BLOOMFIELD HILLS, MI—February 15, 2012: Penske Automotive Group, Inc. , an international automotive retailer, announced today that fourth quarter 2011 income from continuing operations attributable to common shareholders increased 22% to $42.5 million and related earnings per share increased 24% to $0.47 per share. This compares to income from continuing operations attributable to common shareholders of $34.9 million, or $0.38 per share in the same period last year.
Total revenue increased by 10.8%, to $3.0 billion, driven largely by an increase in total retail unit sales of 10.6%. The increase in retail unit sales was highlighted by a 20.0% increase in used retail unit sales, which drove the Company's used-to-new ratio to 0.82 to 1. Same-store retail revenue increased 5.9% in the fourth quarter. Total gross profit for the Company improved 9.3% to $455.8 million and operating income increased 16.1% to $76.6 million.
Highlights of the Fourth Quarter
-
Total retail unit sales increased 10.6% to 71,453
- +14.1% in the United States; +2.6% Internationally
- New unit retail sales +4.0%
- Used unit retail sales +20.0%
-
Same-store retail revenue increased 5.9%
- New +2.7%; Used +14.1%; Finance & Insurance +11.4%; Service and Parts +0.7%
- +9.3% in the United States; (0.1%) Internationally
-
Average Transaction Price Per Unit
- New $38,816, +4.4%
- Used $26,034, (1.3%)
-
Average Gross Profit Per Unit
- New $3,251, +2.8%; Gross Margin 8.4%
- Used $1,852, (2.6%); Gross Margin 7.1%
- Finance & Insurance $965, +3.8%
-
Inventory Days' Supply
- New 49 days; Used 52 days
Chairman Roger Penske said, "Our fourth quarter results continue to demonstrate the strength of the automotive retail model and the benefit from our premium/luxury brand mix in both the U.S. and international markets. We produced another outstanding quarter of profitability while generating same-store revenue increases in each area of our business. I am extremely pleased with the continued strong performance of our used vehicle business, which increased same-store retail unit sales by 16% and same-store retail revenue by 14%, and our service and parts operations gross margin which added 120 basis points to 57.3%."
For the year ended December 31, 2011, total revenue increased 11.9% to $11.6 billion. Income from continuing operations attributable to common shareholders was an all-time company record, increasing 41.7% to $175.1 million and related earnings per share increased 43.3% to $1.92. This compares to income from continuing operations attributable to common shareholders of $123.6 million, and related earnings per share of $1.34 per share in the same period last year. During 2011, the Company recognized a net income tax benefit of $11.0 million, or $0.12 per share, reflecting a positive adjustment from the resolution of certain tax items in the U.K. of $17.0 million, or $0.19 per share, partially offset by a reduction in deferred tax assets of $6.0 million, or $0.07 per share. After adjusting for these items, adjusted income from continuing operations attributable to common shareholders was $164.0 million, or $1.80 per share, representing an increase of 34.3% on a per share basis compared to last year.
Penske added, "The performance of our business in 2011 exceeded our expectations. We completed the most profitable year in the history of our Company, generating a same-store retail revenue increase of 8.2% and $344 million in EBITDA. Further, we continued to grow the business through opportunistic acquisitions of approximately $1 billion in estimated annualized revenue, which includes the January 2012 Agnew Group acquisition in the U.K. We also discontinued non-strategic dealerships during 2011 with annualized revenues of approximately $300 million. These acquisitions, coupled with the continued recovery in the retail automotive market, are expected to drive our business to higher levels in 2012."
Securities Repurchase Activity
For the year ended December 31, 2011, the Company acquired 2,449,768 shares of its common stock for an aggregate purchase price of $44.3 million, or an average price of $18.07 per share. The Company currently has remaining authorization from its Board of Directors to repurchase up to $106.8 million of its outstanding common stock, debt or convertible 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 fourth quarter of 2011 on February 15, 2012, at 2:00 p.m. Eastern Standard Time. To listen to the conference call, participants must dial (800) 288-8974 [International, please dial (612) 332-0530]. The call will also be simultaneously broadcast over the Internet through the Investors Relations section of the Penske Automotive Group website at Penske Automotive.
About Penske Automotive
Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 332 retail automotive franchises, representing 42 different brands and 29 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 166 franchises in 17 states and Puerto Rico and 166 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 16,000 employees.
Non-GAAP Financial Measures
Find a vehicle: Penske Cars
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| PENSKE AUTOMOTIVE GROUP, INC. | ||||||||||||||||
| Consolidated Condensed Statements of Income | ||||||||||||||||
| (Amounts In Thousands, Except Per Share Data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues: | ||||||||||||||||
| New Vehicle | $ | 1,524,309 | $ | 1,404,398 | $ | 5,811,084 | $ | 5,276,371 | ||||||||
| Used Vehicle | 837,857 | 707,809 | 3,399,981 | 2,857,922 | ||||||||||||
| Finance and Insurance, Net | 68,940 | 60,033 | 278,027 | 244,687 | ||||||||||||
| Service and Parts | 349,214 | 331,452 | 1,394,990 | 1,301,811 | ||||||||||||
| Fleet and Wholesale Vehicle | 178,797 | 166,612 | 672,150 | 647,594 | ||||||||||||
| Total Revenues | 2,959,117 | 2,670,304 | 11,556,232 | $ | 10,328,385 | |||||||||||
| Cost of Sales: | ||||||||||||||||
| New Vehicle | 1,396,639 | 1,285,004 | 5,328,053 | 4,841,556 | ||||||||||||
| Used Vehicle | 778,262 | 656,803 | 3,136,474 | 2,637,356 | ||||||||||||
| Service and Parts | 149,153 | 145,591 | 599,651 | 564,494 | ||||||||||||
| Fleet and Wholesale Vehicle | 179,243 | 165,978 | 666,664 | 640,864 | ||||||||||||
| Total Cost of Sales | 2,503,297 | 2,253,376 | 9,730,842 | $ | 8,684,270 | |||||||||||
| Gross Profit | 455,820 | 416,928 | 1,825,390 | 1,644,115 | ||||||||||||
| SG&A Expenses | 366,676 | 339,587 | 1,478,297 | 1,339,125 | ||||||||||||
| Depreciation | 12,588 | 11,379 | 48,903 | 46,253 | ||||||||||||
| Operating Income | 76,556 | 65,962 | 298,190 | 258,737 | ||||||||||||
| Floor Plan Interest Expense | (7,398 | ) | (8,832 | ) | (28,515 | ) | (33,779 | ) | ||||||||
| Other Interest Expense | (11,833 | ) | (11,751 | ) | (45,020 | ) | (49,176 | ) | ||||||||
| Debt Discount Amortization | - | (1,647 | ) | (1,718 | ) | (8,637 | ) | |||||||||
| Equity in Earnings of Affiliates | 7,924 | 8,844 | 25,451 | 20,569 | ||||||||||||
| Other Income | - | - | - | 1,634 | ||||||||||||
| Income from Continuing Operations Before Income Taxes | 65,249 | 52,576 | 248,388 | 189,348 | ||||||||||||
| Income Taxes | (22,287 | ) | (17,131 | ) |
|
(71,933 | ) | (64,732 | ) | |||||||
| Income from Continuing Operations | 42,962 | 35,445 | 176,455 | 124,616 | ||||||||||||
| Income (Loss) from Discontinued Operations, Net of Tax | 5,195 | (6,374 | ) | 1,803 | (15,269 | ) | ||||||||||
| Net Income | 48,157 | 29,071 | 178,258 | 109,347 | ||||||||||||
| Income Attributable to Non-Controlling Interests | (470 | ) | (562 | ) | (1,377 | ) | (1,066 | ) | ||||||||
| Net Income Attributable to Common Shareholders | $ | 47,687 | $ | 28,509 | $ | 176,881 | $ | 108,281 | ||||||||
| Income from Continuing Operations Per Share | $ | 0.47 | $ | 0.38 | $ | 1.92 | $ | 1.34 | ||||||||
| Income Per Share | $ | 0.53 | $ | 0.31 | $ | 1.94 | $ | 1.18 | ||||||||
| Weighted Average Shares Outstanding | 90,553 | 92,214 | 91,274 | 92,091 | ||||||||||||
| Amounts Attributable to Common Shareholders: | ||||||||||||||||
| Reported Income from Continuing Operations | $ | 42,962 | $ | 35,445 | $ | 176,455 | $ | 124,616 | ||||||||
| Income Attributable to Non-Controlling Interests | (470 | ) | (562 | ) | (1,377 | ) | (1,066 | ) | ||||||||
| Income from Continuing Operations, net of tax | $ | 42,492 | $ | 34,883 | $ | 175,078 | $ | 123,550 | ||||||||
| Income (Loss) from Discontinued Operations, net of tax | 5,195 | (6,374 | ) | 1,803 | (15,269 | ) | ||||||||||
| Net Income | $ | 47,687 | $ | 28,509 | $ | 176,881 | $ | 108,281 | ||||||||
| PENSKE AUTOMOTIVE GROUP, INC. | ||||||
| Consolidated Condensed Balance Sheets | ||||||
| (Amounts In Thousands) | ||||||
| (Unaudited) | ||||||
| December 31, | December 31, | |||||
| 2011 | 2010 | |||||
| Assets | ||||||
| Cash and Cash Equivalents | $ | 29,116 | $ | 19,688 | ||
| Accounts Receivable, Net | 444,673 | 382,382 | ||||
| Inventories | 1,605,280 | 1,443,284 | ||||
| Other Current Assets | 80,307 | 68,225 | ||||
| Assets Held for Sale | 33,224 | 133,019 | ||||
| Total Current Assets | 2,192,600 | 2,046,598 | ||||
| Property and Equipment, Net | 858,975 | 716,427 | ||||
| Intangibles | 1,138,586 | 1,003,729 | ||||
| Other Long-Term Assets | 312,138 | 303,078 | ||||
| Total Assets | $ | 4,502,299 | $ | 4,069,832 | ||
| Liabilities and Equity | ||||||
| Floor Plan Notes Payable | $ | 988,650 | $ | 911,548 | ||
| Floor Plan Notes Payable -- Non-Trade | 713,635 | 497,074 | ||||
| Accounts Payable | 223,313 | 251,960 | ||||
| Accrued Expenses | 202,761 | 201,714 | ||||
| Current Portion Long-Term Debt | 3,414 | 10,593 | ||||
| Liabilities Held for Sale | 17,899 | 88,117 | ||||
| Total Current Liabilities | 2,149,672 | 1,961,006 | ||||
| Long-Term Debt | 846,777 | 769,285 | ||||
| Other Long-Term Liabilities | 365,437 | 293,688 | ||||
| Total Liabilities | 3,361,886 | 3,023,979 | ||||
| Equity | 1,140,413 | 1,045,853 | ||||
| Total Liabilities and Equity | $ | 4,502,299 | $ | 4,069,832 | ||
| PENSKE AUTOMOTIVE GROUP, INC. | ||||||||||||||||||||||
| Selected Data | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
| December 31, | % | December 31, | % | |||||||||||||||||||
| 2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||
| Total Retail Units: | ||||||||||||||||||||||
| New Retail | 39,270 | 37,758 | 4.0 | % | 154,829 | 150,164 | 3.1 | % | ||||||||||||||
| Used Retail | 32,183 | 26,822 | 20.0 | % | 129,652 | 110,083 | 17.8 | % | ||||||||||||||
| Total Retail | 71,453 | 64,580 | 10.6 | % | 284,481 | 260,247 | 9.3 | % | ||||||||||||||
| Fleet | 1,462 | 1,603 | -8.8 | % | 5,308 | 6,103 | -13.0 | % | ||||||||||||||
| Wholesale | 14,523 | 14,686 | -1.1 | % | 58,593 | 60,254 | -2.8 | % | ||||||||||||||
| Total | 87,438 | 80,869 | 8.1 | % | 348,382 | 326,604 | 6.7 | % | ||||||||||||||
| Same-Store Retail Units: | ||||||||||||||||||||||
| New Same-Store Retail | 37,545 | 37,578 | -0.1 | % | 146,004 | 146,419 | -0.3 | % | ||||||||||||||
| Used Same-Store Retail | 31,006 | 26,738 | 16.0 | % | 122,515 | 107,500 | 14.0 | % | ||||||||||||||
| Total Same-Store Retail | 68,551 | 64,316 | 6.6 | % | 268,519 | 253,919 | 5.7 | % | ||||||||||||||
| Same-Store Retail Revenue: (Amounts in thousands) | ||||||||||||||||||||||
| New Vehicles | $ | 1,435,999 | $ | 1,397,966 | 2.7 | % | $ | 5,429,084 | $ | 5,143,261 | 5.6 | % | ||||||||||
| Used Vehicles | 804,823 | 705,593 | 14.1 | % | 3,219,762 | 2,800,631 | 15.0 | % | ||||||||||||||
| Finance and Insurance, Net | 66,544 | 59,746 | 11.4 | % | 266,477 | 240,375 | 10.9 | % | ||||||||||||||
| Service and Parts | 332,898 | 330,550 | 0.7 | % | 1,315,134 | 1,274,234 | 3.2 | % | ||||||||||||||
| Total Same-Store Retail | $ | 2,640,264 | $ | 2,493,855 | 5.9 | % | $ | 10,230,457 | $ | 9,458,501 | 8.2 | % | ||||||||||
| Revenue Mix: | ||||||||||||||||||||||
| New Vehicles | 51.5 | % | 52.6 | % | 50.3 | % | 51.1 | % | ||||||||||||||
| Used Vehicles | 28.3 | % | 26.5 | % | 29.4 | % | 27.7 | % | ||||||||||||||
| Finance and Insurance, Net | 2.4 | % | 2.2 | % | 2.4 | % | 2.4 | % | ||||||||||||||
| Service and Parts | 11.8 | % | 12.4 | % | 12.1 | % | 12.5 | % | ||||||||||||||
| Fleet and Wholesale | 6.0 | % | 6.3 | % | 5.8 | % | 6.3 | % | ||||||||||||||
| Average Revenue per Vehicle Retailed: | ||||||||||||||||||||||
| New Vehicles | $ | 38,816 | $ | 37,195 | 4.4 | % | $ | 37,532 | $ | 35,137 | 6.8 | % | ||||||||||
| Used Vehicles | 26,034 | 26,389 | -1.3 | % | 26,224 | 25,962 | 1.0 | % | ||||||||||||||
| Gross Profit per Vehicle Retailed: | ||||||||||||||||||||||
| New Vehicles | $ | 3,251 | $ | 3,162 | 2.8 | % | $ | 3,120 | $ | 2,896 | 7.7 | % | ||||||||||
| Used Vehicles | 1,852 | 1,902 | -2.6 | % | 2.032 | 2,003 | 1.4 | % | ||||||||||||||
| Finance and Insurance | 965 | 930 | 3.8 | % | 977 | 940 | 3.9 | % | ||||||||||||||
| Operating items as a percentage of revenue: | ||||||||||||||||||||||
| New Vehicle Gross Profit | 8.4 | % | 8.5 | % | 8.3 | % | 8.2 | % | ||||||||||||||
| Used Vehicle Gross Profit | 7.1 | % | 7.2 | % | 7.7 | % | 7.7 | % | ||||||||||||||
| Service and Parts Gross Profit | 57.3 | % | 56.1 | % | 57.0 | % | 56.6 | % | ||||||||||||||
| Total Gross Profit | 15.4 | % | 15.6 | % | 15.8 | % | 15.9 | % | ||||||||||||||
| Selling, General and Admin. Expenses | 12.4 | % | 12.7 | % | 12.8 | % | 13.0 | % | ||||||||||||||
| Operating Income | 2.6 | % | 2.5 | % | 2.6 | % | 2.5 | % | ||||||||||||||
| Inc. From Cont. Ops. Before Inc. Taxes | 2.2 | % | 2.0 | % | 2.1 | % | 1.8 | % | ||||||||||||||
| Operating items as a percentage of total gross profit: | ||||||||||||||||||||||
| Selling, General and Administrative Expenses | 80.4 | % | 81.4 | % | 81.0 | % | 81.4 | % | ||||||||||||||
| Operating Income | 16.8 | % | 15.8 | % | 16.3 | % | 15.7 | % | ||||||||||||||
| PENSKE AUTOMOTIVE GROUP, INC. | ||||||||||||||||
| Selected Data (Continued) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Brand Revenue Mix: | ||||||||||||||||
| Premium: | ||||||||||||||||
| BMW | 25 | % | 24 | % | 25 | % | 22 | % | ||||||||
| Audi | 11 | % | 10 | % | 12 | % | 11 | % | ||||||||
| Mercedes-Benz | 12 | % | 10 | % | 10 | % | 10 | % | ||||||||
| Lexus | 4 | % | 5 | % | 4 | % | 5 | % | ||||||||
| Land Rover | 5 | % | 4 | % | 4 | % | 4 | % | ||||||||
| Porsche | 4 | % | 5 | % | 5 | % | 4 | % | ||||||||
| Ferrari / Maserati | 3 | % | 3 | % | 3 | % | 3 | % | ||||||||
| Acura | 2 | % | 2 | % | 2 | % | 2 | % | ||||||||
| Other | 4 | % | 5 | % | 4 | % | 5 | % | ||||||||
| Total Premium | 70 | % | 68 | % | 69 | % | 66 | % | ||||||||
| Foreign: | ||||||||||||||||
| Toyota | 10 | % | 11 | % | 11 | % | 12 | % | ||||||||
| Honda | 11 | % | 12 | % | 11 | % | 12 | % | ||||||||
| Nissan | 2 | % | 2 | % | 2 | % | 2 | % | ||||||||
| Volkswagen | 2 | % | 1 | % | 2 | % | 1 | % | ||||||||
| Other | 1 | % | 1 | % | 1 | % | 2 | % | ||||||||
| Total Foreign | 26 | % | 27 | % | 27 | % | 29 | % | ||||||||
| Domestic Big 3 | ||||||||||||||||
| General Motors / Chrysler / Ford | 4 | % | 5 | % | 4 | % | 5 | % | ||||||||
| Revenue Mix: | ||||||||||||||||
| U.S. | 67 | % | 64 | % | 63 | % | 63 | % | ||||||||
| International | 33 | % | 36 | % | 37 | % | 37 | % | ||||||||
| Other (Amounts in Thousands): | ||||||||||||||||
| EBITDA * | $ | 89,670 | $ | 77,353 | $ | 344,029 | $ | 293,414 | ||||||||
| Rent Expense | 43,207 | 42,925 | 171,328 | 163,234 | ||||||||||||
| Floorplan Credits | 5,517 | 5,118 | 21,029 | 20,084 | ||||||||||||
* See the following Non-GAAP reconciliation tables
|
PENSKE AUTOMOTIVE GROUP, INC. |
||||||||||||||
| Selected Data (Continued) | ||||||||||||||
| (Unaudited) | ||||||||||||||
|
Reconciliation of 2011 and 2010 net income to EBITDA: |
||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| (Amounts in Thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||
| Net Income | $ | 48,157 | $ | 29,071 | $ | 178,258 | $ | 109,347 | ||||||
| Depreciation | 12,588 | 11,379 | 48,903 | 46,253 | ||||||||||
| Other Interest Expense | 11,833 | 11,751 | 45,020 | 49,176 | ||||||||||
| Debt Discount Amortization | -- | 1,647 | 1,718 | 8,637 | ||||||||||
| Income Taxes | 22,287 | 17,131 | 71,933 | 64,732 | ||||||||||
| (Income)/Loss from Discontinued Operations, net | (5,195 | ) | 6,374 | (1,803 | ) | 15,269 | ||||||||
| EBITDA | $ | 89,670 | $ | 77,353 | $ | 344,029 | $ | 293,414 | ||||||
Reconciliation of twelve months ended December 31, 2011, income from continuing operations attributable to common shareholders and related earnings per share to adjusted income from continuing operations attributable to common shareholders and related earnings per share:
| Twelve Months Ended | ||||||||
| December 31, 2011 | ||||||||
|
(Amounts in Thousands, |
Income | EPS | ||||||
|
Income From Continuing Operations |
$ | 175,078 | $ | 1.92 | ||||
| Net Tax Benefit | (11,046 | ) | (0.12 | ) | ||||
|
Adjusted Income From Continuing Operations |
$ | 164,032 | $ | 1.80 | ||||
