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Penske Automotive Reports Record Fourth Quarter and Full Year 2013 Results

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SOURCE Penske Automotive Group, Inc.

BLOOMFIELD HILLS, Mich., Feb. 13, 2014 /PRNewswire/ --

Fourth Quarter 2013     

Twelve Months 2013

  • Revenue Increases 15.0% to $3.9 Billion 
  • Revenue Increases 12.4% to $14.7 Billion
  • Same-store Retail Revenue Increases 12.4%   
  • Same-store Retail Revenue Increases 10.9%
  • Income from Continuing Operations Increases 19.3% to $61.7 Million   
  • Income from Continuing Operations Increases 20.5% to $249.6 Million (prior year adjusted)
  • EPS from Continuing Operations Rises 19.3% to $0.68 per Share 
  • EPS from Continuing Operations Increases 20.5% to $2.76 per Share (prior year adjusted)
  • EBITDA Increases 16.6% to $119.9 Million     
  • EBITDA Increases 18.8% to $485.0 Million (prior year adjusted)

Penske Automotive Group, Inc. (NYSE:PAG), an international transportation services company, announced today the highest fourth quarter and full year 2013 income from continuing operations and related earnings per share in company history. For the fourth quarter, income from continuing operations attributable to common shareholders increased 19.3% to $61.7 million and related earnings per share increased 19.3% to $0.68 per share when compared to the same period last year.  

(Logo: http://photos.prnewswire.com/prnh/20130530/MM23675LOGO )

Total revenue increased 15.0% to $3.9 billion. The revenue increase was driven by an 11.4% increase in total retail unit sales, including a 9.8% increase on a same-store basis. Gross profit improved 14.2% to $586.4 million while operating income increased 15.9% to $106.7 million.

"Our business produced another outstanding quarter, completing the most successful year in the history of our company," said Chairman Roger Penske. During the fourth quarter, same-store retail revenue increased 12.4%, with each area of our automotive dealership business posting solid year-over-year growth. Further, we continued to demonstrate expense leverage as the ratio of selling, general and administrative expenses as a percentage of gross profit improved by 40 basis points. Going forward, with a strong balance sheet and a positive outlook across our automotive dealership, car rental and commercial vehicle businesses, we remain confident in our ability to continue growing our business."  

Highlights of the Fourth Quarter

  • Total Retail Unit Sales increased 11.4% to 90,622
    • +11.2% in the United States; +11.9% Internationally
    • New unit retail sales +6.7%
    • Used unit retail sales +17.8%
  • Same-store Retail Revenue increased 12.4%
    • New +9.2%; Used +20.0%; Finance & Insurance +15.5%; Service and Parts +8.8%
    • +10.7% in the United States; +15.9% Internationally
  • Average Transaction Price Per Unit
    • New $40,025; +3.6%
    • Used $26,474; +3.5%
  • Average Gross Profit Per Unit
    • New $3,203, +$35/unit;  Gross Margin 8.0%, -20 basis points
    • Used $1,742, -$117/unit; Gross Margin 6.6%, -70 basis points
    • Finance & Insurance $1,037, +$52/unit

For the year ended December 31, 2013, total revenue increased 12.4% to $14.7 billion, income from continuing operations increased 20.5% to $249.6 million and related earnings per share increased 20.5% to $2.76 per share when compared to adjusted figures in the same period last year as shown in the attached tables.

Conference Call

Penske Automotive will host a conference call discussing financial results relating to the fourth quarter of 2013 on February 13, 2014, at 2:00 p.m. Eastern Standard Time. To listen to the conference call, participants must dial (800) 230-1093 [International, please dial (612) 234-9960]. The call will also be simultaneously broadcast over the Internet through the Investors Relations section of the Penske Automotive Group website. Additionally, an investor presentation relating to the fourth quarter 2013 financial results has been posted to the company's website. To access the presentation or to listen to the company's webcast, please refer to www.penskeautomotive.com.

About Penske Automotive

Penske Automotive Group, Inc., (NYSE:PAG) headquartered in Bloomfield Hills, Michigan, is an international transportation services company, operating automotive dealerships, commercial vehicle distribution and car rental franchises principally in the United States, Western Europe, Australia and New Zealand, employs approximately 18,000 people worldwide and is a member of the Fortune 500 and Russell 2000. For additional information, visit the company's website at www.penskeautomotive.com.

Non-GAAP Financial Measures

This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations, earnings before interest, taxes, depreciation and amortization ("EBITDA" and adjusted "EBITDA"). The company has reconciled these measures to the most directly comparable GAAP measures in the release. The company believes that these widely accepted measures of operating profitability improve the transparency of the company's disclosures and provide 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 improve the period-to-period comparability of the company's results from its core business operations. These non-GAAP financial measures are not substitutes for GAAP financial results, and should only be considered in conjunction with the company's financial information that is presented in accordance with GAAP.

Caution Concerning Forward Looking Statements

Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s future sales potential and potential earnings outlook. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others: economic conditions generally, conditions in the credit markets and changes in interest rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters or other disruptions that interrupt the supply of vehicles or parts to us; changes in consumer credit availability, the outcome of legal and administrative matters, and other factors over which management has limited control. These forward-looking statements should be evaluated together with additional information about Penske Automotive's business, markets, conditions and other uncertainties, which could affect Penske Automotive's future performance. These risks and uncertainties are addressed in Penske Automotive's Form 10-K for the year ended December 31, 2012, and its other filings with the Securities and Exchange Commission ("SEC"). This press release speaks only as of its date, and Penske Automotive disclaims any duty to update the information herein.

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Follow Penske Automotive on Twitterhttps://twitter.com/#!/Penskecarscorp 
Visit Penske Automotive on YouTubehttp://www.youtube.com/penskecars

 

Inquiries should contact:

 

David K. Jones
Executive Vice President and

Chief Financial Officer

Penske Automotive Group, Inc.
248-648-2800
dave.jones@penskeautomotive.com

Anthony R. Pordon
Executive Vice President Investor Relations

and Corporate Development

Penske Automotive Group, Inc.
248-648-2540
tpordon@penskeautomotive.com

 

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Statements of Income

(Amounts In Millions, Except Per Share Data)

(Unaudited)

 


Three Months Ended


Twelve Months Ended


December 31,


December 31,


2013


2012


% Increase/

(Decrease)


2013


2012


% Increase/

(Decrease)

Revenues:












New Vehicle

$   1,981.6


$  1,794.0


10.5%


$   7,619.5


$   6,753.4


12.8%

Used Vehicle

1,088.4


893.0


21.9%


4,239.2


3,700.4


14.6%

Finance and Insurance, Net

94.0


80.1


17.4%


375.7


322.3


16.6%

Service and Parts

399.8


362.9


10.2%


1,550.6


1,444.3


7.4%

Fleet and Wholesale

173.8


216.9


-19.9%


715.3


859.9


-16.8%

Commercial Vehicle and Car Rental

117.4


4.0


NM


205.1


4.0


NM

Total Revenues

$   3,855.0


$  3,350.9


15.0%


$ 14,705.4


$ 13,084.3


12.4%

Cost of Sales:












New Vehicle

$   1,823.1


$  1,646.9


10.7%


$   7,034.7


$   6,208.0


13.3%

Used Vehicle

1,016.8


828.1


22.8%


3,928.1


3,417.5


14.9%

Service and Parts

164.5


149.6


10.0%


630.2


603.1


4.5%

Fleet and Wholesale

172.1


211.8


-18.7%


704.2


848.8


-17.0%

Commercial Vehicle and Car Rental

92.1


1.2


NM


148.4


1.2


NM

Total Cost of Sales

$   3,268.6


$  2,837.6


15.2%


$ 12,445.6


$ 11,078.6


12.3%

Gross Profit

586.4


513.3


14.2%


2,259.8


2,005.7


12.7%

SG&A Expenses

462.7


407.2


13.6%


1,761.9


1,586.8


11.0%

Depreciation

17.0


14.0


21.4%


61.7


53.5


15.3%

Operating Income

106.7


92.1


15.9%


436.2


365.4


19.4%

Floor Plan Interest Expense

(12.0)


(9.5)


26.3%


(43.6)


(38.3)


13.8%

Other Interest Expense

(11.7)


(11.7)


--


(47.9)


(46.8)


2.4%

Equity in Earnings of Affiliates

8.2


6.2


32.3%


30.7


27.6


11.2%

Debt Redemption Costs

--


--


--


--


(17.8)


NM

Income from Continuing Operations Before Income Taxes

91.2


77.1


18.3%


375.4


290.1


29.4%

Income Taxes

(29.0)


(24.8)


16.9%


(124.3)


(94.3)


31.8%

Income from Continuing Operations

62.2


52.3


18.9%


251.1


195.8


28.2%

Loss from Discontinued Operations, Net of Tax

(2.5)


(3.1)


-19.4%


(5.4)


(8.6)


-37.2%

Net Income

59.7


49.2


21.3%


245.7


187.2


31.3%

Less: Income Attributable to Non-Controlling Interests

(0.5)


(0.6)


-16.7%


(1.5)


(1.7)


-11.8%

Net Income Attributable to Common Shareholders

$        59.2


$        48.6


21.8%


$      244.2


$      185.5


31.6%

Income from Continuing Operations Per Share

$        0.68


$        0.57


19.3%


$        2.76


$        2.15


28.4%

Income Per Share

$        0.66


$        0.54


22.2%


$        2.70


$        2.05


31.7%

Weighted Average Shares Outstanding

90,378,532


90,290,765


--


90,330,621


90,342,315


--

Amounts Attributable to Common Shareholders:












Reported Income from Continuing Operations

$        62.2


$       52.3


18.9%


$      251.1


$      195.8


28.2%

Less:  Income Attributable to Non-Controlling Interests

(0.5)


(0.6)


-16.7%


(1.5)


(1.7)


-11.8%

Income from Continuing Operations, net of tax

$        61.7


$       51.7


19.3%


$      249.6


$      194.1


28.6%

Loss from Discontinued Operations, net of tax

(2.5)


(3.1)


-19.4%


(5.4)


(8.6)


-37.2%

Net Income

$        59.2


$       48.6


21.8%


$      244.2


$      185.5


31.6%

 

NM – not meaningful

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Balance Sheets

(Amounts In Millions)

(Unaudited)

 


December 31,


December 31,


2013


2012

Assets




Cash and Cash Equivalents

$           49.8


$                      43.5

Accounts Receivable, Net

606.2


550.9

Inventories

2,538.3


1,975.7

Other Current Assets

88.5


90.4

Assets Held for Sale

63.8


123.4

Total Current Assets

3,346.6


2,783.9

Property and Equipment, Net

1,241.0


1,022.9

Intangibles

1,449.0


1,248.3

Other Long-Term Assets

378.9


323.9

Total Assets

$      6,415.5


$                      5,379.0





Liabilities and Equity




Floor Plan Notes Payable

$      1,704.4


$                      1,404.9

Floor Plan Notes Payable – Non-Trade

903.2


711.4

Accounts Payable

374.7


261.1

Accrued Expenses

264.0


222.6

Current Portion Long-Term Debt

50.0


19.5

Liabilities Held for Sale

35.5


75.6

Total Current Liabilities

3,331.8


2,695.1

Long-Term Debt

1,033.2


917.1

Other Long-Term Liabilities

528.4


450.5

Total Liabilities

4,893.4


4,062.7

Equity

1,522.1


1,316.3

Total Liabilities and Equity

$      6,415.5


$                      5,379.0

 

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Selected Data

(Unaudited)

 


Three Months Ended


Twelve Months Ended


December 31,


December 31,


2013


2012


2013


2012

Geographic Revenue Mix:








U.S.

64%


67%


64%


65%

U.K.

32%


31%


34%


34%

Other International

4%


2%


2%


1%

Total 

100%


100%


100%


100%









Revenue Mix:








Automotive Dealership

97%


100%


99%


100%

Commercial Vehicle and Car Rental

3%


--


1%


--

Total 

100%


100%


100%


100%









Automotive Dealership Revenue Mix:








    Premium/Luxury:








BMW

26%


29%


25%


26%

Audi

13%


12%


13%


12%

Mercedes-Benz

11%


11%


11%


11%

Lexus

4%


4%


4%


4%

Land Rover

5%


4%


4%


4%

Porsche

5%


5%


5%


5%

Ferrari / Maserati

2%


2%


2%


2%

Acura

2%


1%


1%


2%

Others

3%


4%


4%


4%

Total Premium/Luxury

71%


72%


69%


70%

Volume Foreign:








Toyota

11%


10%


11%


10%

Honda

9%


9%


11%


11%

Nissan

1%


1%


1%


1%

Volkswagen

2%


2%


2%


2%

Others

2%


2%


2%


2%

Total Volume Foreign

25%


24%


27%


26%

Domestic Big 3:








General Motors / Chrysler / Ford

4%


4%


4%


4%

    Total Automotive Dealership Revenue

100%


100%


100%


100%









Gross Profit Mix:








New Vehicles

27.0%


28.7%


25.9%


27.2%

Used Vehicles

12.2%


12.6%


13.8%


14.1%

Service and Parts

40.2%


41.6%


40.7%


42.0%

Finance and Insurance

16.0%


15.6%


16.6%


16.1%

Fleet and Wholesale

0.3%


0.9%


0.5%


0.5%

Commercial Vehicle and Car Rental

4.3%


0.6%


2.5%


0.1%

Total

100.0%


100.0%


100.0%


100.0%

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Selected Data

(Unaudited)

 


Three Months Ended


Twelve Months Ended


December 31,


December 31,


2013


2012


Increase/

(Decrease)


2013


2012


Increase/

(Decrease)

Operating items as a percentage of revenue:












Gross Profit:












   New Vehicle

8.0%


8.2%


-20 bps


7.7%


8.1%


-40 bps

   Used Vehicle

6.6%


7.3%


-70 bps


7.3%


7.6%


-30 bps

   Service and Parts

58.9%


58.8%


10 bps


59.4%


58.2%


120 bps

   Fleet and Wholesale

1.0%


2.4%


-140 bps


1.6%


1.3%


30 bps

   Commercial Vehicle and Car Rental

21.6%


NM


         NM


27.6%


NM


         NM

  Total Gross Profit

15.2%


15.3%


-10 bps


15.4%


15.3%


10 bps

Selling, General and Admin. Expenses

12.0%


12.2%


-20 bps


12.0%


12.1%


-10 bps

Operating Income

2.8%


2.7%


     10 bps


3.0%


2.8%


20 bps

Inc. From Cont. Ops. Before Inc. Taxes

2.4%


2.3%


10 bps


2.6%


2.2%


40 bps













Operating items as a percentage of total gross profit:












Selling, General and Administrative Expenses

78.9%


79.3%


-40 bps


78.0%


79.1%


-110 bps

Operating Income

18.2%


17.9%


30 bps


19.3%


18.2%


110 bps













 

 



Three Months Ended


Twelve Months Ended


December 31,


December 31,


2013


2012


% Increase/

(Decrease)


2013


2012


% Increase/

(Decrease)













Other (Amounts in Millions):












    EBITDA*

$          119.9


$          102.8


16.6%


$          485.0


$          390.4


24.2%

Adjusted EBITDA*

119.9


102.8


16.6%


485.0


408.2


18.8%

Rent Expense

47.5


43.4


9.4%


181.2


171.2


5.8%

Floorplan Credits

6.5


6.4


1.6 %


26.6


23.3


14.2%


*    See the following Non-GAAP reconciliation tables


NM – not meaningful

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Automotive Retail Operations Selected Data

(Unaudited)

 


Three Months Ended


Twelve Months Ended


December 31,


December 31,


2013


2012


% Increase/

(Decrease)


2013


2012


% Increase/

(Decrease)

Total Retail Units:












New Retail

49,510


46,422


6.7%


199,795


180,949


10.4%

Used Retail

41,112


34,912


17.8%


166,419


145,087


14.7%

Total Retail

90,622


81,334


11.4%


366,214


326,036


12.3%













Same-Store Retail Units:












New Same-Store Retail

48,097


45,652


5.4%


192,433


177,171


8.6%

Used Same-Store Retail

39,827


34,455


15.6%


159,336


142,033


12.2%

Total Same-Store Retail

87,924


80,107


9.8%


351,769


319,204


10.2%













Same-Store Retail Revenue: (Amounts in millions)












New Vehicles

$           1,925.5


$           1,763.4


9.2%


$           7,351.2


$           6,613.9


11.1%

Used Vehicles

1,060.6


883.6


20.0%


4,089.8


3,646.2


12.2%

Finance and Insurance, Net

91.5


79.2


15.5%


365.7


318.8


14.7%

Service and Parts

387.9


356.5


8.8%


1,490.4


1,415.8


5.3%

Total Same-Store Retail

$           3,465.5


$           3,082.7


12.4%


$         13,297.1


$         11,994.7


10.9%













Retail Revenue Mix:












New Vehicles

55.6%


57.3%


-170 bps


55.3%


55.3%


--

Used Vehicles

30.6%


28.5%


    210 bps


30.8%


30.3%


50 bps

Finance and Insurance, Net

2.6%


2.6%


--


2.7%


2.6%


10 bps

Service and Parts

11.2%


11.6%


-40 bps


11.2%


11.8%


-60 bps













Average Revenue per Vehicle Retailed:












New Vehicles

$         40,025


$         38,645


3.6%


$         38,137


$         37,322


2.2%

Used Vehicles

26,474


25,578


3.5%


25,473


25,505


-0.1%













Gross Profit per Vehicle Retailed:












New Vehicles

$           3,203


$           3,168


1.1%


$           2,927


$           3,014


-2.9%

Used Vehicles

1,742


1,859


-6.3%


1,869


1,950


-4.2%

Finance and Insurance

1,037


985


5.3%


1,026


989


3.7%

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Non-GAAP Reconciliation

(Unaudited)

 

Reconciliation of reported income from continuing operations net of taxes and earnings per share to adjusted income from continuing operations net of taxes and earnings per share for the twelve months ended December 31, 2013 and 2012:

 


Income


Earnings Per Share


Twelve Months Ended


Twelve Months Ended


December 31,


December 31,

(Amounts in Millions)

2013


2012


% Increase/(Decrease)


2013


2012


% Increase/(Decrease)













Income from Continuing Operations Net of Tax and Earnings per Share

$        249.6


$          194.1


28.6%


$            2.76


$              2.15


28.4%

Debt Redemption Costs (1)

--


13.0


         NM


--


0.14


NM

Adjusted Income from Continuing Operations and Adjusted Earnings Per Share

$        249.6


$          207.1


20.5%


$            2.76


$              2.29


20.5%


(1)     Costs associated with the redemption of the Company's $375 million of 7.75% senior subordinated notes due 2016 of $17.8 million ($13.0 million net of taxes), or $0.14 per share.


NM – not meaningful

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Non-GAAP Reconciliation

(Unaudited)

 

Reconciliation of reported net income to earnings before interest, taxes, depreciation and amortization ("EBITDA) and adjusted EBITDA for the three months and twelve months ended December 31, 2013 and 2012:

 


Three Months Ended


Twelve Months Ended


December 31,


December 31,

(Amounts in Millions)

2013


2012


% Increase/

(Decrease)


2013


2012


% Increase/

(Decrease)













Net Income

$            59.7


$            49.2


21.3%


$          245.7


$          187.2


31.3%

Depreciation

17.0


14.0


21.4%


61.7


53.5


15.3%

Other Interest Expense

11.7


11.7


--


47.9


46.8


2.4%

Income Taxes

29.0


24.8


16.9%


124.3


94.3


31.8%

Loss from Discontinued Operations, net

2.5


3.1


-19.4%


5.4


8.6


-37.2%

EBITDA

$          119.9


$          102.8


16.6%


$          485.0


$          390.4


24.2%

Add Back: Debt redemption costs (1)

--


--


--


--


17.8


--

Adjusted EBITDA

$          119.9


$          102.8


16.6%


$          485.0


$          408.2


18.8%


(1)     Costs associated with the redemption of the Company's $375 million of 7.75% senior subordinated notes due 2016 of $17.8 million ($13.0 million net of taxes), or $0.14 per share.


NM – not meaningful

 

 

 

 

 

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