AutoNation Reports All-Time Record Results
AutoNation Reports All-Time Record Results
- Third quarter 2020 EPS from continuing operations was $2.05 compared to EPS from continuing operations of $1.11 in the prior year
- Third quarter 2020 adjusted EPS from continuing operations was an all-time record $2.38, an increase of 102% compared to adjusted EPS from continuing operations of $1.18 in the prior year
- Third quarter 2020 same-store Total Variable gross profit per vehicle retailed was up $966 or 28% compared to the year-ago period
- Third quarter 2020 SG&A as a percentage of gross profit was 66.0%. Adjusted SG&A as a percentage of gross profit was 64.4%, an improvement of 800 basis points compared to the prior year
- AutoNation plans to build over 100 AutoNation USA pre-owned vehicle stores, with over 50 completed by the end of 2025
- AutoNation today announced that its Board of Directors increased share repurchase authorization to $500 million
PR Newswire
FORT LAUDERDALE, Fla., Oct. 21, 2020
FORT LAUDERDALE, Fla., Oct. 21, 2020 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's largest and most recognized automotive retailer, today reported third quarter 2020 net income from continuing operations of $183 million, or $2.05 per share, which included charges of $28 million after-tax, or $0.31 per share, related to the closing of the AutoNation Collision Parts business and a non-cash unrealized loss related to our investment in Vroom of $2 million after-tax, or $0.02 per share. Third quarter 2019 net income from continuing operations was $100 million, or $1.11 per share. Third quarter 2020 adjusted EPS from continuing operations was an all-time record $2.38, an increase of 102% compared to third quarter 2019 adjusted EPS from continuing operations of $1.18. Reconciliations of non-GAAP financial measures are included in the attached financial tables.
Operational Summary
Third quarter 2020 Operational Summary:
- Revenue – Same-store revenue was $5.4 billion, which was in line with the same period a year ago.
- Gross Profit - Same-store gross profit totaled $972 million, an increase of 11% compared to the year-ago period.
- New Vehicle Gross Profit - Same-store new vehicle gross profit per vehicle retailed was $2,535, up $914 or 56% compared to the year-ago period.
- Used Vehicle Gross Profit - Same-store used vehicle gross profit per vehicle retailed was $1,994, up $602 or 43% compared to the year-ago period.
- Customer Financial Services Gross Profit - Same-store Customer Financial Services gross profit per vehicle retailed was $2,154, up $213 or 11% compared to the year-ago period.
Selected GAAP Financial Data | ($ in millions, except per share data) | ||
Q3 2020 | Q3 2019 | YoY | |
Revenue | $ 5,404.9 | $ 5,461.2 | -1% |
Gross Profit | $ 971.5 | $ 887.4 | 9% |
Operating Income | $ 271.7 | $ 193.5 | 40% |
Net Income from Continuing Operations | $ 182.6 | $ 100.0 | 83% |
Diluted EPS from Continuing Operations | $ 2.05 | $ 1.11 | 85% |
Selected Non-GAAP Financial Data | ($ in millions, except per share data) | ||
Q3 2020 | Q3 2019 | YoY | |
Adjusted Gross Profit | $ 992.1 | $ 887.4 | 12% |
Adjusted Operating Income | $ 308.2 | $ 199.3 | 55% |
Adjusted Net Income from Continuing Operations | $ 211.8 | $ 106.3 | 99% |
Adjusted Diluted EPS from Continuing Operations | $ 2.38 | $ 1.18 | 102% |
Expense Control
During the third quarter, AutoNation continued to leverage its digital capabilities to drive cost reductions and increased efficiency for the long-term success of the business. These efforts, combined with strong gross profit growth, drove significant SG&A leverage in the quarter. Adjusted SG&A as a percentage of gross profit was 64.4% in the third quarter of 2020, which represents an 800 basis point improvement compared to the third quarter of 2019. AutoNation remains committed to operating below 68% SG&A as a percentage of gross profit on a long-term basis.
AutoNation USA
AutoNation continues to prioritize its capital expenditures towards opportunities with the greatest return potential. The Company plans to build over 100 AutoNation USA pre-owned vehicle stores, with over 50 completed by the end of 2025. The first phase of the AutoNation USA store expansion will include extending AutoNation's coast to coast footprint into new markets. The Company plans to open five new AutoNation USA stores by the end of 2021. AutoNation USA stores will continue to leverage the AutoNation brand and its proven processes for a competitive advantage. With its expansion, AutoNation has set the long-term goal of retailing over 1 million combined new and used vehicle units per year.
Share Repurchase
AutoNation today announced that its Board of Directors increased the Company's outstanding share repurchase authorization to an aggregate of $500 million. As of October 19, 2020, AutoNation had approximately 87.9 million shares outstanding.
Segment Results
Segment results (1) for the third quarter 2020 were as follows:
Third Quarter 2020 Segment Results
- Domestic - Domestic segment income (2) was $112 million compared to year-ago segment income of $70 million, an increase of 59%.
- Import - Import segment income (2) was $124 million compared to year-ago segment income of $87 million, an increase of 42%.
- Premium Luxury - Premium Luxury segment income (2) was $144 million compared to year-ago segment income of $89 million, an increase of 62%.
For the nine-month period ended September 30, 2020, AutoNation reported net income from continuing operations of $230 million, or $2.59 per share, compared to $293 million, or $3.24 per share, in the prior year. Adjusted net income from continuing operations was $418 million, or $4.70 per share, compared to $300 million, or $3.32 per share, in the prior year. Reconciliations of non-GAAP financial measures are included in the attached financial tables.
The third quarter conference call may be accessed by telephone at (866) 211-3176 (Conference ID: 6355384) at 9:00 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 12:00 p.m. Eastern Time on October 21, 2020, through November 11, 2020, by calling (800) 585-8367 (Conference ID: 6355384). Additional information regarding AutoNation's results can be found in the Investor Presentation available at: investors.autonation.com.
(1) | AutoNation has three reportable segments: Domestic, Import, and Premium Luxury. The Domestic segment is comprised of stores that sell vehicles manufactured by General Motors, Ford, and FCA US; the Import segment is comprised of stores that sell vehicles manufactured primarily by Toyota, Honda, Subaru, Nissan, and Hyundai; and the Premium Luxury segment is comprised of stores that sell vehicles manufactured primarily by Mercedes-Benz, BMW, Lexus, Jaguar Land Rover, and Audi. |
(2) | Segment income represents income for each of our reportable segments and is defined as operating income less floorplan interest expense. |
About AutoNation, Inc.
AutoNation, America's largest and most recognized automotive retailer, is transforming the automotive industry through its bold leadership, innovation, and comprehensive brand extensions. As of September 30, 2020, AutoNation owned and operated over 325 locations from coast to coast. AutoNation has sold over 12 million vehicles, the first automotive retailer to reach this milestone. AutoNation's success is driven by a commitment to delivering a peerless experience through customer-focused sales and service processes. Since 2013, AutoNation has raised over $25 million to drive out cancer, create awareness, and support critical research through its DRIVE PINK initiative, which was officially branded in 2015.
Please visit www.autonation.com, investors.autonation.com, www.twitter.com/CEOMikeJackson, 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 press 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," "goals," "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, our investments in digital and online capabilities, and other brand extension strategies, as well as statements regarding our expectations for the future performance of our business (including with respect to AutoNation USA stores and SG&A as a percentage of gross profit) 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: the response by federal, state, and local governments and other third parties to, and the economic impacts of, the COVID-19 pandemic; supply chain disruptions; economic conditions, including changes in consumer demand, unemployment rates, interest rates, fuel prices, and tariffs; new and used vehicle margins; our ability to successfully implement and maintain expense controls; our ability to implement successfully our strategic initiatives, partnerships, and investments, including the planned expansion of our AutoNation USA stores, our investments in digital and online capabilities, and other brand extension strategies; our ability to identify, acquire, and build out suitable locations in a timely manner; our ability to maintain and enhance our retail brands and reputation and to attract consumers to our own digital channels; the success and financial viability and the incentive and marketing programs of vehicle manufacturers and distributors with which we hold franchises; our ability to integrate successfully acquired and awarded franchises and to attain planned sales volumes within our expected time frames; restrictions imposed by vehicle manufacturers and our ability to obtain manufacturer approval for acquisitions; 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.
AUTONATION, INC. | |||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(In millions, except per share data) | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||
2020 | 2019 | 2020 | 2019 | ||||||
Revenue: | |||||||||
New vehicle | $ | 2,748.4 | $ | 2,874.8 | $ | 7,291.6 | $ | 8,141.1 | |
Used vehicle | 1,516.9 | 1,402.9 | 4,090.1 | 4,121.9 | |||||
Parts and service | 852.8 | 902.6 | 2,419.0 | 2,680.8 | |||||
Finance and insurance, net | 281.2 | 266.2 | 763.4 | 757.9 | |||||
Other | 5.6 | 14.7 | 40.8 | 85.1 | |||||
Total revenue | 5,404.9 | 5,461.2 | 14,604.9 | 15,786.8 | |||||
Cost of sales: | |||||||||
New vehicle | 2,581.2 | 2,755.9 | 6,908.4 | 7,774.8 | |||||
Used vehicle | 1,370.0 | 1,310.6 | 3,735.2 | 3,842.3 | |||||
Parts and service | 477.6 | 493.6 | 1,343.6 | 1,461.0 | |||||
Other | 4.6 | 13.7 | 38.0 | 81.3 | |||||
Total cost of sales | 4,433.4 | 4,573.8 | 12,025.2 | 13,159.4 | |||||
Gross profit | 971.5 | 887.4 | 2,579.7 | 2,627.4 | |||||
Selling, general, and administrative expenses | 641.4 | 653.8 | 1,790.0 | 1,913.8 | |||||
Depreciation and amortization | 51.8 | 45.2 | 149.0 | 133.7 | |||||
Goodwill impairment | - | - | 318.3 | - | |||||
Franchise rights impairment | - | - | 57.5 | 9.6 | |||||
Other (income) expense, net(1) | 6.6 | (5.1) | 11.1 | (17.5) | |||||
Operating income | 271.7 | 193.5 | 253.8 | 587.8 | |||||
Non-operating income (expense) items: | |||||||||
Floorplan interest expense | (11.1) | (33.0) | (52.9) | (109.4) | |||||
Other interest expense | (23.6) | (26.1) | (70.3) | (81.6) | |||||
Interest income | 0.1 | 0.1 | 0.3 | 0.4 | |||||
Other income, net(2) | 6.4 | 2.6 | 217.9 | 4.2 | |||||
Income from continuing operations before income taxes | 243.5 | 137.1 | 348.8 | 401.4 | |||||
Income tax provision | 60.9 | 37.1 | 118.5 | 108.3 | |||||
Net income from continuing operations | 182.6 | 100.0 | 230.3 | 293.1 | |||||
Loss from discontinued operations, net of income taxes | - | (0.5) | (0.2) | (0.8) | |||||
Net income | $ | 182.6 | $ | 99.5 | $ | 230.1 | $ | 292.3 | |
Diluted earnings (loss) per share(3): | |||||||||
Continuing operations | $ | 2.05 | $ | 1.11 | $ | 2.59 | $ | 3.24 | |
Discontinued operations | $ | - | $ | (0.01) | $ | - | $ | (0.01) | |
Net income | $ | 2.05 | $ | 1.10 | $ | 2.59 | $ | 3.23 | |
Weighted average common shares outstanding | 88.9 | 90.4 | 89.0 | 90.4 | |||||
Common shares outstanding, net of treasury stock, at period end | 87.8 | 89.2 | 87.8 | 89.2 | |||||
(1) | Primarily comprised of non-cash asset impairment charges, net gains on store/property dispositions, and gains on legal settlements. Current period also includes costs associated with closing of ACP business. | ||||||||
(2) | Current period includes unrealized gain (loss) on minority equity investment. | ||||||||
(3) | Earnings per share amounts are calculated discretely and therefore may not add up to the total due to rounding. | ||||||||
AUTONATION, INC. | ||||||||||||||||||
UNAUDITED SUPPLEMENTARY DATA | ||||||||||||||||||
($ in millions, except per vehicle data) | ||||||||||||||||||
Operating Highlights | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2020 | 2019 | $ Variance | % Variance | 2020 | 2019 | $ Variance | % Variance | |||||||||||
Revenue: | ||||||||||||||||||
New vehicle | $ | 2,748.4 | $ | 2,874.8 | $ | (126.4) | (4.4) | $ | 7,291.6 | $ | 8,141.1 | $ | (849.5) | (10.4) | ||||
Retail used vehicle | 1,421.0 | 1,326.5 | 94.5 | 7.1 | 3,845.5 | 3,895.5 | (50.0) | (1.3) | ||||||||||
Wholesale | 95.9 | 76.4 | 19.5 | 25.5 | 244.6 | 226.4 | 18.2 | 8.0 | ||||||||||
Used vehicle | 1,516.9 | 1,402.9 | 114.0 | 8.1 | 4,090.1 | 4,121.9 | (31.8) | (0.8) | ||||||||||
Finance and insurance, net | 281.2 | 266.2 | 15.0 | 5.6 | 763.4 | 757.9 | 5.5 | 0.7 | ||||||||||
Total variable operations | 4,546.5 | 4,543.9 | 2.6 | 0.1 | 12,145.1 | 13,020.9 | (875.8) | (6.7) | ||||||||||
Parts and service | 852.8 | 902.6 | (49.8) | (5.5) | 2,419.0 | 2,680.8 | (261.8) | (9.8) | ||||||||||
Other | 5.6 | 14.7 | (9.1) | 40.8 | 85.1 | (44.3) | ||||||||||||
Total revenue | $ | 5,404.9 | $ | 5,461.2 | $ | (56.3) | (1.0) | $ | 14,604.9 | $ | 15,786.8 | $ | (1,181.9) | (7.5) | ||||
Gross profit: | ||||||||||||||||||
New vehicle | $ | 167.2 | $ | 118.9 | $ | 48.3 | 40.6 | $ | 383.2 | $ | 366.3 | $ | 16.9 | 4.6 | ||||
Retail used vehicle | 128.8 | 87.6 | 41.2 | 47.0 | 318.1 | 262.4 | 55.7 | 21.2 | ||||||||||
Wholesale | 18.1 | 4.7 | 13.4 | 36.8 | 17.2 | 19.6 | ||||||||||||
Used vehicle | 146.9 | 92.3 | 54.6 | 59.2 | 354.9 | 279.6 | 75.3 | 26.9 | ||||||||||
Finance and insurance | 281.2 | 266.2 | 15.0 | 5.6 | 763.4 | 757.9 | 5.5 | 0.7 | ||||||||||
Total variable operations | 595.3 | 477.4 | 117.9 | 24.7 | 1,501.5 | 1,403.8 | 97.7 | 7.0 | ||||||||||
Parts and service | 375.2 | 409.0 | (33.8) | (8.3) | 1,075.4 | 1,219.8 | (144.4) | (11.8) | ||||||||||
Other | 1.0 | 1.0 | 0.0 | 2.8 | 3.8 | (1.0) | ||||||||||||
Total gross profit | 971.5 | 887.4 | 84.1 | 9.5 | 2,579.7 | 2,627.4 | (47.7) | (1.8) | ||||||||||
Selling, general, and administrative expenses | 641.4 | 653.8 | 12.4 | 1.9 | 1,790.0 | 1,913.8 | 123.8 | 6.5 | ||||||||||
Depreciation and amortization | 51.8 | 45.2 | (6.6) | 149.0 | 133.7 | (15.3) | ||||||||||||
Goodwill impairment | - | - | - | 318.3 | - | (318.3) | ||||||||||||
Franchise rights impairment | - | - | - | 57.5 | 9.6 | (47.9) | ||||||||||||
Other (income) expense, net | 6.6 | (5.1) | (11.7) | 11.1 | (17.5) | (28.6) | ||||||||||||
Operating income | 271.7 | 193.5 | 78.2 | 40.4 | 253.8 | 587.8 | (334.0) | (56.8) | ||||||||||
Non-operating income (expense) items: | ||||||||||||||||||
Floorplan interest expense | (11.1) | (33.0) | 21.9 | (52.9) | (109.4) | 56.5 | ||||||||||||
Other interest expense | (23.6) | (26.1) | 2.5 | (70.3) | (81.6) | 11.3 | ||||||||||||
Interest income | 0.1 | 0.1 | (0.0) | 0.3 | 0.4 | (0.1) | ||||||||||||
Other income, net | 6.4 | 2.6 | 3.8 | 217.9 | 4.2 | 213.7 | ||||||||||||
Income from continuing operations before income taxes | $ | 243.5 | $ | 137.1 | $ | 106.4 | 77.6 | $ | 348.8 | $ | 401.4 | $ | (52.6) | (13.1) | ||||
Retail vehicle unit sales: | ||||||||||||||||||
New | 65,998 | 74,190 | (8,192) | (11.0) | 177,250 | 208,219 | (30,969) | (14.9) | ||||||||||
Used | 64,587 | 63,581 | 1,006 | 1.6 | 179,656 | 187,091 | (7,435) | (4.0) | ||||||||||
130,585 | 137,771 | (7,186) | (5.2) | 356,906 | 395,310 | (38,404) | (9.7) | |||||||||||
Revenue per vehicle retailed: | ||||||||||||||||||
New | $ | 41,644 | $ | 38,749 | $ | 2,895 | 7.5 | $ | 41,137 | $ | 39,099 | $ | 2,038 | 5.2 | ||||
Used | $ | 22,001 | $ | 20,863 | $ | 1,138 | 5.5 | $ | 21,405 | $ | 20,821 | $ | 584 | 2.8 | ||||
Gross profit per vehicle retailed: | ||||||||||||||||||
New | $ | 2,533 | $ | 1,603 | $ | 930 | 58.0 | $ | 2,162 | $ | 1,759 | $ | 403 | 22.9 | ||||
Used | $ | 1,994 | $ | 1,378 | $ | 616 | 44.7 | $ | 1,771 | $ | 1,403 | $ | 368 | 26.2 | ||||
Finance and insurance | $ | 2,153 | $ | 1,932 | $ | 221 | 11.4 | $ | 2,139 | $ | 1,917 | $ | 222 | 11.6 | ||||
Total variable operations(1) | $ | 4,420 | $ | 3,431 | $ | 989 | 28.8 | $ | 4,104 | $ | 3,508 | $ | 596 | 17.0 | ||||
Operating Percentages | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2020 (%) | 2019 (%) | 2020 (%) | 2019 (%) | |||||||||||||||
Revenue mix percentages: | ||||||||||||||||||
New vehicle | 50.9 | 52.6 | 49.9 | 51.6 | ||||||||||||||
Used vehicle | 28.1 | 25.7 | 28.0 | 26.1 | ||||||||||||||
Parts and service | 15.8 | 16.5 | 16.6 | 17.0 | ||||||||||||||
Finance and insurance, net | 5.2 | 4.9 | 5.2 | 4.8 | ||||||||||||||
Other | - | 0.3 | 0.3 | 0.5 | ||||||||||||||
100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Gross profit mix percentages: | ||||||||||||||||||
New vehicle | 17.2 | 13.4 | 14.9 | 13.9 | ||||||||||||||
Used vehicle | 15.1 | 10.4 | 13.8 | 10.6 | ||||||||||||||
Parts and service | 38.6 | 46.1 | 41.7 | 46.4 | ||||||||||||||
Finance and insurance | 28.9 | 30.0 | 29.6 | 28.8 | ||||||||||||||
Other | 0.2 | 0.1 | - | 0.3 | ||||||||||||||
100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Operating items as a percentage of revenue: | ||||||||||||||||||
Gross profit: | ||||||||||||||||||
New vehicle | 6.1 | 4.1 | 5.3 | 4.5 | ||||||||||||||
Used vehicle - retail | 9.1 | 6.6 | 8.3 | 6.7 | ||||||||||||||
Parts and service | 44.0 | 45.3 | 44.5 | 45.5 | ||||||||||||||
Total | 18.0 | 16.2 | 17.7 | 16.6 | ||||||||||||||
Selling, general, and administrative expenses | 11.9 | 12.0 | 12.3 | 12.1 | ||||||||||||||
Operating income | 5.0 | 3.5 | 1.7 | 3.7 | ||||||||||||||
Operating items as a percentage of total gross profit: | ||||||||||||||||||
Selling, general, and administrative expenses | 66.0 | 73.7 | 69.4 | 72.8 | ||||||||||||||
Operating income | 28.0 | 21.8 | 9.8 | 22.4 | ||||||||||||||
(1) | Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales. | |||||||||||||||||
AUTONATION, INC. | |||||||||||||||||
UNAUDITED SUPPLEMENTARY DATA | |||||||||||||||||
($ in millions) | |||||||||||||||||
Segment Operating Highlights | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2020 | 2019 | $ Variance | % Variance | 2020 | 2019 | $ Variance | % Variance | ||||||||||
Revenue: | |||||||||||||||||
Domestic | $ | 1,734.5 | $ | 1,728.6 | $ | 5.9 | 0.3 | $ | 4,704.0 | $ | 5,004.7 | $ | (300.7) | (6.0) | |||
Import | 1,621.5 | 1,722.5 | (101.0) | (5.9) | 4,308.9 | 4,845.9 | (537.0) | (11.1) | |||||||||
Premium luxury | 1,870.0 | 1,820.5 | 49.5 | 2.7 | 5,051.6 | 5,375.5 | (323.9) | (6.0) | |||||||||
Total | 5,226.0 | 5,271.6 | (45.6) | (0.9) | 14,064.5 | 15,226.1 | (1,161.6) | (7.6) | |||||||||
Corporate and other | 178.9 | 189.6 | (10.7) | (5.6) | 540.4 | 560.7 | (20.3) | (3.6) | |||||||||
Total consolidated revenue | $ | 5,404.9 | $ | 5,461.2 | $ | (56.3) | (1.0) | $ | 14,604.9 | $ | 15,786.8 | $ | (1,181.9) | (7.5) | |||
Segment income*: | |||||||||||||||||
Domestic | $ | 111.9 | $ | 70.3 | $ | 41.6 | 59.2 | $ | 248.1 | $ | 192.4 | $ | 55.7 | 29.0 | |||
Import | 123.5 | 86.9 | 36.6 | 42.1 | 277.7 | 240.9 | 36.8 | 15.3 | |||||||||
Premium luxury | 143.9 | 89.0 | 54.9 | 61.7 | 313.3 | 268.6 | 44.7 | 16.6 | |||||||||
Total | 379.3 | 246.2 | 133.1 | 54.1 | 839.1 | 701.9 | 137.2 | 19.5 | |||||||||
Corporate and other | (118.7) | (85.7) | (33.0) | (638.2) | (223.5) | (414.7) | |||||||||||
Add: Floorplan interest expense | 11.1 | 33.0 | (21.9) | 52.9 | 109.4 | (56.5) | |||||||||||
Operating income | $ | 271.7 | $ | 193.5 | $ | 78.2 | 40.4 | $ | 253.8 | $ | 587.8 | $ | (334.0) | (56.8) | |||
* Segment income represents income for each of our reportable segments and is defined as operating income less floorplan interest expense. | |||||||||||||||||
Retail new vehicle unit sales: | |||||||||||||||||
Domestic | 21,620 | 23,227 | (1,607) | (6.9) | 57,995 | 66,117 | (8,122) | (12.3) | |||||||||
Import | 29,356 | 34,765 | (5,409) | (15.6) | 78,248 | 95,478 | (17,230) | (18.0) | |||||||||
Premium luxury | 15,022 | 16,198 | (1,176) | (7.3) | 41,007 | 46,624 | (5,617) | (12.0) | |||||||||
65,998 | 74,190 | (8,192) | (11.0) | 177,250 | 208,219 | (30,969) | (14.9) | ||||||||||
Brand Mix - Retail New Vehicle Units Sold | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2020 (%) | 2019 (%) | 2020 (%) | 2019 (%) | ||||||||||||||
Domestic: | |||||||||||||||||
Ford, Lincoln | 11.7 | 11.1 | 11.8 | 11.3 | |||||||||||||
Chevrolet, Buick, Cadillac, GMC | 10.7 | 10.7 | 11.0 | 10.9 | |||||||||||||
Chrysler, Dodge, Jeep, Ram | 10.4 | 9.5 | 9.9 | 9.6 | |||||||||||||
Domestic total | 32.8 | 31.3 | 32.7 | 31.8 | |||||||||||||
Import: | |||||||||||||||||
Toyota | 21.1 | 21.6 | 20.5 | 20.3 | |||||||||||||
Honda | 13.6 | 14.2 | 13.6 | 14.4 | |||||||||||||
Nissan | 2.5 | 3.6 | 2.6 | 3.7 | |||||||||||||
Other Import | 7.2 | 7.5 | 7.5 | 7.4 | |||||||||||||
Import total | 44.4 | 46.9 | 44.2 | 45.8 | |||||||||||||
Premium Luxury: | |||||||||||||||||
Mercedes-Benz | 8.1 | 8.1 | 8.9 | 8.3 | |||||||||||||
BMW | 6.0 | 6.1 | 5.8 | 6.1 | |||||||||||||
Lexus | 2.7 | 2.0 | 2.5 | 2.2 | |||||||||||||
Audi | 2.2 | 2.2 | 2.2 | 2.1 | |||||||||||||
Jaguar Land Rover | 2.2 | 2.0 | 2.3 | 2.2 | |||||||||||||
Other Premium Luxury | 1.6 | 1.4 | 1.4 | 1.5 | |||||||||||||
Premium Luxury total | 22.8 | 21.8 | 23.1 | 22.4 | |||||||||||||
100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||||
AUTONATION, INC | ||||||||||||||
UNAUDITED SUPPLEMENTARY DATA, Continued | ||||||||||||||
($ in millions) | ||||||||||||||
Capital Expenditures / Stock Repurchases | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Capital expenditures (1) | $ | 37.3 | $ | 62.6 | $ | 91.9 | $ | 170.1 | ||||||
Cash paid for acquisitions, net of cash acquired | $ | - | $ | 0.4 | $ | 0.4 | $ | 4.7 | ||||||
Proceeds from exercises of stock options | $ | 30.5 | $ | 4.9 | $ | 31.5 | $ | 8.0 | ||||||
Stock repurchases: | ||||||||||||||
Aggregate purchase price | $ | - | $ | - | $ | 80.0 | $ | 44.7 | ||||||
Shares repurchased (in millions) | - | - | 2.5 | 1.3 | ||||||||||
Floorplan Assistance and Expense | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2020 | 2019 | Variance | 2020 | 2019 | Variance | |||||||||
Floorplan assistance earned (included in cost of sales) | $ | 28.9 | $ | 28.7 | $ | 0.2 | $ | 77.1 | $ | 81.5 | $ | (4.4) | ||
New vehicle floorplan interest expense | (10.4) | (30.1) | 19.7 | (47.6) | (101.4) | 53.8 | ||||||||
Net new vehicle inventory carrying benefit (cost) | $ | 18.5 | $ | (1.4) | $ | 19.9 | $ | 29.5 | $ | (19.9) | $ | 49.4 | ||
Balance Sheet and Other Highlights | ||||||||||||||
September 30, 2020 | December 31, 2019 | September 30, 2019 | ||||||||||||
Cash and cash equivalents | $ | 350.5 | $ | 42.0 | $ | 45.0 | ||||||||
Inventory | $ | 2,482.5 | $ | 3,305.8 | $ | 3,280.7 | ||||||||
Total floorplan notes payable | $ | 2,308.6 | $ | 3,575.8 | $ | 3,481.1 | ||||||||
Non-vehicle debt | $ | 2,089.7 | $ | 2,104.1 | $ | 2,269.9 | ||||||||
Equity | $ | 3,357.9 | $ | 3,162.1 | $ | 2,996.7 | ||||||||
New days supply (industry standard of selling days) | 43 days | 52 days | 55 days | |||||||||||
Used days supply (trailing calendar month days) | 39 days | 39 days | 37 days | |||||||||||
Key Credit Agreement Covenant Compliance Calculations(2) | ||||||||||||||
Leverage ratio | 1.99x | |||||||||||||
Covenant | less than or equal to | 3.75x | ||||||||||||
Capitalization ratio | 46.3% | |||||||||||||
Covenant | less than or equal to | 70.0% | ||||||||||||
(1) | Includes accrued construction in progress and excludes property associated with leases entered into during the period | |||||||||||||
(2) | Calculated in accordance with our credit agreement as filed with the SEC | |||||||||||||
AUTONATION, INC. | |||||||||||||||||||||||||||||
UNAUDITED SUPPLEMENTARY DATA, Continued | |||||||||||||||||||||||||||||
($ in millions, except per share data) | |||||||||||||||||||||||||||||
Comparable Basis Reconciliations(1) | |||||||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||
Gross Profit | Operating Income | Income from Continuing Operations Before | Income Tax Provision(2) | Effective Tax Rate | Net Income | Diluted Earnings Per Share(3) | |||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
As reported | $ | 182.6 | $ | 99.5 | $ | 2.05 | $ | 1.10 | |||||||||||||||||||||
Discontinued operations, net of income taxes | - | 0.5 | $ | - | $ | 0.01 | |||||||||||||||||||||||
From continuing operations, as reported | $ | 971.5 | $ | 887.4 | $ | 271.7 | $ | 193.5 | $ | 243.5 | $ | 137.1 | $ | 60.9 | $ | 37.1 | 25.0% | 27.1% | $ | 182.6 | $ | 100.0 | $ | 2.05 | $ | 1.11 | |||
Unrealized loss on equity investment | 2.0 | - | 0.5 | - | 1.5 | - | $ | 0.02 | $ | - | |||||||||||||||||||
ACP inventory valuation adjustment | 20.6 | - | 20.6 | - | 20.6 | - | 5.0 | - | 15.6 | - | $ | 0.18 | $ | - | |||||||||||||||
SG&A costs associated with exit of ACP business(4) | 2.9 | - | 2.9 | - | 0.7 | - | 2.2 | - | $ | 0.02 | $ | - | |||||||||||||||||
Other costs associated with exit of ACP business(5) | 13.0 | - | 13.0 | - | 3.1 | - | 9.9 | - | $ | 0.11 | $ | - | |||||||||||||||||
Executive separation costs | - | 11.0 | - | 11.0 | - | 0.8 | - | 10.2 | $ | - | $ | 0.11 | |||||||||||||||||
Asset impairments and net gains on store/property dispositions | - | (5.2) | - | (5.2) | - | (1.3) | - | (3.9) | $ | - | $ | (0.04) | |||||||||||||||||
Adjusted | $ | 992.1 | $ | 887.4 | $ | 308.2 | $ | 199.3 | $ | 282.0 | $ | 142.9 | $ | 70.2 | $ | 36.6 | 24.9% | 25.6% | $ | 211.8 | $ | 106.3 | $ | 2.38 | $ | 1.18 | |||
Three Months Ended September, 30 | |||||||||||||||||||||||||||||
SG&A | SG&A as a Percentage of Gross Profit (%)(6) | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||
As reported | $ | 641.4 | $ | 653.8 | 66.0 | 73.7 | |||||||||||||||||||||||
Excluding SG&A costs associated with exit of ACP business | 2.9 | - | |||||||||||||||||||||||||||
Excluding executive separation costs | - | 11.0 | |||||||||||||||||||||||||||
Adjusted | $ | 638.5 | $ | 642.8 | 64.4 | 72.4 | |||||||||||||||||||||||
(1) | Please refer to the "Non-GAAP Financial Measures" section of the Press Release. | ||||||||||||||||||||||||||||
(2) | Tax benefit/expense is determined based on the amount of additional taxes or tax benefits associated with each individual item. | ||||||||||||||||||||||||||||
(3) | Diluted earnings per share amounts are calculated discretely and therefore may not add up to the total due to rounding. | ||||||||||||||||||||||||||||
(4) | Includes $2.1 million related to accelerated amortization and $0.8 million related to involuntary termination benefits. | ||||||||||||||||||||||||||||
(5) | Includes $7.3 million related to contract termination charges, $2.9 million related to accelerated depreciation, and $2.8 million related to asset impairments. | ||||||||||||||||||||||||||||
(6) | Both numerator and denominator are adjusted, as applicable. | ||||||||||||||||||||||||||||
AUTONATION, INC. | |||||||||||||||||||||||||||||
UNAUDITED SUPPLEMENTARY DATA, Continued | |||||||||||||||||||||||||||||
($ in millions, except per share data) | |||||||||||||||||||||||||||||
Comparable Basis Reconciliations(1) | |||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||
Gross Profit | Operating Income | Income from Continuing Operations Before | Income Tax Provision(2) | Effective Tax Rate | Net Income | Diluted Earnings Per Share(3) | |||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
As reported | $ | 230.1 | $ | 292.3 | $ | 2.59 | $ | 3.23 | |||||||||||||||||||||
Discontinued operations, net of income taxes | 0.2 | 0.8 | $ | - | $ | 0.01 | |||||||||||||||||||||||
From continuing operations, as reported | $ | 2,579.7 | $ | 2,627.4 | $ | 253.8 | $ | 587.8 | $ | 348.8 | $ | 401.4 | $ | 118.5 | $ | 108.3 | 34.0% | 27.0% | $ | 230.3 | $ | 293.1 | $ | 2.59 | $ | 3.24 | |||
Unrealized gain on equity investment | (212.7) | - | (53.7) | - | (159.0) | - | $ | (1.79) | $ | - | |||||||||||||||||||
ACP inventory valuation adjustment | 20.6 | - | 20.6 | - | 20.6 | - | 5.0 | - | 15.6 | - | $ | 0.18 | $ | - | |||||||||||||||
SG&A costs associated with exit of ACP business(4) | 2.9 | - | 2.9 | - | 0.7 | - | 2.2 | - | $ | 0.02 | $ | - | |||||||||||||||||
Other costs associated with exit of ACP business(5) | 13.0 | - | 13.0 | - | 3.1 | - | 9.9 | - | $ | 0.11 | $ | - | |||||||||||||||||
Executive separation costs | 5.5 | 11.0 | 5.5 | 11.0 | 1.0 | 0.8 | 4.5 | 10.2 | $ | 0.05 | $ | 0.11 | |||||||||||||||||
Goodwill and franchise rights impairment | 375.8 | 9.6 | 375.8 | 9.6 | 67.4 | 2.3 | 308.4 | 7.3 | $ | 3.47 | $ | 0.08 | |||||||||||||||||
Asset impairments and net gains on store/property dispositions | 8.4 | (13.5) | 8.4 | (13.5) | 2.2 | (3.3) | 6.2 | (10.2) | $ | 0.07 | $ | (0.11) | |||||||||||||||||
Adjusted | $ | 2,600.3 | $ | 2,627.4 | $ | 680.0 | $ | 594.9 | $ | 562.3 | $ | 408.5 | $ | 144.2 | $ | 108.1 | 25.6% | 26.5% | $ | 418.1 | $ | 300.4 | $ | 4.70 | $ | 3.32 | |||
(1) | Please refer to the "Non-GAAP Financial Measures" section of the Press Release. | ||||||||||||||||||||||||||||
(2) | Tax benefit/expense is determined based on the amount of additional taxes or tax benefits associated with each individual item. | ||||||||||||||||||||||||||||
(3) | Diluted earnings per share amounts are calculated discretely and therefore may not add up to the total due to rounding. | ||||||||||||||||||||||||||||
(4) | Includes $2.1 million related to accelerated amortization and $0.8 million related to involuntary termination benefits. | ||||||||||||||||||||||||||||
(5) | Includes $7.3 million related to contract termination charges, $2.9 million related to accelerated depreciation, and $2.8 million related to asset impairments. | ||||||||||||||||||||||||||||
AUTONATION, INC. | ||||||||||||||||||
UNAUDITED SAME STORE DATA | ||||||||||||||||||
($ in millions, except per vehicle data) | ||||||||||||||||||
Operating Highlights | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2020 | 2019 | $ Variance | % Variance | 2020 | 2019 | $ Variance | % Variance | |||||||||||
Revenue: | ||||||||||||||||||
New vehicle | $ | 2,748.4 | $ | 2,846.7 | $ | (98.3) | (3.5) | $ | 7,287.3 | $ | 8,030.1 | $ | (742.8) | (9.3) | ||||
Retail used vehicle | 1,421.0 | 1,312.7 | 108.3 | 8.3 | 3,842.6 | 3,836.1 | 6.5 | 0.2 | ||||||||||
Wholesale | 95.9 | 75.3 | 20.6 | 27.4 | 244.4 | 223.1 | 21.3 | 9.5 | ||||||||||
Used vehicle | 1,516.9 | 1,388.0 | 128.9 | 9.3 | 4,087.0 | 4,059.2 | 27.8 | 0.7 | ||||||||||
Finance and insurance, net | 281.3 | 263.8 | 17.5 | 6.6 | 763.2 | 748.4 | 14.8 | 2.0 | ||||||||||
Total variable operations | 4,546.6 | 4,498.5 | 48.1 | 1.1 | 12,137.5 | 12,837.7 | (700.2) | (5.5) | ||||||||||
Parts and service | 852.8 | 885.5 | (32.7) | (3.7) | 2,408.4 | 2,619.9 | (211.5) | (8.1) | ||||||||||
Other | 5.5 | 14.6 | (9.1) | 40.6 | 84.9 | (44.3) | ||||||||||||
Total revenue | $ | 5,404.9 | $ | 5,398.6 | $ | 6.3 | 0.1 | $ | 14,586.5 | $ | 15,542.5 | $ | (956.0) | (6.2) | ||||
Gross profit: | ||||||||||||||||||
New vehicle | $ | 167.3 | $ | 118.7 | $ | 48.6 | 40.9 | $ | 382.9 | $ | 364.6 | $ | 18.3 | 5.0 | ||||
Retail used vehicle | 128.8 | 87.3 | 41.5 | 47.5 | 318.4 | 260.0 | 58.4 | 22.5 | ||||||||||
Wholesale | 18.1 | 4.9 | 13.2 | 36.8 | 17.6 | 19.2 | ||||||||||||
Used vehicle | 146.9 | 92.2 | 54.7 | 59.3 | 355.2 | 277.6 | 77.6 | 28.0 | ||||||||||
Finance and insurance | 281.3 | 263.8 | 17.5 | 6.6 | 763.2 | 748.4 | 14.8 | 2.0 | ||||||||||
Total variable operations | 595.5 | 474.7 | 120.8 | 25.4 | 1,501.3 | 1,390.6 | 110.7 | 8.0 | ||||||||||
Parts and service | 375.6 | 403.1 | (27.5) | (6.8) | 1,074.7 | 1,196.9 | (122.2) | (10.2) | ||||||||||
Other | 0.8 | 1.1 | (0.3) | 2.4 | 3.9 | (1.5) | ||||||||||||
Total gross profit | $ | 971.9 | $ | 878.9 | $ | 93.0 | 10.6 | $ | 2,578.4 | $ | 2,591.4 | $ | (13.0) | (0.5) | ||||
Retail vehicle unit sales: | ||||||||||||||||||
New | 65,998 | 73,225 | (7,227) | (9.9) | 177,191 | 204,590 | (27,399) | (13.4) | ||||||||||
Used | 64,587 | 62,706 | 1,881 | 3.0 | 179,522 | 183,404 | (3,882) | (2.1) | ||||||||||
130,585 | 135,931 | (5,346) | (3.9) | 356,713 | 387,994 | (31,281) | (8.1) | |||||||||||
Revenue per vehicle retailed: | ||||||||||||||||||
New | $ | 41,644 | $ | 38,876 | $ | 2,768 | 7.1 | $ | 41,127 | $ | 39,250 | $ | 1,877 | 4.8 | ||||
Used | $ | 22,001 | $ | 20,934 | $ | 1,067 | 5.1 | $ | 21,405 | $ | 20,916 | $ | 489 | 2.3 | ||||
Gross profit per vehicle retailed: | ||||||||||||||||||
New | $ | 2,535 | $ | 1,621 | $ | 914 | 56.4 | $ | 2,161 | $ | 1,782 | $ | 379 | 21.3 | ||||
Used | $ | 1,994 | $ | 1,392 | $ | 602 | 43.2 | $ | 1,774 | $ | 1,418 | $ | 356 | 25.1 | ||||
Finance and insurance | $ | 2,154 | $ | 1,941 | $ | 213 | 11.0 | $ | 2,140 | $ | 1,929 | $ | 211 | 10.9 | ||||
Total variable operations(1) | $ | 4,422 | $ | 3,456 | $ | 966 | 28.0 | $ | 4,106 | $ | 3,539 | $ | 567 | 16.0 | ||||
Operating Percentages | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2020 (%) | 2019 (%) | 2020 (%) | 2019 (%) | |||||||||||||||
Revenue mix percentages: | ||||||||||||||||||
New vehicle | 50.9 | 52.7 | 50.0 | 51.7 | ||||||||||||||
Used vehicle | 28.1 | 25.7 | 28.0 | 26.1 | ||||||||||||||
Parts and service | 15.8 | 16.4 | 16.5 | 16.9 | ||||||||||||||
Finance and insurance, net | 5.2 | 4.9 | 5.2 | 4.8 | ||||||||||||||
Other | - | 0.3 | 0.3 | 0.5 | ||||||||||||||
100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Gross profit mix percentages: | ||||||||||||||||||
New vehicle | 17.2 | 13.5 | 14.9 | 14.1 | ||||||||||||||
Used vehicle | 15.1 | 10.5 | 13.8 | 10.7 | ||||||||||||||
Parts and service | 38.6 | 45.9 | 41.7 | 46.2 | ||||||||||||||
Finance and insurance | 28.9 | 30.0 | 29.6 | 28.9 | ||||||||||||||
Other | 0.2 | 0.1 | - | 0.1 | ||||||||||||||
100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||
Operating items as a percentage of revenue: | ||||||||||||||||||
Gross profit: | ||||||||||||||||||
New vehicle | 6.1 | 4.2 | 5.3 | 4.5 | ||||||||||||||
Used vehicle - retail | 9.1 | 6.7 | 8.3 | 6.8 | ||||||||||||||
Parts and service | 44.0 | 45.5 | 44.6 | 45.7 | ||||||||||||||
Total | 18.0 | 16.3 | 17.7 | 16.7 | ||||||||||||||
(1) | Total variable operations gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, retail used vehicle, and finance and insurance gross profit by total retail vehicle unit sales. | |||||||||||||||||
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SOURCE AutoNation, Inc.
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