Group 1 Posts Record Revenues, 18% EPS Increase For First Quarter

Guidance Raised for 2001 Second Quarter



Apr 26, 2001, 01:00 ET from Group 1 Automotive, Inc.

    HOUSTON, April 26 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE:   GPI), a
 Fortune 500 company in the automotive retailing industry, today reported
 record revenues and earnings for the first quarter of 2001.  Revenue growth in
 all business segments and expansion of margins drove the record-setting first-
 quarter performance.
 
      Highlights:
      - Diluted EPS $0.47, an 18% increase
      - Cash flow per share $0.68, a 21% increase
      - Operating income up 11% on 8% revenue growth
      - Gross and operating margins expand
 
 
                   Summary Results of Operations (Unaudited)
                    (In millions, except per share amounts)
 
                                                         Three Months Ended
                                                              March 31,
                                                        2001           2000
 
      Revenues                                         $928.9         $859.9
      Gross Profit                                     $141.9         $125.4
      Income from Operations                            $28.5          $25.8
      Net Income                                         $9.3           $9.0
      Diluted Earnings per Share                        $0.47          $0.40
 
 
     Growth in Higher-Margin Revenues Accelerates
     Revenues grew 8 percent to $928.9 million from $859.9 million for the same
 period last year.  Same store revenues grew 3.4 percent.  New vehicle revenues
 increased 5 percent on flat unit sales, while used vehicle revenues rose
 10 percent and unit sales were up 13 percent.  Parts and service and other
 dealership revenues increased significantly, growing 16 percent and
 23 percent, respectively.
     Gross margin for the quarter was 15.3 percent compared with 14.6 percent
 during the year-ago period.  This was due to higher gross margin on used
 vehicles and a favorable shift in the merchandise mix, as new vehicles, which
 carry the lowest margin, accounted for a lower percentage of revenue.  Income
 from operations rose to $28.5 million from $25.8 million, an 11 percent
 increase.  Operating margin increased to 3.1 percent from 3.0 percent in the
 year-ago period.
     Net income increased 3 percent to $9.3 million from $9.0 million, while
 diluted earnings per share grew 18 percent to $0.47 from $0.40 a year ago.
 Diluted cash flow per share, defined as net income plus depreciation and
 amortization, increased 21 percent to $0.68 from $0.56 in the 2000 period.
 Per share amounts were positively impacted by the company's continued
 repurchase of its common stock.
 
     Record Performance
     "I am pleased to announce a record first-quarter performance at a time
 when North American new vehicle sales slowed from the record pace of 2000 and
 some manufacturers and suppliers saw their performances deteriorate," said
 B.B. Hollingsworth Jr., Group 1's chairman, president and chief executive
 officer.  "The last two quarters have given us the opportunity to validate our
 business model by demonstrating our ability to generate satisfactory returns
 in a less robust new vehicle market.  During a challenging period for many
 companies, we responded by producing earnings per share growth that exceeded
 expectations.  We have now delivered 14 periods of double-digit quarterly
 earnings per share growth on a year-over-year basis since going public.
     "Our results are especially gratifying because we stimulated sales in
 order to bring new vehicle inventories back in line.  However, our overall
 operating margin improved because of expense controls and a strong showing by
 other business segments.  Used vehicle, parts and service and other dealership
 revenues were outstanding.  Because of our focus on these higher-margin areas,
 we expect them to continue to expand.  We ended the quarter with inventories
 at the right level and feel very comfortable going into the summer selling
 season," Hollingsworth added.
 
     2001 Outlook
     Hollingsworth stated that Group 1 now expects second-quarter and full-year
 2001 to show growth in earnings per share on slightly higher revenues.  "We
 see operating margin remaining consistent to slightly improved compared with
 last year," he said.
     Group 1 said it will seek strategic tuck-in acquisitions in markets
 currently served, targeting to add dealerships with aggregate revenues of
 between $200 million and $300 million, and may, subject to market conditions,
 use up to $7 million of operating cash flow to continue to repurchase its
 common stock in both private and market transactions.
 
     First-Quarter Conference Call
     Group 1 will hold a conference call to discuss first-quarter results and
 management's outlook for 2001 at 10:00 a.m. EDT on Thursday, April 26, 2001.
 The call can be accessed live and will be available for replay over the
 Internet via www.vcall.com, or www.ccbn.com .  Links will also be available on
 Group 1's website, www.group1auto.com .
 
     Group 1, a Fortune 500 company, is a leading operator in the automotive
 retailing industry.  The company has revenues of over $3.6 billion, and owns
 59 dealerships comprised of 101 franchises, 30 different brands, and 22
 collision service centers located in Texas, Oklahoma, Florida, New Mexico,
 Colorado, Georgia, Louisiana and Massachusetts.  Through its dealerships and
 Internet sites, the company sells new and used cars and light trucks, provides
 maintenance and repair services, sells replacement parts and arranges related
 financing, vehicle service and insurance contracts.
 
     This press release contains "forward-looking statements" within the
 meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934.
 These statements include statements regarding our plans, goals, beliefs or
 current expectations, including those plans, goals, beliefs and expectations
 of our officers and directors with respect to, among other things:
 
      - revenues for 2001
      - operating margins in 2001
      - earnings per share for the second quarter and the year ending 2001
      - the completion of pending and future acquisitions
      - future stock repurchases
 
     Any such forward-looking statements are not assurances of future
 performance and involve risks and uncertainties.  Actual results may differ
 materially from anticipated results in the forward-looking statements for a
 number of reasons, including:
 
      - the future economic environment, including consumer confidence, may
        affect the demand for new and used vehicles and parts and service sales
 
      - regulatory environment, adverse legislation, or unexpected litigation
        our principal automobile manufacturers, especially Ford and Toyota, may
        not continue to enjoy high customer satisfaction with their products
        and they may not continue to support and make high-demand vehicles
        available to us
      - requirements imposed on us by automobile manufacturers may affect our
        acquisitions and capital expenditures related to our dealership
        facilities
      - our dealership operations may not perform at expected levels or achieve
        expected improvements
      - we may not achieve expected future cost savings and our future costs
        could be higher than we expected
      - available capital resources and various debt agreements may limit our
        ability to repurchase shares.  Any repurchases of our stock may be
        made, from time to time, in accordance with applicable securities laws,
        in the open market or in privately negotiated transactions at such time
        and in such amounts, as we consider appropriate
 
     This information and additional factors that could affect our operating
 results and performance are described in Item 7. Management's Discussion and
 Analysis of Financial Condition and Results of Operations -- Cautionary
 Statement About Forward-Looking Statements;  -- Impact of Acquisitions on
 Growth; -- Dependence on the Success of Our Manufacturers; -- Cyclicality and
 -- Seasonality in our Form 10-K for the year ended December 31, 2000.
 
     All forward-looking statements attributable to us are qualified in their
 entirety by this cautionary statement.
     For additional information regarding Group 1 Automotive free of charge via
 fax, dial 1-800-PRO-INFO and use the company's stock symbol, "GPI."
 
     Group 1 Automotive, Inc. can be reached on the Internet at
 www.group1auto.com .
 
 
                              Group 1 Automotive, Inc.
                              Statements of Operations
                                    (Unaudited)
                  (Dollars in thousands, except per share amounts)
 
                                                        Three Months Ended
                                                             March 31,
                                                       2001           2000
     REVENUES:
     New vehicles                                    $537,442       $511,417
     Used vehicles                                    274,658        249,697
     Parts & service                                   84,771         72,844
     Other dealership revenues, net                    31,993         25,953
         Total revenues                               928,864        859,911
 
     COST OF SALES:
     New vehicles                                     498,072        471,807
     Used vehicles                                    250,835        229,625
     Parts & service                                   38,029         33,129
         Total cost of sales                          786,936        734,561
 
     Gross profit                                     141,928        125,350
 
     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     109,195         95,820
 
     Income from operations before non-cash charges    32,733         29,530
 
     DEPRECIATION EXPENSE                               1,961          1,750
 
     AMORTIZATION EXPENSE                               2,270          2,011
 
     INCOME FROM OPERATIONS                            28,502         25,769
 
     OTHER INCOME (EXPENSE):
     Floorplan interest expense                        (9,307)        (8,373)
     Other interest expense, net                       (4,200)        (3,883)
     Other income, net                                     38          1,024
 
     Income before income taxes                        15,033         14,537
 
     PROVISION FOR INCOME TAXES                         5,712          5,524
 
     NET INCOME                                        $9,321         $9,013
 
     Basic earnings per share                           $0.47          $0.40
     Diluted earnings per share                         $0.47          $0.40
     Diluted cash flow per share                        $0.68          $0.56
 
     Weighted average shares outstanding:
       Basic                                       19,691,449     22,384,332
       Diluted                                     20,006,717     22,781,689
 
     OTHER DATA:
     Gross margin                                       15.3%          14.6%
     Operating margin                                    3.1%           3.0%
     Pretax income margin                                1.6%           1.7%
     EBITDA                                           $32,771        $30,554
 
     Retail new vehicles sold                          20,726         20,779
     Retail used vehicles sold                         16,500         14,651
     Total retail sales                                37,226         35,430
 
 
                              Group 1 Automotive, Inc.
                       Condensed Consolidated Balance Sheets
                               (Dollars in thousands)
 
                                                     March 31,    December 31,
                                                      2001            2000
                                                   (unaudited)     (audited)
     ASSETS:
     Current assets:
       Cash and cash equivalents                     $144,893       $140,878
       Inventories, net                               511,060        527,101
       Other assets, net                               49,921         52,560
         Total current assets                         705,874        720,539
 
     Property, plant and equipment, net                71,307         70,901
     Goodwill, net                                    281,245        285,892
     Other assets                                      22,471         22,221
         Total assets                              $1,080,897     $1,099,553
 
     LIABILITIES AND STOCKHOLDERS' EQUITY:
     Current liabilities:
       Floorplan notes payable                       $498,192       $536,707
       Other interest-bearing liabilities               1,266          1,506
       Accounts payable and accrued expenses          122,543        127,557
         Total current liabilities                    622,001        665,770
 
     Debt                                             160,036        140,393
     Other liabilities                                 46,416         45,974
     Total stockholders' equity                       252,444        247,416
        Total liabilities and stockholders'
         equity                                    $1,080,897     $1,099,553
 
     OTHER DATA:
 
     Working capital                                  $83,873        $54,769
 
     Current ratio                                       1.13           1.08
 
     Long-term debt to capitalization                     39%            36%
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X88569136
 
 

SOURCE Group 1 Automotive, Inc.
    HOUSTON, April 26 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE:   GPI), a
 Fortune 500 company in the automotive retailing industry, today reported
 record revenues and earnings for the first quarter of 2001.  Revenue growth in
 all business segments and expansion of margins drove the record-setting first-
 quarter performance.
 
      Highlights:
      - Diluted EPS $0.47, an 18% increase
      - Cash flow per share $0.68, a 21% increase
      - Operating income up 11% on 8% revenue growth
      - Gross and operating margins expand
 
 
                   Summary Results of Operations (Unaudited)
                    (In millions, except per share amounts)
 
                                                         Three Months Ended
                                                              March 31,
                                                        2001           2000
 
      Revenues                                         $928.9         $859.9
      Gross Profit                                     $141.9         $125.4
      Income from Operations                            $28.5          $25.8
      Net Income                                         $9.3           $9.0
      Diluted Earnings per Share                        $0.47          $0.40
 
 
     Growth in Higher-Margin Revenues Accelerates
     Revenues grew 8 percent to $928.9 million from $859.9 million for the same
 period last year.  Same store revenues grew 3.4 percent.  New vehicle revenues
 increased 5 percent on flat unit sales, while used vehicle revenues rose
 10 percent and unit sales were up 13 percent.  Parts and service and other
 dealership revenues increased significantly, growing 16 percent and
 23 percent, respectively.
     Gross margin for the quarter was 15.3 percent compared with 14.6 percent
 during the year-ago period.  This was due to higher gross margin on used
 vehicles and a favorable shift in the merchandise mix, as new vehicles, which
 carry the lowest margin, accounted for a lower percentage of revenue.  Income
 from operations rose to $28.5 million from $25.8 million, an 11 percent
 increase.  Operating margin increased to 3.1 percent from 3.0 percent in the
 year-ago period.
     Net income increased 3 percent to $9.3 million from $9.0 million, while
 diluted earnings per share grew 18 percent to $0.47 from $0.40 a year ago.
 Diluted cash flow per share, defined as net income plus depreciation and
 amortization, increased 21 percent to $0.68 from $0.56 in the 2000 period.
 Per share amounts were positively impacted by the company's continued
 repurchase of its common stock.
 
     Record Performance
     "I am pleased to announce a record first-quarter performance at a time
 when North American new vehicle sales slowed from the record pace of 2000 and
 some manufacturers and suppliers saw their performances deteriorate," said
 B.B. Hollingsworth Jr., Group 1's chairman, president and chief executive
 officer.  "The last two quarters have given us the opportunity to validate our
 business model by demonstrating our ability to generate satisfactory returns
 in a less robust new vehicle market.  During a challenging period for many
 companies, we responded by producing earnings per share growth that exceeded
 expectations.  We have now delivered 14 periods of double-digit quarterly
 earnings per share growth on a year-over-year basis since going public.
     "Our results are especially gratifying because we stimulated sales in
 order to bring new vehicle inventories back in line.  However, our overall
 operating margin improved because of expense controls and a strong showing by
 other business segments.  Used vehicle, parts and service and other dealership
 revenues were outstanding.  Because of our focus on these higher-margin areas,
 we expect them to continue to expand.  We ended the quarter with inventories
 at the right level and feel very comfortable going into the summer selling
 season," Hollingsworth added.
 
     2001 Outlook
     Hollingsworth stated that Group 1 now expects second-quarter and full-year
 2001 to show growth in earnings per share on slightly higher revenues.  "We
 see operating margin remaining consistent to slightly improved compared with
 last year," he said.
     Group 1 said it will seek strategic tuck-in acquisitions in markets
 currently served, targeting to add dealerships with aggregate revenues of
 between $200 million and $300 million, and may, subject to market conditions,
 use up to $7 million of operating cash flow to continue to repurchase its
 common stock in both private and market transactions.
 
     First-Quarter Conference Call
     Group 1 will hold a conference call to discuss first-quarter results and
 management's outlook for 2001 at 10:00 a.m. EDT on Thursday, April 26, 2001.
 The call can be accessed live and will be available for replay over the
 Internet via www.vcall.com, or www.ccbn.com .  Links will also be available on
 Group 1's website, www.group1auto.com .
 
     Group 1, a Fortune 500 company, is a leading operator in the automotive
 retailing industry.  The company has revenues of over $3.6 billion, and owns
 59 dealerships comprised of 101 franchises, 30 different brands, and 22
 collision service centers located in Texas, Oklahoma, Florida, New Mexico,
 Colorado, Georgia, Louisiana and Massachusetts.  Through its dealerships and
 Internet sites, the company sells new and used cars and light trucks, provides
 maintenance and repair services, sells replacement parts and arranges related
 financing, vehicle service and insurance contracts.
 
     This press release contains "forward-looking statements" within the
 meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934.
 These statements include statements regarding our plans, goals, beliefs or
 current expectations, including those plans, goals, beliefs and expectations
 of our officers and directors with respect to, among other things:
 
      - revenues for 2001
      - operating margins in 2001
      - earnings per share for the second quarter and the year ending 2001
      - the completion of pending and future acquisitions
      - future stock repurchases
 
     Any such forward-looking statements are not assurances of future
 performance and involve risks and uncertainties.  Actual results may differ
 materially from anticipated results in the forward-looking statements for a
 number of reasons, including:
 
      - the future economic environment, including consumer confidence, may
        affect the demand for new and used vehicles and parts and service sales
 
      - regulatory environment, adverse legislation, or unexpected litigation
        our principal automobile manufacturers, especially Ford and Toyota, may
        not continue to enjoy high customer satisfaction with their products
        and they may not continue to support and make high-demand vehicles
        available to us
      - requirements imposed on us by automobile manufacturers may affect our
        acquisitions and capital expenditures related to our dealership
        facilities
      - our dealership operations may not perform at expected levels or achieve
        expected improvements
      - we may not achieve expected future cost savings and our future costs
        could be higher than we expected
      - available capital resources and various debt agreements may limit our
        ability to repurchase shares.  Any repurchases of our stock may be
        made, from time to time, in accordance with applicable securities laws,
        in the open market or in privately negotiated transactions at such time
        and in such amounts, as we consider appropriate
 
     This information and additional factors that could affect our operating
 results and performance are described in Item 7. Management's Discussion and
 Analysis of Financial Condition and Results of Operations -- Cautionary
 Statement About Forward-Looking Statements;  -- Impact of Acquisitions on
 Growth; -- Dependence on the Success of Our Manufacturers; -- Cyclicality and
 -- Seasonality in our Form 10-K for the year ended December 31, 2000.
 
     All forward-looking statements attributable to us are qualified in their
 entirety by this cautionary statement.
     For additional information regarding Group 1 Automotive free of charge via
 fax, dial 1-800-PRO-INFO and use the company's stock symbol, "GPI."
 
     Group 1 Automotive, Inc. can be reached on the Internet at
 www.group1auto.com .
 
 
                              Group 1 Automotive, Inc.
                              Statements of Operations
                                    (Unaudited)
                  (Dollars in thousands, except per share amounts)
 
                                                        Three Months Ended
                                                             March 31,
                                                       2001           2000
     REVENUES:
     New vehicles                                    $537,442       $511,417
     Used vehicles                                    274,658        249,697
     Parts & service                                   84,771         72,844
     Other dealership revenues, net                    31,993         25,953
         Total revenues                               928,864        859,911
 
     COST OF SALES:
     New vehicles                                     498,072        471,807
     Used vehicles                                    250,835        229,625
     Parts & service                                   38,029         33,129
         Total cost of sales                          786,936        734,561
 
     Gross profit                                     141,928        125,350
 
     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     109,195         95,820
 
     Income from operations before non-cash charges    32,733         29,530
 
     DEPRECIATION EXPENSE                               1,961          1,750
 
     AMORTIZATION EXPENSE                               2,270          2,011
 
     INCOME FROM OPERATIONS                            28,502         25,769
 
     OTHER INCOME (EXPENSE):
     Floorplan interest expense                        (9,307)        (8,373)
     Other interest expense, net                       (4,200)        (3,883)
     Other income, net                                     38          1,024
 
     Income before income taxes                        15,033         14,537
 
     PROVISION FOR INCOME TAXES                         5,712          5,524
 
     NET INCOME                                        $9,321         $9,013
 
     Basic earnings per share                           $0.47          $0.40
     Diluted earnings per share                         $0.47          $0.40
     Diluted cash flow per share                        $0.68          $0.56
 
     Weighted average shares outstanding:
       Basic                                       19,691,449     22,384,332
       Diluted                                     20,006,717     22,781,689
 
     OTHER DATA:
     Gross margin                                       15.3%          14.6%
     Operating margin                                    3.1%           3.0%
     Pretax income margin                                1.6%           1.7%
     EBITDA                                           $32,771        $30,554
 
     Retail new vehicles sold                          20,726         20,779
     Retail used vehicles sold                         16,500         14,651
     Total retail sales                                37,226         35,430
 
 
                              Group 1 Automotive, Inc.
                       Condensed Consolidated Balance Sheets
                               (Dollars in thousands)
 
                                                     March 31,    December 31,
                                                      2001            2000
                                                   (unaudited)     (audited)
     ASSETS:
     Current assets:
       Cash and cash equivalents                     $144,893       $140,878
       Inventories, net                               511,060        527,101
       Other assets, net                               49,921         52,560
         Total current assets                         705,874        720,539
 
     Property, plant and equipment, net                71,307         70,901
     Goodwill, net                                    281,245        285,892
     Other assets                                      22,471         22,221
         Total assets                              $1,080,897     $1,099,553
 
     LIABILITIES AND STOCKHOLDERS' EQUITY:
     Current liabilities:
       Floorplan notes payable                       $498,192       $536,707
       Other interest-bearing liabilities               1,266          1,506
       Accounts payable and accrued expenses          122,543        127,557
         Total current liabilities                    622,001        665,770
 
     Debt                                             160,036        140,393
     Other liabilities                                 46,416         45,974
     Total stockholders' equity                       252,444        247,416
        Total liabilities and stockholders'
         equity                                    $1,080,897     $1,099,553
 
     OTHER DATA:
 
     Working capital                                  $83,873        $54,769
 
     Current ratio                                       1.13           1.08
 
     Long-term debt to capitalization                     39%            36%
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X88569136
 
 SOURCE  Group 1 Automotive, Inc.