(Source: PRNewswire-FirstCall)
FORT LAUDERDALE, Fla., July 31 /PRNewswire-FirstCall/ -- AutoNation, Inc. , America's largest automotive retailer, today reported 2009 second quarter net income from continuing operations of $55 million or $0.31 per share, compared to year-ago net income from continuing operations of $56 million or $0.31 per share. After adjusting for certain items disclosed in the attached financial tables, net income from continuing operations for the 2009 second quarter was $51 million or $0.29 per share, compared to $59 million or $0.33 per share in the prior year.
Second quarter 2009 revenue totaled $2.6 billion, compared to $3.7 billion in the year-ago period. The decrease was driven primarily by lower new vehicle sales. In the second quarter, total U.S. industry retail new vehicle sales declined 40% compared to last year, based on CNW Research data. In comparison, in the second quarter AutoNation's new vehicle unit sales declined 38%.
Commenting on the second quarter, Mike Jackson, Chairman and Chief Executive Officer, said, "Despite extraordinarily difficult industry conditions, AutoNation delivered solid profitability, driven by cost reduction, lower interest expense, and our disciplined operating model and inventory management. The second quarter was a pivotal moment for the automotive industry. Long-awaited volume stabilization, the successful government-led restructuring of General Motors and Chrysler, and significant dealer consolidations were accomplished. The industry is now positioned for a healthy rebound when macroeconomic conditions, particularly consumer credit, improved." Mr. Jackson also noted, "Our continued disciplined inventories led to a year-over-year improvement in gross profit per vehicle retailed and lower floor plan expense."
Mike Jackson added, "The stabilization of the SAAR in the second quarter is the first step to a gradual recovery and marks the first time since the end of 2007 that we did not see a significant sequential decline in industry new vehicle sales. We also expect the 'Cash for Clunkers' program to stimulate new vehicle sales. Going forward, we expect a gradual improvement of new vehicle sales beginning in the second half of 2009 and intend to increase our inventory of vehicles in a disciplined manner to meet demand. Having weathered the storm, AutoNation remains in an excellent position to capitalize on dealer consolidation and the gradual recovery in industry volumes. We will continue to benefit from our $200 million structural cost reduction program."
At the end of the second quarter, AutoNation had nearly $450 million in liquidity, including cash of $129 million and remained well within the limits of the financial covenants in our debt agreements.
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 Chrysler; the Import segment is comprised of stores that sell vehicles manufactured primarily by Toyota, Honda, and Nissan; and the Premium Luxury segment is comprised of stores that sell vehicles manufactured primarily by Mercedes, BMW, and Lexus.
-- Domestic -- Domestic segment income for the second quarter of 2009 was $26 million compared to year-ago segment income of $33 million. Second quarter Domestic retail new vehicle unit sales declined 34%. -- Import -- Import segment income for the second quarter of 2009 was $42 million compared to year-ago segment income of $57 million. Second quarter Import retail new vehicle unit sales declined 41%. -- Premium Luxury -- Premium Luxury segment income for the second quarter of 2009 was $43 million compared to year-ago segment income of $52 million. Second quarter Premium Luxury retail new vehicle unit sales declined 34%.
For the six-month period ended June 30, 2009, the Company reported net income from continuing operations of $108 million or $0.61 per share compared to $111 million or $0.62 per share in the prior year. After adjusting for certain items as disclosed in the attached financial tables, net income from continuing operations for the six-month period ended June 30, 2009 was $91 million or $0.51 per share, compared to $114 million or $0.63 per share. The Company's revenue for the six-month period ended June 30, 2009 totaled $5.0 billion, down 32% compared to $7.4 billion in the prior year.
The second quarter conference call may be accessed at 10:00 a.m. Eastern Time on July 31, 2009 by phone at 888-769-8515 (pass code: AutoNation) or via the Internet (audio webcast) at http://www.autonation.com/ by clicking on the "Investors Relations" link then clicking "Webcasts." A playback of the conference call will be available after 12:00 (noon) p.m. Eastern Time July 31, 2009 through August 7, 2009 by calling 866-395-4250 (pass code: 75300).
About AutoNation, Inc.
AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's largest automotive retailer and has been named America's Most Admired Automotive Retailer by FORTUNE Magazine in five of the last seven years. A component of the Standard and Poor's 500 Index, AutoNation owns and operates 264 new vehicle franchises in 15 states. For additional information, please visit http://corp.autonation.com/ or http://www.autonation.com/, where more than 70,000 vehicles are available for sale along with AutoNation's E-Vehicle program.
FORWARD LOOKING STATEMENTS
Certain statements and information included in this release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. Additional discussion of factors that could cause actual results to differ materially from management's projections, estimates and expectations is contained in the Company's SEC filings. The Company undertakes no duty to update its forward-looking statements.
NON-GAAP FINANCIAL MEASURES
The attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as net income and diluted earnings per share from continuing operations, adjusted in each case to exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company's disclosure, provides 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 improves the period-to-period comparability of the Company's results from its core business operations.
AUTONATION, INC. UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS ($ in millions, except per share data) Three Months Six Months Ended Ended June 30, June 30, 2009 2008 2009 2008 ---- ---- ---- ---- Revenue: New vehicle $1,339.1 $2,062.0 $2,524.5 $4,133.7 Used vehicle 632.6 868.6 1,224.8 1,771.6 Parts and service 537.4 588.2 1,075.3 1,191.9 Finance and insurance, net 89.0 128.4 166.0 265.0 Other 11.5 16.4 24.9 32.9 ---- ---- ---- ---- Total revenue 2,609.6 3,663.6 5,015.5 7,395.1 ------- ------- ------- ------- Cost of sales: New vehicle 1,252.8 1,925.6 2,364.3 3,858.9 Used vehicle 574.3 793.3 1,102.8 1,618.2 Parts and service 301.5 330.9 603.0 671.9 Other 4.5 7.4 10.6 14.6 --- --- ---- ---- Total cost of sales 2,133.1 3,057.2 4,080.7 6,163.6 ------- ------- ------- ------- Gross profit 476.5 606.4 934.8 1,231.5 Selling, general and administrative expenses 364.1 451.4 717.6 910.8 Depreciation and amortization 19.1 20.8 39.0 42.7 Franchise rights impairment 1.5 - 1.5 - Other expenses (income), net (10.5) 0.1 (21.3) 0.4 ----- --- ----- --- Operating income 102.3 134.1 198.0 277.6 Floorplan interest expense (9.3) (19.7) (19.1) (42.5) Other interest expense (10.5) (21.6) (22.3) (48.4) Gain on senior note repurchases 0.6 - 12.5 - Interest income 0.3 0.3 0.6 0.8 Other losses, net 3.5 1.0 1.8 (0.7) --- --- --- ---- Income from continuing operations before income taxes 86.9 94.1 171.5 186.8 Income tax provision 32.1 38.6 63.7 76.2 ---- ---- ---- ---- Net income from continuing operations 54.8 55.5 107.8 110.6 Loss from discontinued operations, net of income taxes (18.1) (3.7) (36.5) (8.1) ----- ---- ----- ---- Net income $36.7 $51.8 $71.3 $102.5 ===== ===== ===== ====== Diluted earnings (loss) per share: Continuing operations $0.31 $0.31 $0.61 $0.62 Discontinued operations $(0.10) $(0.02) $(0.21) $(0.05) Net income $0.21 $0.29 $0.40 $0.57 Weighted average common shares outstanding 178.8 178.7 178.0 179.6 Common shares outstanding, net of treasury stock, at June 30 178.0 176.7 178.0 176.7 AUTONATION, INC.
