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AutoNation Reports All-Time Record Quarterly EPS from Continuing Operations


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- Adjusted EPS from continuing operations for the second quarter of 2012 was an all-time record(1) $0.66, up 35% compared to second quarter 2011 EPS from continuing operations of $0.49

- On a GAAP basis, second quarter 2012 EPS from continuing operations was $0.64

- Demonstrated improved operating leverage of 69.8% (selling, general and administrative expenses as a percentage of gross profit), a 180 basis point improvement compared to the second quarter of 2011

- Total revenue of $3.9 billion, up 17% compared to the year-ago period; revenue for all major business sectors - new vehicles, used vehicles, parts and service, and finance and insurance - improved compared to second quarter of 2011

FORT LAUDERDALE, FL--July 19, 2012: AutoNation, Inc. , America's largest automotive retailer, today reported 2012 second quarter adjusted net income from continuing operations of $82 million, or $0.66 per share, compared to net income from continuing operations of $73 million, or $0.49 per share, for the same period in the prior year, a 35% improvement on a per-share basis. On a GAAP basis, second quarter 2012 net income from continuing operations was $79 million, or $0.64 per share. Reconciliations of non-GAAP financial measures are included in the attached financial tables.

2012 second quarter revenue totaled $3.9 billion, compared to $3.3 billion in the year-ago period, an increase of 17%, driven primarily by stronger retail new vehicle unit sales. AutoNation's retail new vehicle unit sales increased 29%. Based on CNW Research data, total U.S. industry retail new vehicle unit sales increased 15%.

Mike Jackson, Chairman and Chief Executive Officer, said, "We delivered solid double-digit growth in operating income in the second quarter, driven by improved gross profit in our new vehicle, parts and service, and finance and insurance business sectors, as well as significantly improved operating leverage. We are very pleased with our strong year-over-year growth in these areas of our business."

Commenting on the automotive retail environment, Mr. Jackson added, "We continued to see a strong new vehicle selling environment in the second quarter, supported by genuine replacement demand, a healthy credit environment, and accelerated product offerings. We are expecting industry new vehicle sales to reach mid-14 million units in 2012."

During the second quarter of 2012, AutoNation repurchased 3.7 million shares of common stock for an aggregate purchase price of $126.2 million. As of June 30, 2012, there were 121 million shares outstanding. AutoNation today announced that the Board of Directors authorized the repurchase of up to an additional $250 million of AutoNation common stock. With the increased authorization, AutoNation has approximately $368 million remaining Board authorization for share repurchase.

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(2) segment is comprised of stores that sell vehicles manufactured primarily by Toyota, Honda, Hyundai and Nissan; and the Premium Luxury(2) segment is comprised of stores that sell vehicles manufactured primarily by Mercedes-Benz, BMW, Audi and Lexus. Segment results for the second quarter of 2012 were as follows:

  • Domestic - Domestic segment income(3) was $54 million compared to year-ago segment income of $46 million. Second quarter Domestic retail new vehicle unit sales increased 17%.
  • Import - Import segment income(3) was $67 million compared to year-ago segment income of $63 million. Second quarter Import retail new vehicle unit sales increased 44% as sales normalized from the tsunami effects from the prior year.
  • Premium Luxury - Premium Luxury segment income(3) was $68 million compared to year-ago segment income of $60 million. Second quarter Premium Luxury retail new vehicle unit sales increased 16%.

For the six-month period ended June 30, 2012, the Company reported adjusted net income from continuing operations of $155 million, or $1.21 per share, compared to net income from continuing operations of $144 million, or $0.95 per share for the same period in the prior year, an improvement of 27% on a per-share basis. On a GAAP basis, net income from continuing operations for the six-month period ended June 30, 2012 was $153 million, or $1.19 per share. The Company's revenue for the six-month period ended June 30, 2012, totaled $7.6 billion, up 14% compared to $6.6 billion for the same period in the prior year.

The second quarter conference call may be accessed by telephone at (888) 769-8515 (password: AutoNation) at 11:00 a.m. Eastern Time or on AutoNation's investor relations website at AutoNation Investors

The webcast will also be available on our website under "Events & Presentations" following the call. A playback of the conference call will be available after 1:00 p.m. Eastern Time on July 19, 2012, through July 30, 2012 by calling (800) 337-6538 (password 75300).

(1) As compared to adjusted EPS from continuing operations in prior periods.
(2) As of March 31, 2012, we revised the basis of segmentation for our Import and Premium Luxury segments to reclassify our Audi franchises from the Import segment to the Premium Luxury segment. In connection with this change, we have reclassified historical amounts to conform to our current segment presentation.
(3) Segment income is defined as operating income less floorplan interest expense.