Wednesday, April 25, 2007
Group 1 Automotive Reports 2005 First-Quarter Results
Group 1 Automotive, Inc. (NYSE:GPI), a Fortune 500 specialty retailer, today reported first-quarter income before cumulative effect of a change in accounting principle of $14.4 million, or $0.60 per diluted share, on revenues of $1.4 billion. This compares with $10.5 million, or $0.45 per diluted share, on revenues of $1.1 billion in the first quarter of 2004.
The prior-year results include an after-tax charge of $4.0 million, or $0.17 per diluted share, related to the early redemption of certain of the company's senior subordinated notes. Excluding this charge, first-quarter 2004 earnings were $0.62 per diluted share.
Summary of Results of Operations (Unaudited)
(in millions, except per share amounts)
Three Months Ended
March 31,
-------------------
2005 2004
--------- ---------
Revenues $1,396.7 $1,147.0
Gross Profit $224.5 $183.4
Income from Operations $36.6 $33.2
Income before Cumulative Effect of a
Change in Accounting Principle $14.4 $10.5
Diluted Earnings per Share before Cumulative
Effect of a Change in Accounting Principle $0.60 $0.45
Results for the First Quarter
During the first quarter, total revenues increased 21.8 percent, to $1.4 billion from $1.1 billion during the same period last year, due largely to acquisitions made in 2004. On a same store basis, total revenues grew 0.1 percent, highlighted by a 3.7 percent increase in parts and service. Same store new and total used vehicle revenues were down 0.1 percent and 1.0 percent, respectively, while same store finance and insurance revenues were 0.1 percent lower.
Gross profit for the quarter was $224.5 million, a 22.4 percent increase from $183.4 million in the prior-year period. On a same store basis, gross profit for the quarter grew 1.7 percent, highlighted by a 4.4 percent increase in total used vehicles and a 2.7 percent increase in parts and service. Same store gross profit for new vehicle sales was also up slightly from the prior-year period. Same store gross margin increased to 16.2 percent from 16.0 percent in the year-ago period. This increase was due largely to an increase in parts and service revenues as a percentage of total revenues, as well as a 50 basis point increase in total used vehicle gross margins.
The company reported income from operations of $36.6 million in the first quarter, a 10.1 percent increase from $33.2 million in the first quarter of 2004. Operating margin was 2.6 percent, compared with 2.9 percent in 2004. On a same store basis, operating margin declined to 2.7 percent from 2.9 percent in the prior-year period, as the above-noted increase in same store gross profit was more than offset by a 90 basis point increase in selling, general and administrative (SG&A) expenses as a percentage of gross profit.
During September 2004, the SEC staff issued Staff Announcement D-108, "Use of the Residual Method to Value Acquired Assets Other Than Goodwill" (EITF D-108), which, among other things, required that a "direct" method be used to determine the fair value of intangible assets other than goodwill in connection with impairment testing under Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." As required by EITF D-108, during the first quarter, the company performed an impairment test using a direct method on all intangible assets that were previously valued using a "residual" method. Upon completion of this test, the carrying value of some of the company's intangible franchise rights exceeded the newly determined fair value of such assets. As a result, the company recorded a non-cash, after-tax charge of $16.0 million, or $0.67 per diluted share. As required per EITF D-108, the charge is reported in the company's first-quarter income statement as a cumulative effect of a change in accounting principle.
Including this charge, the company's net loss for the quarter was $1.6 million, or $0.07 per diluted share, compared with $0.45 per diluted share on net income of $10.5 million during 2004.
Management's Outlook
Group 1 announced that it expects to report 2005 earnings of $2.95 to $3.05 per diluted share before cumulative effect of a change in accounting principle. However, as a result of the SEC's recent announcement delaying the implementation of SFAS No. 123(R), "Share Based Payment," this guidance now excludes the previously estimated negative impact of $0.07 per diluted share related to the expensing of stock based compensation in the second half of 2005. The company's full-year guidance also excludes any future acquisitions. The guidance is based on average diluted shares outstanding of 24.1 million
The prior-year results include an after-tax charge of $4.0 million, or $0.17 per diluted share, related to the early redemption of certain of the company's senior subordinated notes. Excluding this charge, first-quarter 2004 earnings were $0.62 per diluted share.
Summary of Results of Operations (Unaudited)
(in millions, except per share amounts)
Three Months Ended
March 31,
-------------------
2005 2004
--------- ---------
Revenues $1,396.7 $1,147.0
Gross Profit $224.5 $183.4
Income from Operations $36.6 $33.2
Income before Cumulative Effect of a
Change in Accounting Principle $14.4 $10.5
Diluted Earnings per Share before Cumulative
Effect of a Change in Accounting Principle $0.60 $0.45
Results for the First Quarter
During the first quarter, total revenues increased 21.8 percent, to $1.4 billion from $1.1 billion during the same period last year, due largely to acquisitions made in 2004. On a same store basis, total revenues grew 0.1 percent, highlighted by a 3.7 percent increase in parts and service. Same store new and total used vehicle revenues were down 0.1 percent and 1.0 percent, respectively, while same store finance and insurance revenues were 0.1 percent lower.
Gross profit for the quarter was $224.5 million, a 22.4 percent increase from $183.4 million in the prior-year period. On a same store basis, gross profit for the quarter grew 1.7 percent, highlighted by a 4.4 percent increase in total used vehicles and a 2.7 percent increase in parts and service. Same store gross profit for new vehicle sales was also up slightly from the prior-year period. Same store gross margin increased to 16.2 percent from 16.0 percent in the year-ago period. This increase was due largely to an increase in parts and service revenues as a percentage of total revenues, as well as a 50 basis point increase in total used vehicle gross margins.
The company reported income from operations of $36.6 million in the first quarter, a 10.1 percent increase from $33.2 million in the first quarter of 2004. Operating margin was 2.6 percent, compared with 2.9 percent in 2004. On a same store basis, operating margin declined to 2.7 percent from 2.9 percent in the prior-year period, as the above-noted increase in same store gross profit was more than offset by a 90 basis point increase in selling, general and administrative (SG&A) expenses as a percentage of gross profit.
During September 2004, the SEC staff issued Staff Announcement D-108, "Use of the Residual Method to Value Acquired Assets Other Than Goodwill" (EITF D-108), which, among other things, required that a "direct" method be used to determine the fair value of intangible assets other than goodwill in connection with impairment testing under Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." As required by EITF D-108, during the first quarter, the company performed an impairment test using a direct method on all intangible assets that were previously valued using a "residual" method. Upon completion of this test, the carrying value of some of the company's intangible franchise rights exceeded the newly determined fair value of such assets. As a result, the company recorded a non-cash, after-tax charge of $16.0 million, or $0.67 per diluted share. As required per EITF D-108, the charge is reported in the company's first-quarter income statement as a cumulative effect of a change in accounting principle.
Including this charge, the company's net loss for the quarter was $1.6 million, or $0.07 per diluted share, compared with $0.45 per diluted share on net income of $10.5 million during 2004.
Management's Outlook
Group 1 announced that it expects to report 2005 earnings of $2.95 to $3.05 per diluted share before cumulative effect of a change in accounting principle. However, as a result of the SEC's recent announcement delaying the implementation of SFAS No. 123(R), "Share Based Payment," this guidance now excludes the previously estimated negative impact of $0.07 per diluted share related to the expensing of stock based compensation in the second half of 2005. The company's full-year guidance also excludes any future acquisitions. The guidance is based on average diluted shares outstanding of 24.1 million
# posted by Medical Information : 4:14 AM
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