AutoNation Reports All-Time Record Quarterly and Full Year EPS

FORT LAUDERDALE, Fla., Feb. 17, 2022 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's largest and most recognized automotive retailer, today reported its seventh consecutive record quarterly EPS. Fourth quarter 2021 revenue was $6.6 billion, an increase of 14%, driven by used vehicle revenue which increased 55%, more than offsetting the decline in new vehicle revenue of 7%, each as compared to the same period a year ago.  Full year revenue was $25.8 billion, an increase of 27% compared to the same period a year ago.  

Fourth quarter 2021 GAAP EPS was a record $5.87, an increase of 239% compared to fourth quarter 2020 GAAP EPS of $1.73. Fourth quarter 2021 adjusted EPS was $5.76, an increase of 137% compared to fourth quarter 2020 adjusted EPS of $2.43. For the full year 2021, GAAP EPS was a record of $18.31, an increase of 326% compared to full year 2020 GAAP EPS of $4.30. Full year 2021 adjusted EPS was $18.14, an increase of 155% compared to full year 2020 adjusted EPS of $7.11. Reconciliations of non-GAAP financial measures are included in the attached financial tables.

Operational Summary
Fourth quarter 2021 Operational Summary:

• Revenue – Revenue was $6.6 billion, an increase of 14% compared to the year-ago period.
• New Vehicle Revenue – New vehicle revenue declined 7% compared to the year-ago period.
• Used Vehicle Revenue– Used vehicle revenue increased 55% compared to the year-ago period.
• Gross Profit - Gross profit totaled $1.3 billion, an increase of 34% compared to the year-ago period.
• New Vehicle Gross Profit - New vehicle gross profit per vehicle retailed was $6,450, up $3,675 or 132% compared to the year-ago period.
• Used Vehicle Gross Profit - Used vehicle gross profit per vehicle retailed was $2,063, up $496 or 32% compared to the year-ago period.
• Customer Financial Services Gross Profit - Customer Financial Services gross profit per vehicle retailed was $2,678, up $469 or 21% compared to the year-ago period.
• After-Sales Gross Profit - After-Sales gross profit was $426 million, an increase of 11% compared to the year-ago period.
• SG&A as a Percentage of Gross Profit –SG&A as a percentage of gross profit was 57.2%, and adjusted SG&A as a percentage of gross profit was 56.7%, an improvement of 710 basis points compared to adjusted SG&A as a percentage of gross profit of 63.8% in the prior year period.

"Our record results were driven by the exceptional performance of our team members from coast to coast, evidenced by our used vehicle revenue which increased 55% and our used vehicle retail unit sales which increased 21% compared to the prior year. We expect consumer demand for personal vehicle ownership to remain strong for the foreseeable future and we are accelerating our self-sustaining used vehicle business to meet this demand through our sourcing capabilities, selection of vehicles, footprint, digital tools, and core efficiencies," Mike Manley, AutoNation Chief Executive Officer.

Digital
Over 50% of AutoNation unit sales originated on its digital channels for the full year 2021. The Company has built a compelling Customer value proposition through the combination of its digital tools and physical assets. Leveraging AutoNation Express, its integrated digital solution, powered by nearly 11 million real-time Customer insights, AutoNation has created a personalized digital experience and has further reduced friction for Customers' online and in-store buying experience. They can start online, pick up in-store, or get a vehicle delivered, and Associates will be ready to assist. AutoNation is transforming how personal mobility is perceived and experienced by keeping Customers in the driver's seat.

Used Vehicle Growth Strategy
AutoNation's fourth quarter and full year 2021 used vehicle retail unit sales increased 21% and 26% respectively, compared to the prior year periods. This strong performance was driven by exceptional used vehicle sourcing, a broad selection of inventory, a proven operating model, demonstrated digital scale, and an admired brand. AutoNation will continue to expand its used vehicle retail business, leveraging its existing capabilities and AutoNation USA growth plan, coupled with rich data and analytics. These core elements will accelerate growth and further differentiate the Company in the used vehicle market.

The Company opened its ninth AutoNation USA store in November in Phoenix, Arizona, and most recently entered a new market with its tenth AutoNation USA store in Charlotte, North Carolina. The Company plans to open 12 additional new stores over the next 12 months. These stores will continue to leverage the AutoNation brand, scale, and proven Customer-centric processes to capture a larger share of the used vehicle market.

Share Repurchase
During the fourth quarter of 2021, AutoNation repurchased 3.1 million shares of common stock for an aggregate purchase price of $382 million. AutoNation has approximately $776 million remaining Board authorization for share repurchase as of February 15, 2022. As of February 15, 2022, AutoNation had approximately 62 million shares outstanding.

Liquidity and Leverage
As of December 31, 2021, AutoNation had $1.5 billion of liquidity, including $60 million in cash and approximately $1.4 billion of availability under its revolving credit facility. The Company's covenant leverage ratio was 1.5x at quarter-end. AutoNation had approximately $3.2 billion of non-vehicle debt outstanding as of December 31, 2021.

Segment Results
Segment results⁽¹⁾ for the fourth quarter of 2021 were as follows:

Fourth Quarter 2021 Segment Results

• Domestic - Domestic segment income⁽²⁾ was $159 million compared to year-ago segment income of $107 million, an increase of 49%. 
• Import - Import segment income⁽²⁾ was $184 million compared to year-ago segment income of $109 million, an increase of 70%. 
• Premium Luxury - Premium Luxury segment income⁽²⁾ was $247 million compared to year-ago segment income of $165 million, an increase of 50%.

Full Year 2021 Segment Results

• Domestic - Domestic segment income⁽²⁾ was $596 million compared to year-ago segment income of $355 million, an increase of 68%. 
• Import - Import segment income⁽²⁾ was $715 million compared to year-ago segment income of $386 million, an increase of 85%. 
• Premium Luxury - Premium Luxury segment income⁽²⁾ was $837 million compared to year-ago segment income of $478 million, an increase of 75%.

The fourth quarter conference call may be accessed by telephone at 844-200-6205 (Conference ID:819892) at 10:00 a.m. Eastern Time today or on AutoNation's investor relations website at investors.autonation.com.

The webcast will also be available on AutoNation's website under "Events & Presentations" following the call. A playback of the conference call will be available after 1:00 p.m. Eastern Time on February 17, 2022, through March 10, 2022, by calling 866-813-9403 (Conference ID: 562352). Additional information regarding AutoNation's results can be found in the Investor Presentation available at: investors.autonation.com.

About AutoNation, Inc.
AutoNation, a provider of personalized transportation services, is driven by innovation and transformation. As one of America's most admired companies, AutoNation delivers a peerless customer experience recognized by data-driven consumer insight leaders, Reputation and J.D. Power. Through its bold leadership and brand affinity, the AutoNation Brand is synonymous with "DRVPNK" and "What Drives You, Drives Us." AutoNation has a singular focus on personalized transportation services that are easy, transparent, and customer-centric. 

Please visit www.autonation.com, investors.autonation.com, and www.twitter.com/AutoNation, where AutoNation discloses additional information about the Company, its business, and its results of operations. Please also visit www.autonationdrive.com, AutoNation's automotive blog, for information regarding the AutoNation community, the automotive industry, and current automotive news and trends.

NON-GAAP FINANCIAL MEASURES
This news release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, which exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP measures. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure, provide a meaningful presentation of the Company's results 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. Non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated and presented in accordance with GAAP.

FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Words such as "anticipates," "expects," "intends," "goals," "targets," "projects," "plans," "believes," "continues," "may," "will," "could," and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements regarding our strategic initiatives, partnerships, or investments, including the planned expansion of our AutoNation USA pre-owned vehicle stores and our investments in digital and online capabilities, statements regarding our expectations for the future performance of our business and the automotive retail industry, and other statements that describe our objectives, goals, or plans, are forward-looking statements. Our forward-looking statements reflect our current expectations concerning future results and events, and they involve known and unknown risks, uncertainties, and other factors that are difficult to predict and may cause our actual results, performance, or achievements to be materially different from any future results, performance, and achievements expressed or implied by these statements. These risks, uncertainties, and other factors include, among others: our ability to implement successfully our strategic initiatives, partnerships, and investments, including the planned expansion of our AutoNation USA stores; our ability to identify, acquire, and build out suitable locations in a timely manner; our ability to develop successfully our digital and online capabilities; our ability to maintain and enhance our retail brands and reputation and to attract consumers to our own digital channels; our ability to acquire and integrate successfully new franchises; restrictions imposed by vehicle manufacturers and our ability to obtain manufacturer approval for acquisitions; economic conditions, including changes in unemployment, interest, and/or inflation rates, consumer demand, fuel prices, and tariffs; supply chain disruptions and inventory availability; new and used vehicle margins; our ability to attain planned sales volumes within our expected time frames; our ability to successfully implement and maintain expense controls; the success and financial viability and the incentive and marketing programs of vehicle manufacturers and distributors with which we hold franchises; the response by federal, state, and local governments and other parties to, and the economic impacts of, the COVID-19 pandemic; natural disasters and other adverse weather events; the resolution of legal and administrative proceedings; regulatory factors affecting our business, including fuel economy requirements; the announcement of safety recalls; factors affecting our goodwill and other intangible asset impairment testing; and other factors described in our news releases and filings made under the securities laws, including, among others, our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Forward-looking statements contained in this news release speak only as of the date of this news release, and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.