $ | 21,534.6 | $ | (121.8 | ) | (0.6 | ) | ||||||||||||
Segment income*: | ||||||||||||||||||||||||||||||
Domestic | $ | 54.7 | $ | 66.6 | $ | (11.9 | ) | (17.9 | ) | $ | 249.3 | $ | 257.1 | $ | (7.8 | ) | (3.0 | ) | ||||||||||||
Import | 68.5 | 75.2 | (6.7 | ) | (8.9 | ) | 304.7 | 303.1 | 1.6 | 0.5 | ||||||||||||||||||||
Premium luxury | 91.4 | 105.5 | (14.1 | ) | (13.4 | ) | 340.9 | 348.8 | (7.9 | ) | (2.3 | ) | ||||||||||||||||||
Total | 214.6 | 247.3 | (32.7 | ) | (13.2 | ) | 894.9 | 909.0 | (14.1 | ) | (1.6 | ) | ||||||||||||||||||
Corporate and other | (54.3 | ) | (44.3 | ) | (10.0 | ) | (247.4 | ) | (162.6 | ) | (84.8 | ) | ||||||||||||||||||
Add: Floorplan interest expense | 37.0 | 26.3 | 10.7 | 130.4 | 97.0 | 33.4 | ||||||||||||||||||||||||
Operating income | $ | 197.3 | $ | 229.3 | $ | (32.0 | ) | (14.0 | ) | $ | 777.9 | $ | 843.4 | $ | (65.5 | ) | (7.8 | ) | ||||||||||||
* 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 | 25,144 | 28,263 | (3,119 | ) | (11.0 | ) | 102,015 | 111,028 | (9,013 | ) | (8.1 | ) | ||||||||||||||||||
Import | 34,780 | 38,641 | (3,861 | ) | (10.0 | ) | 142,556 | 150,422 | (7,866 | ) | (5.2 | ) | ||||||||||||||||||
Premium luxury | 18,446 | 20,330 | (1,884 | ) | (9.3 | ) | 66,268 | 67,666 | (1,398 | ) | (2.1 | ) | ||||||||||||||||||
78,370 | 87,234 | (8,864 | ) | (10.2 | ) | 310,839 | 329,116 | (18,277 | ) | (5.6 | ) | |||||||||||||||||||
Brand Mix - Retail New Vehicle Units Sold | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||||
2018 (%) | 2017 (%) | 2018 (%) | 2017 (%) | |||||||||||||||||||||||||||
Domestic: | ||||||||||||||||||||||||||||||
Ford, Lincoln | 11.5 | 13.0 | 12.2 | 13.6 | ||||||||||||||||||||||||||
Chevrolet, Buick, Cadillac, GMC | 11.4 | 11.1 | 11.1 | 10.7 | ||||||||||||||||||||||||||
Chrysler, Dodge, Jeep, Ram | 9.2 | 8.3 | 9.5 | 9.4 | ||||||||||||||||||||||||||
Domestic total | 32.1 | 32.4 | 32.8 | 33.7 | ||||||||||||||||||||||||||
Import: | ||||||||||||||||||||||||||||||
Toyota | 19.0 | 17.9 | 19.4 | 18.6 | ||||||||||||||||||||||||||
Honda | 13.1 | 12.9 | 13.7 | 13.1 | ||||||||||||||||||||||||||
Nissan | 4.5 | 6.6 | 5.3 | 6.8 | ||||||||||||||||||||||||||
Other Import | 7.8 | 6.9 | 7.5 | 7.2 | ||||||||||||||||||||||||||
Import total | 44.4 | 44.3 | 45.9 | 45.7 | ||||||||||||||||||||||||||
Premium Luxury: | ||||||||||||||||||||||||||||||
Mercedes-Benz | 8.8 | 9.5 | 8.0 | 8.1 | ||||||||||||||||||||||||||
BMW | 6.2 | 5.4 | 5.2 | 4.7 | ||||||||||||||||||||||||||
Lexus | 2.5 | 2.7 | 2.3 | 2.6 | ||||||||||||||||||||||||||
Audi | 2.2 | 2.6 | 2.3 | 2.4 | ||||||||||||||||||||||||||
Jaguar Land Rover | 2.2 | 1.7 | 2.0 | 1.6 | ||||||||||||||||||||||||||
Other Premium Luxury | 1.6 | 1.4 | 1.5 | 1.2 | ||||||||||||||||||||||||||
Premium Luxury total | 23.5 | 23.3 | 21.3 | 20.6 | ||||||||||||||||||||||||||
100.0 | 100.0 | 100.0 | 100.0 |
Capital Expenditures / Stock Repurchases | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Capital expenditures (1) | $ | 122.0 | $ | 108.3 | $ | 393.6 | $ | 332.9 | ||||||||
Cash paid (received) for acquisitions, net of cash acquired (2) | $ | (0.7 | ) | $ | 20.0 | $ | 67.2 | $ | 76.8 | |||||||
Proceeds from exercises of stock options | $ | 1.8 | $ | 15.0 | $ | 17.8 | $ | 39.7 | ||||||||
Stock repurchases: | ||||||||||||||||
Aggregate purchase price | $ | — | $ | — | $ | 100.0 | $ | 434.9 | ||||||||
Shares repurchased (in millions) | — | — | 2.1 | 10.1 |
Floorplan Assistance and Expense | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||
2018 | 2017 | Variance | 2018 | 2017 | Variance | |||||||||||||||||||
Floorplan assistance earned (included in cost of sales) | $ | 30.7 | $ | 33.4 | $ | (2.7 | ) | $ | 117.9 | $ | 122.1 | $ | (4.2 | ) | ||||||||||
New vehicle floorplan interest expense | (34.5 | ) | (24.1 | ) | (10.4 | ) | (121.7 | ) | (90.4 | ) | (31.3 | ) | ||||||||||||
Net new vehicle inventory carrying benefit (cost) | $ | (3.8 | ) | $ | 9.3 | $ | (13.1 | ) | $ | (3.8 | ) | $ | 31.7 | $ | (35.5 | ) |
Balance Sheet and Other Highlights | December 31, 2018 | December 31, 2017 | ||||||
Cash and cash equivalents | $ | 48.6 | $ | 69.2 | ||||
Inventory | $ | 3,650.5 | $ | 3,365.6 | ||||
Total floorplan notes payable | $ | 3,997.7 | $ | 3,806.9 | ||||
Non-vehicle debt | $ | 2,600.5 | $ | 2,703.7 | ||||
Equity | $ | 2,716.0 | $ | 2,369.3 | ||||
New days supply (industry standard of selling days) | 60 days | 53 days | ||||||
Used days supply (trailing calendar month days) | 42 days | 43 days |
Key Credit Agreement Covenant Compliance Calculations (3) | |||
Leverage ratio | 3.06 | x | |
Covenant | less than or equal to | 3.75 | x |
Capitalization ratio | 60.6 | % | |
Covenant | less than or equal to | 70.0 | % |
(1) | Includes accrued construction in progress and excludes property associated with capital leases entered into during the period. |
(2) | Excludes capital leases and deferred purchase price commitments. |
(3) | Calculated in accordance with our credit agreement as filed with the SEC. |
Operating Highlights | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||||
2018 | 2017 | $ Variance | % Variance | 2018 | 2017 | $ Variance | % Variance | |||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||
New vehicle | $ | 3,023.1 | $ | 3,250.5 | $ | (227.4 | ) | (7.0 | ) | $ | 11,519.8 | $ | 11,761.3 | $ | (241.5 | ) | (2.1 | ) | ||||||||||||
Retail used vehicle | 1,111.7 | 1,103.1 | 8.6 | 0.8 | 4,649.6 | 4,397.8 | 251.8 | 5.7 | ||||||||||||||||||||||
Wholesale | 68.9 | 67.0 | 1.9 | 2.8 | 302.0 | 288.9 | 13.1 | 4.5 | ||||||||||||||||||||||
Used vehicle | 1,180.6 | 1,170.1 | 10.5 | 0.9 | 4,951.6 | 4,686.7 | 264.9 | 5.7 | ||||||||||||||||||||||
Finance and insurance, net | 242.5 | 241.4 | 1.1 | 0.5 | 964.4 | 911.7 | 52.7 | 5.8 | ||||||||||||||||||||||
Total variable operations | 4,446.2 | 4,662.0 | (215.8 | ) | (4.6 | ) | 17,435.8 | 17,359.7 | 76.1 | 0.4 | ||||||||||||||||||||
Parts and service | 847.3 | 831.7 | 15.6 | 1.9 | 3,354.9 | 3,288.7 | 66.2 | 2.0 | ||||||||||||||||||||||
Other | 19.3 | 28.4 | (9.1 | ) | 108.7 | 136.9 | (28.2 | ) | ||||||||||||||||||||||
Total revenue | $ | 5,312.8 | $ | 5,522.1 | $ | (209.3 | ) | (3.8 | ) | $ | 20,899.4 | $ | 20,785.3 | $ | 114.1 | 0.5 | ||||||||||||||
Gross profit: | ||||||||||||||||||||||||||||||
New vehicle | $ | 134.4 | $ | 158.2 | $ | (23.8 | ) | (15.0 | ) | $ | 506.5 | $ | 573.4 | $ | (66.9 | ) | (11.7 | ) | ||||||||||||
Retail used vehicle | 69.8 | 73.1 | (3.3 | ) | (4.5 | ) | 319.5 | 296.7 | 22.8 | 7.7 | ||||||||||||||||||||
Wholesale | 2.0 | 2.9 | (0.9 | ) | 8.1 | 7.6 | 0.5 | |||||||||||||||||||||||
Used vehicle | 71.8 | 76.0 | (4.2 | ) | (5.5 | ) | 327.6 | 304.3 | 23.3 | 7.7 | ||||||||||||||||||||
Finance and insurance | 242.5 | 241.4 | 1.1 | 0.5 | 964.4 | 911.7 | 52.7 | 5.8 | ||||||||||||||||||||||
Total variable operations | 448.7 | 475.6 | (26.9 | ) | (5.7 | ) | 1,798.5 | 1,789.4 | 9.1 | 0.5 | ||||||||||||||||||||
Parts and service | 382.8 | 364.5 | 18.3 | 5.0 | 1,513.3 | 1,441.9 | 71.4 | 5.0 | ||||||||||||||||||||||
Other | 0.7 | 6.1 | (5.4 | ) | 2.8 | 25.3 | (22.5 | ) | ||||||||||||||||||||||
Total gross profit | $ | 832.2 | $ | 846.2 | $ | (14.0 | ) | (1.7 | ) | $ | 3,314.6 | $ | 3,256.6 | $ | 58.0 | 1.8 | ||||||||||||||
Retail vehicle unit sales: | ||||||||||||||||||||||||||||||
New | 77,511 | 84,655 | (7,144 | ) | (8.4 | ) | 305,615 | 316,914 | (11,299 | ) | (3.6 | ) | ||||||||||||||||||
Used | 53,496 | 54,019 | (523 | ) | (1.0 | ) | 229,379 | 223,559 | 5,820 | 2.6 | ||||||||||||||||||||
131,007 | 138,674 | (7,667 | ) | (5.5 | ) | 534,994 | 540,473 | (5,479 | ) | (1.0 | ) | |||||||||||||||||||
Revenue per vehicle retailed: | ||||||||||||||||||||||||||||||
New | $ | 39,002 | $ | 38,397 | $ | 605 | 1.6 | $ | 37,694 | $ | 37,112 | $ | 582 | 1.6 | ||||||||||||||||
Used | $ | 20,781 | $ | 20,421 | $ | 360 | 1.8 | $ | 20,270 | $ | 19,672 | $ | 598 | 3.0 | ||||||||||||||||
Gross profit per vehicle retailed: | ||||||||||||||||||||||||||||||
New | $ | 1,734 | $ | 1,869 | $ | (135 | ) | (7.2 | ) | $ | 1,657 | $ | 1,809 | $ | (152 | ) | (8.4 | ) | ||||||||||||
Used | $ | 1,305 | $ | 1,353 | $ | (48 | ) | (3.5 | ) | $ | 1,393 | $ | 1,327 | $ | 66 | 5.0 | ||||||||||||||
Finance and insurance | $ | 1,851 | $ | 1,741 | $ | 110 | 6.3 | $ | 1,803 | $ | 1,687 | $ | 116 | 6.9 | ||||||||||||||||
Total variable operations(1) | $ | 3,410 | $ | 3,409 | $ | 1 | — | $ | 3,347 | $ | 3,297 | $ | 50 | 1.5 | ||||||||||||||||
(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 December 31, | Twelve Months Ended December 31, | ||||||
2018 (%) | 2017 (%) | 2018 (%) | 2017 (%) | |||||
Revenue mix percentages: | ||||||||
New vehicle | 56.9 | 58.9 | 55.1 | 56.6 | ||||
Used vehicle | 22.2 | 21.2 | 23.7 | 22.5 | ||||
Parts and service | 15.9 | 15.1 | 16.1 | 15.8 | ||||
Finance and insurance, net | 4.6 | 4.4 | 4.6 | 4.4 | ||||
Other | 0.4 | 0.4 | 0.5 | 0.7 | ||||
100.0 | 100.0 | 100.0 | 100.0 | |||||
Gross profit mix percentages: | ||||||||
New vehicle | 16.1 | 18.7 | 15.3 | 17.6 | ||||
Used vehicle | 8.6 | 9.0 | 9.9 | 9.3 | ||||
Parts and service | 46.0 | 43.1 | 45.7 | 44.3 | ||||
Finance and insurance | 29.1 | 28.5 | 29.1 | 28.0 | ||||
Other | 0.2 | 0.7 | — | 0.8 | ||||
100.0 | 100.0 | 100.0 | 100.0 | |||||
Operating items as a percentage of revenue: | ||||||||
Gross profit: | ||||||||
New vehicle | 4.4 | 4.9 | 4.4 | 4.9 | ||||
Used vehicle - retail | 6.3 | 6.6 | 6.9 | 6.7 | ||||
Parts and service | 45.2 | 43.8 | 45.1 | 43.8 | ||||
Total | 15.7 | 15.3 | 15.9 | 15.7 |
Contact: Marc Cannon (954) 769-3146 cannonm@autonation.com Robert Quartaro (954) 769-7342 quartaror@autonation.com |