Group 1 Automotive Reports 2013 Third Quarter Financial Results Board Increases Share Repurchase Authorization by 50 Percent

HOUSTON, Oct. 24, 2013 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI), an international, Fortune 500 automotive retailer, today reported 2013 third quarter adjusted net income of $32.9 million and diluted earnings per common share of $1.20 for the period ended Sept. 30, 2013.  Adjusted net income increased 4.9 percent from the comparable, adjusted prior-year period.

Year-to-date 2013 adjusted net income increased 20.9 percent.  Adjusted diluted earnings per common share were $3.88.

"Group 1 Automotive continued to demonstrate strong top line growth of over 18 percent in the third quarter.   However, margin pressures in the U.S. market and economic pressures in the Brazilian market limited our adjusted earnings growth to 5 percent.  We are actively pursuing cost reduction opportunities to address both of these issues," said Earl J. Hesterberg, Group 1's president and chief executive officer.  "We continue to see excellent growth prospects for the U.S. auto industry in the year ahead."

Consolidated Results for Third Quarter 2013 (year-over-year comparable basis)

  • Total revenue increased 18.4 percent to $2.3 billion.
  • New vehicle revenues increased 21.5 percent on 22.5 percent higher unit sales. New vehicle gross profit increased 10.1 percent to $73.3 million as lower margins, down $195 per unit, partially offset the revenue growth.
  • U.K. same store revenue increased 14.4 percent driven by 17.8 percent growth in new vehicle unit sales.
  • Retail used vehicle revenues increased 14.6 percent on increased unit sales of 16.2 percent. Gross profit improved 9.9 percent to $41.5 million as lower margins, down $90 per unit, partially offset the revenue growth.
  • Parts and service gross profit increased 13.2 percent on revenue growth of 13.5 percent. Same store parts and service revenue increased 8.0 percent.
  • Same store Finance and Insurance gross profit per retail unit increased 7.1 percent to $1,338 per unit.
  • SG&A expenses (adjusted) as a percent of gross profit increased 90 basis points, to 75.1 percent, as lower new and used vehicle margins negatively impacted leverage.
  • Fully diluted common shares outstanding averaged 26.3 million shares, up 1.4 million from the second quarter, with the increase primarily explained by the dilutive effect of higher share prices on share count derived from the Company's outstanding convertible securities.

Segment Results for Third Quarter 2013 (year-over-year comparable basis)

  • United States:

Group 1's U.S. revenues were $1.9 billion, an increase of 4.1 percent.  The revenue growth was primarily explained by unit sales increases of 2.8 percent in new vehicles and 5.3 percent in retail used vehicles, as well as an increase of 3.3 percent in parts and service revenue.  The revenue drove gross profit growth of 3.2 percent, reflecting the higher new and used retail volumes, expanded parts and service margins of 60 basis points, and an F&I increase of 13.3 percent, or $115, to $1,375 per retail unit.  As the Company has rebalanced its U.S. dealership portfolio over the past 12 months and disposed of a net of 6 franchises representing annualized revenues of approximately $154.0 million (excluding the Honda franchise acquired in Tulsa, Oklahoma on September 30, 2013), consolidated results are not fully reflective of underlying same store performance in the U.S.

On a comparable basis, SG&A expenses as a percent of gross profit remained flat at 74.0 percent, operating margin was 3.4 percent and pretax margin was 2.5 percent.  Group 1's U.S. operations accounted for 80.7 percent of total revenues, 85.1 percent of total gross profit and 90.0 percent of the Company's adjusted pretax income.

  • United Kingdom:

Group 1's U.K. operations accounted for 10.0 percent of total revenues, 7.7 percent of total gross profit, and 8.6 percent of the Company's adjusted pretax income.  Reflecting significant acquisition activity over the past year, total revenue increased 44.7 percent to $234.9 million, and gross profit increased 29.7 percent.  Revenue growth was primarily driven by 67.5 percent and 86.1 percent increases in new and used vehicle retail unit sales, respectively.

On a comparable basis, SG&A expenses as a percent of gross profit increased 20 basis points to 77.0 percent.

  • Brazil:

Group 1's Brazil operations accounted for 9.2 percent of total revenues, 7.2 percent of total gross profit and 1.4 percent of the Company's adjusted pretax income.  Gross profit was $23.7 million on revenues of $215.9 million.  New vehicle sales were the primary revenue contributor at 73.5 percent, while new vehicles and parts and service were the primary gross profit contributors at 48.0 percent and 33.8 percent, respectively.

SG&A expenses as a percent of gross profit was at 85.6 percent, operating margin was 1.4 percent and pretax margin was 0.3 percent.

Corporate Development
On September 30, 2013, Group 1 purchased a Honda franchise in Tulsa, Oklahoma that is estimated to generate $60.0 million in annual revenues.

Year to date, Group 1 has disposed of 7 franchises that generated $318.9 million of annual revenues and acquired 29 franchises worldwide that are expected to generate approximately $967.0 million in annual revenues.

Share Repurchase Authorization
Group 1's board of directors increased the Company's common stock share repurchase authorization by 50 percent, to $75.0 million.  Purchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or in privately negotiated transactions.

The Company expects that any repurchase of shares will be funded by cash from operations.  Repurchased shares will be held in treasury.

Third Quarter Earnings Conference Call Details
Group 1's senior management will host a conference call today at 10 a.m. ET to discuss the third quarter financial results and the Company's outlook and strategy.

The conference call will be simulcast live on the Internet at www.group1auto.com, then click on 'Investor Relations' and then 'Events' or through this link: http://www.group1corp.com/news/events.aspx. A webcast replay will be available for 30 days.

The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:

Domestic:

1-877-300-8521

International:

1-412-317-6026

Conference ID:

10035201

A telephonic replay will be available following the call through October 30, 2013 at 11:59 p.m. ET by dialing:

Domestic:     

1-877-870-5176

International:  

1-858-384-5517

Replay Pin:     

10035201

About Group 1 Automotive, Inc.
Group 1 owns and operates 141 automotive dealerships, 179 franchises, and 35 collision centers in the United States, the United Kingdom and Brazil that offer 33 brands of automobiles.  Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing, service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.

Group 1 Automotive can be reached on the Internet at www.group1auto.com.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions.  In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should," "foresee," "may" or "will" and similar expressions.  While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate.  Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements.  These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel.  For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.  Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof.  We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Investor contacts:
Sheila Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | sroth@group1auto.com

Media contacts:
Pete DeLongchamps
V.P. Manufacturer Relations and Public Affairs
Group 1 Automotive, Inc.
713-647-5770 | pdelongchamps@group1auto.com 
or
Clint Woods
Pierpont Communications, Inc.
713-627-2223 | cwoods@piercom.com

 

Group 1 Automotive, Inc.

Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)








Three Months Ended September 30,


2013


2012


% Change

REVENUES:






New vehicle retail sales

$       1,386,667


$       1,141,286


21.5

Used vehicle retail sales

529,828


462,395


14.6

Used vehicle wholesale sales

85,800


78,424


9.4

Parts and service

255,316


224,990


13.5

Finance and insurance

82,536


69,477


18.8

Total revenues

2,340,147


1,976,572


18.4







COST OF SALES:






New vehicle retail sales

1,313,372


1,074,736


22.2

Used vehicle retail sales

488,346


424,663


15.0

Used vehicle wholesale sales

87,334


79,067


10.5

Parts and service

121,633


106,875


13.8

Total cost of sales

2,010,685


1,685,341


19.3







GROSS PROFIT

329,462


291,231


13.1







SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

246,863


216,082


14.2







DEPRECIATION AND AMORTIZATION EXPENSE

9,093


8,096


12.3







ASSET IMPAIRMENTS

565


-


100.0







OPERATING INCOME

72,941


67,053


8.8







OTHER EXPENSE:






Floorplan interest expense

(10,690)


(7,942)


34.6

Other interest expense, net

(9,971)


(9,619)


3.7

INCOME BEFORE INCOME TAXES

52,280


49,492


5.6







PROVISION FOR INCOME TAXES

(19,515)


(18,157)


7.5







NET INCOME

$            32,765


$            31,335


4.6

Earnings allocated to participating securities

(1,320)


(1,641)


(19.6)

Earnings available to diluted common shares

$            31,445


$            29,694


5.9







DILUTED EARNINGS PER SHARE

$                1.19


$                1.32


(9.8)







Weighted average dilutive common shares outstanding

26,342


22,458


17.3

Weighted average participating securities

1,100


1,245


(11.6)

Total weighted average shares outstanding

27,442


23,703


15.8








Nine Months Ended September 30,


2013


2012


% Change

REVENUES:






New vehicle retail sales

$       3,873,121


$       3,134,591


23.6

Used vehicle retail sales

1,536,031


1,333,603


15.2

Used vehicle wholesale sales

243,667


218,415


11.6

Parts and service

753,776


658,404


14.5

Finance and insurance

232,494


192,130


21.0

Total revenues

6,639,089


5,537,143


19.9







COST OF SALES:






New vehicle retail sales

3,656,825


2,951,379


23.9

Used vehicle retail sales

1,410,768


1,220,628


15.6

Used vehicle wholesale sales

242,267


216,031


12.1

Parts and service

358,004


312,106


14.7

Total cost of sales

5,667,864


4,700,144


20.6







GROSS PROFIT

971,225


836,999


16.0







SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

731,455


629,521


16.2







DEPRECIATION AND AMORTIZATION EXPENSE

26,390


23,074


14.4







ASSET IMPAIRMENTS

1,174


288


307.6







OPERATING INCOME

212,206


184,116


15.3







OTHER EXPENSE:






Floorplan interest expense

(30,927)


(23,424)


32.0

Other interest expense, net

(28,783)


(27,849)


3.4

Other expense, net

(789)


-


100.0

INCOME BEFORE INCOME TAXES

151,707


132,843


14.2







PROVISION FOR INCOME TAXES

(59,436)


(49,766)


19.4







NET INCOME

$            92,271


$            83,077


11.1

Earnings allocated to participating securities

(3,843)


(4,373)


(12.1)

Earnings available to diluted common shares

$            88,428


$            78,704


12.4

DILUTED EARNINGS PER SHARE

$                3.52


$                3.50


0.6







Weighted average dilutive common shares outstanding

25,153


22,501


11.8

Weighted average participating securities

1,095


1,257


(12.9)

Total weighted average shares outstanding

26,248


23,758


10.5

 

 

Group 1 Automotive, Inc.

Consolidated Balance Sheets

(Dollars in thousands)










September 30,


December 31,





2013


2012


% Change

ASSETS:


(Unaudited)












CURRENT ASSETS:







Cash and cash equivalents


$             26,278


$              4,650


465.1

Contracts in transit and vehicle receivables, net


160,554


204,396


(21.4)

Accounts and notes receivable, net


123,376


111,228


10.9

Inventories, net


1,351,719


1,194,288


13.2

Deferred income taxes


22,273


19,750


12.8

Prepaid expenses and other current assets


23,775


31,869


(25.4)

    Total current assets


1,707,975


1,566,181


9.1

PROPERTY AND EQUIPMENT, net


716,514


667,768


7.3

GOODWILL AND INTANGIBLE FRANCHISE RIGHTS


969,677


778,442


24.6

OTHER ASSETS


15,742


10,624


48.2

    Total assets


$        3,409,908


$       3,023,015


12.8








LIABILITIES AND STOCKHOLDERS' EQUITY:














CURRENT LIABILITIES:







Floorplan notes payable - credit facility and other


$           960,871


$          968,959


(0.8)

    Offset account related to floorplan notes payable - credit facility


(47,709)


(112,261)


(57.5)

Floorplan notes payable - manufacturer affiliates


308,869


211,965


45.7

Current maturities of long-term debt and short-term financing


27,010


31,358


(13.9)

Accounts payable


201,699


167,439


20.5

Accrued expenses


133,777


128,118


4.4

    Total current liabilities


1,584,517


1,395,578


13.5

2.25% CONVERTIBLE SENIOR NOTES (aggregate principal of $182,753 at September 30, 2013 and December 31, 2012)


158,283


152,363


3.9

3.00% CONVERTIBLE SENIOR NOTES (aggregate principal of $115,000 at September 30, 2013 and December 31, 2012)


83,377


80,706


3.3

MORTGAGE FACILITY, net of current maturities


46,046


53,643


(14.2)

OTHER REAL ESTATE RELATED AND LONG-TERM DEBT, net of current maturities


228,271


232,285


(1.7)

CAPITAL LEASE OBLIGATIONS RELATED TO REAL ESTATE, net of current maturities


44,450


36,019


23.4

DEFERRED INCOME TAXES


136,664


94,130


45.2

LIABILITIES FROM INTEREST RATE RISK MANAGEMENT ACTIVITIES


29,184


43,089


(32.3)

OTHER LIABILITIES


46,200


42,413


8.9

COMMITMENTS AND CONTINGENCIES







TEMPORARY EQUITY - REDEEMABLE EQUITY PORTION OF THE 3.00% CONVERTIBLE SENIOR NOTES


29,974


32,505


(7.8)

STOCKHOLDERS' EQUITY:







Common stock


259


258


0.4

Additional paid-in capital


369,198


332,836


10.9

Retained earnings


758,498


677,864


11.9

Accumulated other comprehensive loss


(46,345)


(33,057)


40.2

Treasury stock


(58,668)


(117,617)


(50.1)

    Total stockholders' equity


1,022,942


860,284


18.9

    Total liabilities and stockholders' equity


$        3,409,908


$       3,023,015


12.8

 

 

Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)















Three Months Ended



Nine Months Ended




September 30,



September 30,




2013 (%)


2012 (%)



2013 (%)


2012 (%)

NEW VEHICLE UNIT SALES GEOGRAPHIC MIX: 










Region

Geographic Market










East

Massachusetts


5.5


9.6



5.9


10.0


New Jersey


4.1


5.0



4.2


5.0


Georgia


3.3


3.8



3.6


3.5


New Hampshire


2.6


2.8



2.4


2.9


New York


2.4


2.5



2.7


3.0


Louisiana


2.1


2.1



2.3


2.5


Mississippi


1.6


1.8



1.6


2.0


South Carolina


1.5


1.7



1.5


1.8


Florida


1.3


1.7



1.3


1.2


Alabama


0.8


0.9



0.8


1.0


Maryland


0.6


0.6



0.6


0.6




25.8


32.5



26.9


33.5












West

Texas


32.7


36.2



32.7


36.7


California


8.7


14.5



10.7


14.5


Oklahoma


8.0


8.0



7.8


7.8


Kansas


2.5


1.4



2.5


1.4




51.9


60.1



53.7


60.4












International

Brazil


12.1


-



10.2


-


United Kingdom


10.2


7.4



9.2


6.1




100.0


100.0



100.0


100.0












NEW VEHICLE UNIT SALES BRAND MIX:










Toyota/Scion/Lexus


26.9


30.8



27.0


30.9

Ford/Lincoln



12.3


8.8



11.8


9.2

Honda/Acura



11.6


11.1



12.1


11.2

BMW/MINI



11.1


10.1



10.7


10.7

Nissan/Infiniti



9.8


12.0



10.2


11.9

Volkswagen/Audi/Porsche


6.6


8.3



6.5


6.5

Hyundai/Kia



5.0


3.0



4.7


2.9

Chevrolet/GMC/Buick/Cadillac


4.6


5.5



4.8


5.8

Chrysler/Dodge/Jeep/RAM


3.9


4.3



4.0


4.4

Mercedes Benz/smart/Sprinter


3.8


4.3



4.2


4.6

Other



4.4


1.8



4.0


1.9




100.0


100.0



100.0


100.0

 

 


Group 1 Automotive, Inc.

Additional Information - U.S.

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended September 30,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$ 1,091,221


$ 1,048,894


4.0

Used vehicle retail sales


443,716


423,277


4.8

Used vehicle wholesale sales


59,833


63,337


(5.5)

    Total used


503,549


486,614


3.5

Parts and service


218,880


211,835


3.3

Finance and insurance


75,728


66,843


13.3

    Total 


$ 1,889,378


$ 1,814,186


4.1








GROSS MARGIN %:







New vehicle retail sales


5.0


5.7



Used vehicle retail sales


8.1


8.3



Used vehicle wholesale sales


(2.3)


(1.0)



    Total used


6.9


7.0



Parts and service


52.9


52.3



Finance and insurance


100.0


100.0



    Total


14.8


15.0










GROSS PROFIT:







New vehicle retail sales


$     54,086


$     59,662


(9.3)

Used vehicle retail sales


35,937


34,937


2.9

Used vehicle wholesale sales


(1,373)


(636)


115.9

    Total used


34,564


34,301


0.8

Parts and service


115,887


110,756


4.6

Finance and insurance


75,728


66,843


13.3

    Total 


$   280,265


$   271,562


3.2








UNITS SOLD:







Retail new vehicles sold


32,866


31,962


2.8

Retail used vehicles sold


22,206


21,084


5.3

Wholesale used vehicles sold


10,455


10,540


(0.8)

    Total used


32,661


31,624


3.3








AVERAGE RETAIL SALES PRICE:






New vehicle retail


$     33,202


$     32,817


1.2

Used vehicle retail


$     19,982


$     20,076


(0.5)








GROSS PROFIT PER UNIT SOLD:






New vehicle retail sales


$       1,646


$       1,867


(11.8)

Used vehicle retail sales


1,618


1,657


(2.4)

Used vehicle wholesale sales


(131)


(60)


118.3

    Total used


1,058


1,085


(2.5)

Finance and insurance (per retail unit)

$       1,375


$       1,260


9.1

OTHER: (1)







SG&A expenses


$   207,494


$   200,980


3.2

SG&A as % revenues


11.0


11.1



SG&A as % gross profit


74.0


74.0



Operating margin %


3.4


3.5



Pretax margin %


2.5


2.5










INTEREST EXPENSE:







Floorplan interest


$      (8,087)


$      (7,613)


6.2

Floorplan assistance


10,108


9,204


9.8

    Net floorplan (expense) income 

$       2,021


$       1,591


27.0







   Other interest expense, net

$      (9,650)


$      (9,417)


2.5

















Nine Months Ended September 30,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$ 3,132,461


$ 2,925,453


7.1

Used vehicle retail sales


1,310,629


1,236,285


6.0

Used vehicle wholesale sales


174,227


183,369


(5.0)

    Total used


1,484,856


1,419,654


4.6

Parts and service


659,318


626,515


5.2

Finance and insurance


216,184


186,417


16.0

    Total 


$ 5,492,819


$ 5,158,039


6.5








GROSS MARGIN %:







New vehicle retail sales


5.2


5.7



Used vehicle retail sales


8.5


8.6



Used vehicle wholesale sales


0.6


1.4



    Total used


7.6


7.7



Parts and service


53.2


52.5



Finance and insurance


100.0


100.0



    Total


15.4


15.4










GROSS PROFIT:







New vehicle retail sales


$   163,994


$   167,762


(2.2)

Used vehicle retail sales


111,897


106,498


5.1

Used vehicle wholesale sales


1,000


2,578


(61.2)

    Total used


112,897


109,076


3.5

Parts and service


350,608


328,791


6.6

Finance and insurance


216,184


186,417


16.0

    Total 


$   843,683


$   792,046


6.5








UNITS SOLD:







Retail new vehicles sold


94,233


89,525


5.3

Retail used vehicles sold


65,250


61,742


5.7

Wholesale used vehicles sold


30,052


29,849


0.7

    Total used


95,302


91,591


4.1








AVERAGE RETAIL SALES PRICE:






New vehicle retail


$     33,242


$     32,677


1.7

Used vehicle retail


$     20,086


$     20,023


0.3








GROSS PROFIT PER UNIT SOLD:






New vehicle retail sales


$       1,740


$       1,874


(7.2)

Used vehicle retail sales


1,715


1,725


(0.6)

Used vehicle wholesale sales


33


86


(61.6)

    Total used


1,185


1,191


(0.5)

Finance and insurance (per retail unit)

$       1,356


$       1,232


10.1








OTHER: (1)







SG&A expenses


$   619,562


$   592,295


4.6

SG&A as % revenues


11.3


11.5



SG&A as % gross profit


73.4


74.8



Operating margin %


3.7


3.5



Pretax margin %


2.7


2.5










INTEREST EXPENSE:







Floorplan interest


$    (25,027)


$    (22,641)


10.5

Floorplan assistance


28,291


25,276


11.9

    Net floorplan (expense) income

$       3,264


$       2,635


23.9







   Other interest expense, net

$    (27,991)


$    (27,405)


2.1








(1)

These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for the description of aforementioned adjustments.

 

 


Group 1 Automotive, Inc.

Additional Information - U.K.

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended September 30,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$136,740


$  92,392


48.0

Used vehicle retail sales


59,508


39,118


52.1

Used vehicle wholesale sales


16,959


15,087


12.4

    Total used


76,467


54,205


41.1

Parts and service


17,470


13,155


32.8

Finance and insurance


4,237


2,634


60.9

    Total 


$234,914


$162,386


44.7








GROSS MARGIN %:







New vehicle retail sales


5.7


7.5



Used vehicle retail sales


6.5


7.1



Used vehicle wholesale sales


(1.3)


(0.0)



    Total used


4.8


5.1



Parts and service


56.1


55.9



Finance and insurance


100.0


100.0



    Total


10.9


12.1










GROSS PROFIT:







New vehicle retail sales


$    7,848


$    6,888


13.9

Used vehicle retail sales


3,849


2,795


37.7

Used vehicle wholesale sales


(214)


(7)


2,957.1

    Total used


3,635


2,788


30.4

Parts and service


9,793


7,359


33.1

Finance and insurance


4,237


2,634


60.9

    Total 


$  25,513


$  19,669


29.7








UNITS SOLD:







Retail new vehicles sold


4,306


2,570


67.5

Retail used vehicles sold


2,510


1,349


86.1

Wholesale used vehicles sold


2,078


1,509


37.7

    Total used


4,588


2,858


60.5








AVERAGE RETAIL SALES PRICE:






New vehicle retail


$  31,756


$  35,950


(11.7)

Used vehicle retail


$  23,708


$  28,998


(18.2)








GROSS PROFIT PER UNIT SOLD:






New vehicle retail sales


$    1,823


$    2,680


(32.0)

Used vehicle retail sales


1,533


2,072


(26.0)

Used vehicle wholesale sales


(103)


(5)


1,960.0

    Total used


792


976


(18.9)

Finance and insurance (per retail unit)

$       622


$       672


(7.4)








OTHER: 







SG&A expenses


$  19,656


$  15,102


30.2

SG&A as % revenues


8.4


9.3



SG&A as % gross profit


77.0


76.8



Operating margin %


2.2


2.4



Pretax margin %


1.9


2.1










INTEREST EXPENSE:







Floorplan interest


$     (425)


$     (329)


29.2

Floorplan assistance


111


-


100.0

    Net floorplan (expense) income

$     (314)


$     (329)


(4.6)







  Other interest expense, net

$     (293)


$     (203)


44.3

















Nine Months Ended September 30,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$342,038


$209,138


63.5

Used vehicle retail sales


162,901


97,318


67.4

Used vehicle wholesale sales


48,682


35,046


38.9

    Total used


211,583


132,364


59.8

Parts and service


49,265


31,889


54.5

Finance and insurance


10,542


5,713


84.5

    Total 


$613,428


$379,104


61.8








GROSS MARGIN %:







New vehicle retail sales


6.3


7.4



Used vehicle retail sales


6.2


6.7



Used vehicle wholesale sales


(1.5)


(0.6)



    Total used


4.4


4.7



Parts and service


54.5


54.9



Finance and insurance


100.0


100.0



    Total


11.2


11.9










GROSS PROFIT:







New vehicle retail sales


$  21,641


$  15,450


40.1

Used vehicle retail sales


10,117


6,477


56.2

Used vehicle wholesale sales


(743)


(194)


283.0

    Total used


9,374


6,283


49.2

Parts and service


26,871


17,507


53.5

Finance and insurance


10,542


5,713


84.5

    Total 


$  68,428


$  44,953


52.2








UNITS SOLD:







Retail new vehicles sold


10,738


5,861


83.2

Retail used vehicles sold


6,762


3,444


96.3

Wholesale used vehicles sold


5,772


3,438


67.9

    Total used


12,534


6,882


82.1








AVERAGE RETAIL SALES PRICE:






New vehicle retail


$  31,853


$  35,683


(10.7)

Used vehicle retail


$  24,091


$  28,257


(14.7)








GROSS PROFIT PER UNIT SOLD:






New vehicle retail sales


$    2,015


$    2,636


(23.6)

Used vehicle retail sales


1,496


1,881


(20.5)

Used vehicle wholesale sales


(129)


(56)


130.4

    Total used


748


913


(18.1)

Finance and insurance (per retail unit)

$       602


$       614


(2.0)








OTHER: (1)







SG&A expenses


$  54,120


$  35,647


51.8

SG&A as % revenues


8.8


9.4



SG&A as % gross profit


79.1


79.3



Operating margin %


2.0


2.0



Pretax margin %


1.7


1.7










INTEREST EXPENSE:







Floorplan interest


$   (1,152)


$     (784)


46.9

Floorplan assistance


111


-


100.0

    Net floorplan (expense) income

$   (1,041)


$     (784)


32.8







  Other interest expense, net

$     (800)


$     (443)


80.6








(1)

These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for the description of aforementioned adjustments.

 

 


Group 1 Automotive, Inc.

Additional Information - Brazil

(Unaudited)

(Dollars in thousands, except per unit amounts)


Three Months Ended
September 30, 2013

REVENUES:



New vehicle retail sales


$                                         158,706

Used vehicle retail sales


26,604

Used vehicle wholesale sales


9,008

    Total used


35,612

Parts and service


18,966

Finance and insurance


2,571

    Total 


$                                         215,855




GROSS MARGIN %:



New vehicle retail sales


7.2

Used vehicle retail sales


6.4

Used vehicle wholesale sales


0.6

    Total used


4.9

Parts and service


42.2

Finance and insurance


100.0

    Total


11.0




GROSS PROFIT:



New vehicle retail sales


$                                           11,361

Used vehicle retail sales


1,696

Used vehicle wholesale sales


53

    Total used


1,749

Parts and service


8,003

Finance and insurance


2,571

    Total 


$                                           23,684




UNITS SOLD:



Retail new vehicles sold


5,139

Retail used vehicles sold


1,343

Wholesale used vehicles sold


912

    Total used


2,255




AVERAGE RETAIL SALES PRICE:



New vehicle retail


$                                           30,883

Used vehicle retail


$                                           19,809




GROSS PROFIT PER UNIT SOLD:



New vehicle retail sales


$                                             2,211

Used vehicle retail sales


1,263

Used vehicle wholesale sales


58

    Total used


776

Finance and insurance (per retail unit)


$                                                397




OTHER: (1)



SG&A expenses


$                                           20,277

SG&A as % revenues


9.4

SG&A as % gross profit


85.6

Operating margin %


1.4

Pretax margin %


0.3




INTEREST EXPENSE:



Floorplan interest


$                                           (2,178)

Floorplan assistance


-

    Net floorplan (expense) income


$                                           (2,178)




     Other interest expense, net 


$                                                (29)






Nine Months Ended
September 30, 2013 (2)






REVENUES:



New vehicle retail sales


$                                         398,622

Used vehicle retail sales


62,501

Used vehicle wholesale sales


20,758

    Total used


83,259

Parts and service


45,193

Finance and insurance


5,768

    Total 


$                                         532,842




GROSS MARGIN %:



New vehicle retail sales


7.7

Used vehicle retail sales


5.2

Used vehicle wholesale sales


5.5

    Total used


5.3

Parts and service


40.5

Finance and insurance


100.0

    Total


11.1




GROSS PROFIT:



New vehicle retail sales


$                                           30,661

Used vehicle retail sales


3,249

Used vehicle wholesale sales


1,143

    Total used


4,392

Parts and service


18,293

Finance and insurance


5,768

    Total 


$                                           59,114




UNITS SOLD:



Retail new vehicles sold


11,967

Retail used vehicles sold


2,919

Wholesale used vehicles sold


2,028

    Total used


4,947




AVERAGE RETAIL SALES PRICE:



New vehicle retail


$                                           33,310

Used vehicle retail


$                                           21,412




GROSS PROFIT PER UNIT SOLD:



New vehicle retail sales


$                                             2,562

Used vehicle retail sales


1,113

Used vehicle wholesale sales


564

    Total used


888

Finance and insurance (per retail unit)


$                                                387




OTHER: (1)



SG&A expenses


$                                           48,748

SG&A as % revenues


9.1

SG&A as % gross profit


82.5

Operating margin %


1.7

Pretax margin %


0.9




INTEREST EXPENSE:



Floorplan interest


$                                           (4,748)

Floorplan assistance


-

    Net floorplan (expense) income


$                                           (4,748)




     Other interest income, net 


$                                                    7




(1)

These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.



(2)

Results are for the period from the date of acquisition (February 28, 2013) through September 30, 2013.

 

 


Group 1 Automotive, Inc.

Additional Information - Consolidated

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended September 30,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$                               1,386,667


$                               1,141,286


21.5

Used vehicle retail sales


529,828


462,395


14.6

Used vehicle wholesale sales


85,800


78,424


9.4

    Total used


615,628


540,819


13.8

Parts and service


255,316


224,990


13.5

Finance and insurance


82,536


69,477


18.8

    Total 


$                               2,340,147


$                               1,976,572


18.4








GROSS MARGIN %:







New vehicle retail sales


5.3


5.8



Used vehicle retail sales


7.8


8.2



Used vehicle wholesale sales


(1.8)


(0.8)



    Total used


6.5


6.9



Parts and service


52.4


52.5



Finance and insurance


100.0


100.0



    Total


14.1


14.7










GROSS PROFIT:







New vehicle retail sales


$                                    73,295


$                                    66,550


10.1

Used vehicle retail sales


41,482


37,732


9.9

Used vehicle wholesale sales


(1,534)


(643)


138.6

    Total used


39,948


37,089


7.7

Parts and service


133,683


118,115


13.2

Finance and insurance


82,536


69,477


18.8

    Total 


$                                  329,462


$                                  291,231


13.1








UNITS SOLD:







Retail new vehicles sold


42,311


34,532


22.5

Retail used vehicles sold


26,059


22,433


16.2

Wholesale used vehicles sold


13,445


12,049


11.6

    Total used


39,504


34,482


14.6








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$                                    32,773


$                                    33,050


(0.8)

Used vehicle retail


$                                    20,332


$                                    20,612


(1.4)








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$                                      1,732


$                                      1,927


(10.1)

Used vehicle retail sales


1,592


1,682


(5.4)

Used vehicle wholesale sales


(114)


(53)


115.1

    Total used


1,011


1,076


(6.0)

Finance and insurance (per retail unit)


$                                      1,207


$                                      1,220


(1.1)

OTHER: (1)







SG&A expenses


$                                  247,427


$                                  216,082


14.5

SG&A as % revenues


10.6


10.9



SG&A as % gross profit


75.1


74.2



Operating margin %


3.1


3.4



Pretax margin %


2.2


2.5










INTEREST EXPENSE:







Floorplan interest


$                                  (10,690)


$                                    (7,942)


34.6

Floorplan assistance


10,219


9,204


11.0

    Net floorplan (expense) income


$                                       (471)


$                                      1,262


(137.3)








     Other interest expense, net


$                                    (9,971)


$                                    (9,619)


3.7

















Nine Months Ended September 30,



2013


2012


% Change

REVENUES:







New vehicle retail sales


$                               3,873,121


$                               3,134,591


23.6

Used vehicle retail sales


1,536,031


1,333,603


15.2

Used vehicle wholesale sales


243,667


218,415


11.6

    Total used


1,779,698


1,552,018


14.7

Parts and service


753,776


658,404


14.5

Finance and insurance


232,494


192,130


21.0

    Total 


$                               6,639,089


$                               5,537,143


19.9








GROSS MARGIN %:







New vehicle retail sales


5.6


5.8



Used vehicle retail sales


8.2


8.5



Used vehicle wholesale sales


0.6


1.1



    Total used


7.1


7.4



Parts and service


52.5


52.6



Finance and insurance


100.0


100.0



    Total


14.6


15.1










GROSS PROFIT:







New vehicle retail sales


$                                  216,296


$                                  183,212


18.1

Used vehicle retail sales


125,263


112,975


10.9

Used vehicle wholesale sales


1,400


2,384


(41.3)

    Total used


126,663


115,359


9.8

Parts and service


395,772


346,298


14.3

Finance and insurance


232,494


192,130


21.0

    Total 


$                                  971,225


$                                  836,999


16.0








UNITS SOLD:







Retail new vehicles sold


116,938


95,386


22.6

Retail used vehicles sold


74,931


65,186


14.9

Wholesale used vehicles sold


37,852


33,287


13.7

    Total used


112,783


98,473


14.5








AVERAGE RETAIL SALES PRICE:







New vehicle retail


$                                    33,121


$                                    32,862


0.8

Used vehicle retail


$                                    20,499


$                                    20,458


0.2








GROSS PROFIT PER UNIT SOLD:







New vehicle retail sales


$                                      1,850


$                                      1,921


(3.7)

Used vehicle retail sales


1,672


1,733


(3.5)

Used vehicle wholesale sales


37


72


(48.6)

    Total used


1,123


1,171


(4.1)

Finance and insurance (per retail unit)


$                                      1,212


$                                      1,197


1.3








OTHER: (1)







SG&A expenses


$                                  722,430


$                                  627,942


15.0

SG&A as % revenues


10.9


11.3



SG&A as % gross profit


74.4


75.0



Operating margin %


3.3


3.4



Pretax margin %


2.5


2.4










INTEREST EXPENSE:







Floorplan interest


$                                  (30,927)


$                                  (23,424)


32.0

Floorplan assistance


28,402


25,276


12.4

    Net floorplan (expense) income


$                                    (2,525)


$                                      1,852


(236.3)








     Other interest expense, net


$                                  (28,783)


$                                  (27,849)


3.4








(1)

These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

 


Group 1 Automotive, Inc.

Additional Information - Same Store(1)

(Unaudited)

(Dollars in thousands, except per unit amounts)










Three Months Ended September 30,



2013


2012


% Change

REVENUES:






New vehicle retail sales

$                  1,148,915


$      1,066,782


7.7

Used vehicle retail sales

467,093


438,868


6.4

Used vehicle wholesale sales

70,965


73,767


(3.8)

    Total used

538,058


512,635


5.0

Parts and service

226,981


210,261


8.0

Finance and insurance

75,779


66,200


14.5

    Total 

$                  1,989,733


$      1,855,878


7.2








GROSS MARGIN %:






New vehicle retail sales

5.1


5.9



Used vehicle retail sales

7.8


8.2



Used vehicle wholesale sales

(1.5)


(0.6)



    Total used

6.6


6.9



Parts and service

53.3


52.5



Finance and insurance

100.0


100.0



    Total

14.6


14.8










GROSS PROFIT:






New vehicle retail sales

$                       58,652


$           63,355


(7.4)

Used vehicle retail sales

36,585


35,890


1.9

Used vehicle wholesale sales

(1,059)


(478)


121.5

    Total used

35,526


35,412


0.3

Parts and service

120,894


110,366


9.5

Finance and insurance

75,779


66,200


14.5

    Total 

$                     290,851


$         275,333


5.6



-


-



UNITS SOLD:






Retail new vehicles sold

34,174


31,904


7.1

Retail used vehicles sold

22,478


21,103


6.5

Wholesale used vehicles sold

11,313


11,107


1.9

    Total used

33,791


32,210


4.9








AVERAGE RETAIL SALES PRICE:






New vehicle retail

$                       33,620


$           33,437


0.5

Used vehicle retail

$                       20,780


$           20,796


(0.1)








GROSS PROFIT PER UNIT SOLD:






New vehicle retail sales

$                         1,716


$             1,986


(13.6)

Used vehicle retail sales

1,628


1,701


(4.3)

Used vehicle wholesale sales

(94)


(43)


118.6

    Total used

1,051


1,099


(4.4)

Finance and insurance (per retail unit)

$                         1,338


$             1,249


7.1







OTHER: (2)






SG&A expenses

$                     214,197


$         201,034


6.5

SG&A as % revenues

10.8


10.8



SG&A as % gross profit

73.6


73.0



Operating margin % 

3.4


3.6












Nine Months Ended September 30,



2013


2012


% Change

REVENUES:






New vehicle retail sales

$                  3,233,449


$      3,003,079


7.7

Used vehicle retail sales

1,354,555


1,285,471


5.4

Used vehicle wholesale sales

201,109


208,297


(3.5)

    Total used

1,555,664


1,493,768


4.1

Parts and service

677,732


631,012


7.4

Finance and insurance

214,889


186,140


15.4

    Total 

$                  5,681,734


$      5,313,999


6.9








GROSS MARGIN %:






New vehicle retail sales

5.3


5.9



Used vehicle retail sales

8.3


8.5



Used vehicle wholesale sales

0.7


1.2



    Total used

7.3


7.5



Parts and service

53.2


52.6



Finance and insurance

100.0


100.0



    Total

15.2


15.2










GROSS PROFIT:






New vehicle retail sales

$                     172,909


$         177,133


(2.4)

Used vehicle retail sales

112,026


109,286


2.5

Used vehicle wholesale sales

1,357


2,591


(47.6)

    Total used

113,383


111,877


1.3

Parts and service

360,462


331,692


8.7

Finance and insurance

214,889


186,140


15.4

Total 

$                     861,643


$         806,842


6.8



-


-



UNITS SOLD:






Retail new vehicles sold

96,154


90,695


6.0

Retail used vehicles sold

65,254


62,505


4.4

Wholesale used vehicles sold

31,852


31,287


1.8

    Total used

97,106


93,792


3.5








AVERAGE RETAIL SALES PRICE:






New vehicle retail

$                       33,628


$           33,112


1.6

Used vehicle retail

$                       20,758


$           20,566


0.9








GROSS PROFIT PER UNIT SOLD:






New vehicle retail sales

$                         1,798


$             1,953


(7.9)

    Used vehicle retail sales

1,717


1,748


(1.8)

    Used vehicle wholesale sales

43


83


(48.2)

    Total used

1,168


1,193


(2.1)

    Finance and insurance (per retail unit)

$                         1,331


$             1,215


9.5








OTHER: (2)






SG&A expenses

$                     630,048


$         598,533


5.3

SG&A as % revenues

11.1


11.3



SG&A as % gross profit

73.1


74.2



Operating margin % 

3.7


3.5










(1)

Same store amounts include the results for the identical months in each period presented in the comparison, commencing with the first full month we owned the dealership and, in the case of dispositions, ending with the last full month we owned it. Same store results also include the activities of our corporate office.



(2)

These amounts have been adjusted to exclude the impact of certain items to provide additional information regarding the performance of our operations and improve period-to-period comparability. Refer to our Reconciliation of Certain Non-GAAP Financial Measures for a description of the aforementioned adjustments.

 

 


Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - Consolidated

(Unaudited)

 (Dollars in thousands, except per share amounts)

















Three Months Ended September 30,

NET INCOME RECONCILIATION:

2013


2012


% Change









As reported

$              32,765


$             31,335


4.6


  After-tax adjustments:







    Catastrophic events (3)

158


-




    Net gain on dealership dispositions (4)

(230)


-




    Non-cash asset impairment (6)

349


-




    Severance paid (11)

454


-




    Income tax effect of acquisition costs

(630)


-




        Adjusted net income (1)

$              32,866


$             31,335


4.9




ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED






COMMON SHARES RECONCILIATION:














Adjusted net income

$              32,866


$             31,335


4.9


Less: Adjusted earnings allocated to participating securities

1,324


1,641


(19.3)


Adjusted net income available to diluted common shares

$              31,542


$             29,694


6.2








DILUTED INCOME PER COMMON SHARE RECONCILIATION:














As reported

$                  1.19


$                 1.32


(9.8)


  After-tax adjustments:







    Catastrophic events

0.01


-




    Net gain on dealership dispositions

(0.01)


-




    Non-cash asset impairment

0.01


-




    Severance paid

0.02


-




    Income tax effect of acquisition costs

(0.02)


-




        Adjusted diluted income per share (1)

$                  1.20


$                 1.32


(9.1)








SG&A RECONCILIATION:














As reported

$            246,863


$           216,082


14.2


  Pre-tax adjustments:







    Catastrophic events

(258)


-




    Net gain on dealership dispositions

1,373


-




    Severance paid

(551)


-




        Adjusted SG&A (1)

$            247,427


$           216,082


14.5








SG&A AS % REVENUES:














Unadjusted

10.5


10.9




Adjusted (1)

10.6


10.9










SG&A AS % GROSS PROFIT:














Unadjusted

74.9


74.2




Adjusted (1)

75.1


74.2










OPERATING MARGIN %














Unadjusted

3.1


3.4




Adjusted (1), (7)

3.1


3.4










PRETAX MARGIN %:














Unadjusted

2.2


2.5




Adjusted (1), (8)

2.2


2.5










SAME STORE SG&A RECONCILIATION:














As reported

$            214,526


$           201,034


6.7


  Pre-tax adjustments:







    Catastrophic events

(258)


-




    Severance paid

(71)


-




        Adjusted Same Store SG&A (1)

$            214,197


$           201,034


6.5








SAME STORE SG&A AS % REVENUES:














Unadjusted

10.8


10.8




Adjusted (1)

10.8


10.8










SAME STORE SG&A AS % GROSS PROFIT:














Unadjusted

73.8


73.0




Adjusted (1)

73.6


73.0










SAME STORE OPERATING MARGIN %:














Unadjusted

3.4


3.6




Adjusted (1), (9)

3.4


3.6



















 Nine Months Ended September 30, 

NET INCOME RECONCILIATION:

2013


2012


 % Change 









As reported

$              92,271


$             83,077


11.1


  After-tax adjustments:







    Acquisition costs(2)

4,638


-




    Catastrophic events (3)

7,419


1,658




    Net gain on dealership dispositions (4)

(5,500)


-




    Lease termination (5)

124


-




    Non-cash asset impairment (6)

718


115




    Net gain on real estate transactions (10)

-


(659)




    Severance paid (11)

454


-




    Income tax effect of acquisition costs

1,699


-




        Adjusted net income (1)

$            101,823


$             84,191


20.9




ADJUSTED NET INCOME ATTRIBUTABLE TO DILUTED






COMMON SHARES RECONCILIATION:














Adjusted net income

$            101,823


$             84,191


20.9


Less: Adjusted earnings allocated to participating securities

4,241


4,432


(4.3)


Adjusted net income available to diluted common shares

$              97,582


$             79,759


22.3








DILUTED INCOME PER COMMON SHARE RECONCILIATION:














As reported

$                  3.52


$                 3.50


0.6


  After-tax adjustments:







    Acquisition costs 

0.17


-




    Catastrophic events 

0.28


0.07




    Net gain on dealership dispositions

(0.21)


-




    Lease termination

-


-




    Non-cash asset impairment 

0.03


-




    Net gain on real estate transactions

-


(0.03)




    Severance paid

0.02


-




    Income tax effect of acquisition costs

0.07


-




        Adjusted diluted income per share (1)

$                  3.88


$                 3.54


9.6








SG&A RECONCILIATION:














As reported

$            731,455


$           629,521


16.2


  Pre-tax adjustments:







    Acquisition costs

(6,512)


-




    Catastrophic events

(12,158)


(2,650)




    Net gain on dealership dispositions

10,396


-




    Severance paid

(551)


-




    Lease termination

(200)


-




    Net gain on real estate transactions

-


1,071




        Adjusted SG&A (1)

$            722,430


$           627,942


15.0








SG&A AS % REVENUES:














Unadjusted

11.0


11.4




Adjusted (1)

10.9


11.3










SG&A AS % OF GROSS PROFIT:














Unadjusted

75.3


75.2




Adjusted (1)

74.4


75.0










OPERATING MARGIN %:














Unadjusted

3.2


3.3




Adjusted (1), (7)

3.3


3.4










PRETAX MARGIN %:














Unadjusted

2.3


2.4




Adjusted (1), (8)

2.5


2.4










SAME STORE SG&A RECONCILIATION:














As reported

$            647,778


$           601,687


7.7


  Pre-tax adjustments:







    Acquisition costs

(5,301)


-




    Catastrophic events

(12,158)


(2,650)




    Severance paid

(71)


-




    Loss on real estate transaction

-


(504)




    Lease termination

(200)


-




        Adjusted Same Store SG&A (1)

$            630,048


$           598,533


5.3








SAME STORE SG&A AS % REVENUES:














Unadjusted

11.4


11.3




Adjusted (1)

11.1


11.3










SAME STORE SG&A AS % OF GROSS PROFIT:














Unadjusted

75.2


74.6




Adjusted (1)

73.1


74.2










SAME STORE OPERATING MARGIN %:














Unadjusted

3.3


3.4




Adjusted (1), (9)

3.7


3.5










(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 



(2)

Adjustment is net of tax benefit of $2,663 for the nine months ended September 30, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.



(3)

Adjustment is net of tax benefit of $100 and $4,739 for the three and nine months ended September 30, 2013, and $992 for the nine months ended September 30, 2012, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.



(4)

Adjustment is net of tax provision of $1,143 and $4,896 for the three and nine months ended September 30, 2013, respectively, calculated utilizing the applicable federal and state tax rates for the adjustment.



(5)

Adjustment is net of tax benefit of $76 for the nine months ended September 30, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.



(6)

Adjustment is net of tax benefit of $216 and $456 for the three and nine months ended September 30, 2013, and $72 for the nine months ended September 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment.



(7)

Excludes the impact of SG&A reconciling items above, as well as non-cash asset impairment charges for all periods except three months ended September 30, 2012.



(8)

Excludes the impact of SG&A reconciling items above, non-cash asset impairment charges for all periods, as well as the other expense, net of $789, for the nine months ended September 30, 2013.



(9)

Excludes the impact of Same Store SG&A reconciling items above, as well as Same Store non-cash asset impairment charges of $565 and $1,174 for the three and nine months ended September 30, 2013, and $187 for the nine months ended September 30, 2012.



(10)

Adjustment is net of tax provision of $412 for the nine months ended September 30, 2012, calculated utilizing the applicable federal and state tax rates for the adjustment.



(11)

Adjustment is net of tax benefit of $97 for the three and nine months ended September 30, 2013, calculated utilizing the applicable federal and state tax rates for the adjustment.

 

 


Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - U.S.

(Unaudited)

 (Dollars in thousands, except per share amounts)










Three Months Ended September 30,



2013


2012


% Change

SG&A RECONCILIATION:














As reported

$            206,635


$             200,980


2.8


  Pre-tax adjustments:







    Catastrophic events

(258)


-




    Net gain on dealership dispositions

1,373


-




    Severance paid

(256)


-




        Adjusted SG&A (1)

$            207,494


$             200,980


3.2








SG&A AS % REVENUES:














Unadjusted

10.9


11.1




Adjusted (1)

11.0


11.1










SG&A AS % GROSS PROFIT:














Unadjusted

73.7


74.0




Adjusted (1)

74.0


74.0










OPERATING MARGIN %














Unadjusted

3.4


3.5




Adjusted (1), (2)

3.4


3.5










PRETAX MARGIN %:














Unadjusted

2.5


2.5




Adjusted (1), (2)

2.5


2.5












 Nine Months Ended September 30, 



2013


2012


 % Change 

SG&A RECONCILIATION:














As reported

$            626,939


$             593,874


5.6


  Pre-tax adjustments:







    Acquisition costs

(5,159)


-




    Catastrophic events

(12,158)


(2,650)




    Net gain on dealership dispositions

10,396


-




    Net gain on real estate transactions

-


1,071




    Severance paid

(256)


-




    Lease termination

(200)


-




        Adjusted SG&A (1)

$            619,562


$             592,295


4.6








SG&A AS % REVENUES:














Unadjusted

11.4


11.5




Adjusted (1)

11.3


11.5










SG&A AS % OF GROSS PROFIT:














Unadjusted

74.3


75.0




Adjusted (1)

73.4


74.8










OPERATING MARGIN %:














Unadjusted

3.5


3.4




Adjusted (1), (2)

3.7


3.5










PRETAX MARGIN %:














Unadjusted

2.5


2.5




Adjusted (1), (2)

2.7


2.5










(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 



(2)

Excludes the impact of SG&A reconciling items above, as well as asset impairments of $565 and $1,174 for the three and nine months ended September 30, 2013, and $187 for the nine months ended September 30, 2012.

 

 


Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - U.K.

(Unaudited)

 (Dollars in thousands, except per share amounts)










 Nine Months Ended September 30, 



2013


2012


 % Change 

SG&A RECONCILIATION:














As reported

$              54,262


$               35,647


52.2


  Pre-tax adjustments:







    Acquisition costs

(142)


-




        Adjusted SG&A (1)

$              54,120


$               35,647


51.8








SG&A AS % REVENUES:














Unadjusted

8.8


9.4




Adjusted (1)

8.8


9.4










SG&A AS % OF GROSS PROFIT:














Unadjusted

79.3


79.3




Adjusted (1)

79.1


79.3










OPERATING MARGIN %:














Unadjusted

2.0


2.0




Adjusted (1), (2)

2.0


2.0










PRETAX MARGIN %:














Unadjusted

1.7


1.7




Adjusted (1), (2)

1.7


1.7










(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 



(2)

Excludes the impact of SG&A reconciling item above.

 

 


Group 1 Automotive, Inc.

Reconciliation of Certain Non-GAAP Financial Measures - Brazil

(Unaudited)

 (Dollars in thousands, except per share amounts)



Three Months Ended
September 30,


2013



SG&A RECONCILIATION:






As reported

$                                   20,572


  Pre-tax adjustments:



    Severance paid

(295)


        Adjusted SG&A (1)

$                                   20,277




SG&A AS % REVENUES:






Unadjusted

9.5


Adjusted (1)

9.4




SG&A AS % GROSS PROFIT:






Unadjusted

86.9


Adjusted (1)

85.6




OPERATING MARGIN %






Unadjusted

1.2


Adjusted (1), (2)

1.4




PRETAX MARGIN %:






Unadjusted

0.2


Adjusted (1), (3)

0.3






Nine Months Ended
September 30,



2013 (4)

SG&A RECONCILIATION:






As reported

$                                    50,254


  Pre-tax adjustments:



    Acquisition costs

(1,211)


    Severance paid

(295)


        Adjusted SG&A (1)

$                                    48,748




SG&A AS % REVENUES:






Unadjusted

9.4


Adjusted (1)

9.1




SG&A AS % OF GROSS PROFIT:






Unadjusted

85.0


Adjusted (1)

82.5




OPERATING MARGIN %:






Unadjusted

1.5


Adjusted (1), (2)

1.7




PRETAX MARGIN %:






Unadjusted

0.4


Adjusted (1), (3)

0.9




(1)

We have included certain non-GAAP financial measures as defined under SEC rules, which exclude certain items.  These adjusted measures are not measures of financial performance under GAAP.  As required by SEC rules, we provide reconciliations of these adjusted measures to the most directly comparable GAAP measures.  We believe that these adjusted financial measures are relevant and useful to investors because they improve the transparency of our disclosure, provide a meaningful presentation of results from our core business operations and improve period-to-period comparability of our results from our core business operations. 



(2)

Excludes the impact of SG&A reconciling items above.



(3)

Excludes the impact of SG&A reconciling items above, as well as the other expense, net of $789, for the period from the date of acquisition (February 28, 2013) through September 30, 2013.



(4)

Results are for the period from the date of acquisition through September 30, 2013.

SOURCE Group 1 Automotive, Inc.



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