Penske Automotive Reports Record Third Quarter 2018 Results

Penske Automotive Reports Record Third Quarter 2018 Results

Record Income From Continuing Operations Increases 38.0% to $130.1 Million and Earnings Per Share Increases 39.1% to $1.53

Record Adjusted Income From Continuing Operations Increases 25.7% to $118.5 Million

Record Adjusted Earnings Per Share From Continuing Operations Increases 27.3% to $1.40

PR Newswire

BLOOMFIELD HILLS, Mich., Oct. 25, 2018

BLOOMFIELD HILLS, Mich., Oct. 25, 2018 /PRNewswire/ -- Penske Automotive Group, Inc. (NYSE: PAG), an international transportation services company consisting of franchised retail automotive dealerships, stand-alone used vehicle supercenters, heavy and medium duty retail truck dealerships, and distribution of commercial trucks and power systems, today announced record third quarter and record nine months 2018 results. For the three months ended September 30, 2018, income from continuing operations attributable to common shareholders increased 38.0% to $130.1 million, and related earnings per share increased 39.1% to $1.53 when compared to the same period last year. Total revenue increased 2.4% to $5.7 billion, while same-store retail revenue increased 0.2%. Excluding foreign exchange, total revenue increased 2.9%, while same-store retail revenue increased 0.5%. Foreign exchange rates negatively impacted earnings per share attributable to common shareholders by $0.01. As a result of tax reform enacted in 2017, the company's effective tax rate in the third quarter of 2018 was 17.3% compared to 32.2% in the third quarter of 2017.

For the three and nine months ended September 30, 2018, income and earnings per share from continuing operations attributable to common shareholders included a tax benefit of $11.6 million, or $0.14 per share. This benefit relates to the final reconciliation of the income tax benefit related to the enactment of the 2017 U.S. Tax Cuts and Jobs Act. The third quarter 2018 adjustment primarily relates to reductions in the repatriation tax. Excluding this benefit, adjusted income from continuing operations increased 25.7% to $118.5 million, and related earnings per share increased 27.3% to $1.40 for the three months ended September 30, 2018.

"I am particularly pleased to report another quarter of record revenues, income from continuing operations and earnings per share, which continue to demonstrate the benefit of our diversification," said Penske Automotive Group Chairman Roger S. Penske. "The strength of our performance in the third quarter was driven by increases in new vehicle, used vehicle and finance & insurance gross profit per retail unit sold, coupled with a 70 basis-point increase in service and parts gross margin. Further, our U.K. business produced another record quarter on the strength of its premium brand mix and stand-alone used vehicle supercenter operations. Also contributing to the company's record third quarter was the 25.4% same-store retail revenue increase in the company's North American retail commercial truck business and our investment in Penske Truck Leasing."

For the nine months ended September 30, 2018, total record revenue increased 8.5% to $17.3 billion, with a 5.0% increase in same-store retail revenue. Record income from continuing operations attributable to common shareholders increased 31.5% to $372.7 million and related earnings per share increased 32.4% to $4.37 when compared to the same period last year. Excluding foreign exchange, total revenue increased 5.8%, while same-store retail revenue increased 2.3%. Foreign exchange rates positively impacted earnings per share attributable to common shareholders by $0.08. Excluding the tax benefit noted above, record adjusted income from continuing operations increased 27.4% to $361.1 million, and related earnings per share increased 28.2% to $4.23.

Automotive Retail Highlights of the Third Quarter

  • Same-Store Retail Unit Sales -2.2% to 123,799
    • New unit retail sales -6.6%
    • Used unit retail sales +2.1%
  • Same-Store Retail Revenue +0.2%; Excluding Foreign Exchange +0.5%
    • New -4.2%; Used +6.1%; Finance & Insurance +3.5%; Service and Parts +1.7%
  • Same-Store Average Gross Profit Per Unit
    • New $3,030, +$130/unit; Gross Margin 7.6%, +10 basis points
    • Used $1,504, +$62/unit; Gross Margin 5.7%, +0 basis points
    • Finance & Insurance $1,244, +$68/unit

Stand Alone Used SuperCenter Operations
The company operates fourteen stand-alone used vehicle supercenters, five of which are located in the U.S. and nine are located in the U.K., and one vehicle preparation center in the U.K. For the three and nine months ended September 30, 2018, these supercenters retailed 18,568 and 56,073 units of the company's total automotive units retailed, and generated $329.7 million and $1.0 billion in revenue, respectively. The company is in the process of developing four new stand-alone used vehicle supercenters which are expected to open in 2019. The expansion includes two new sites in the U.S. and another two in the U.K.

Retail Commercial Truck Operations
Penske Automotive Group operates twenty-one medium and heavy-duty truck dealership locations in the U.S. and Canada offering primarily Freightliner and Western Star brands. For the three and nine months ended September 30, 2018, total medium and heavy-duty units retailed increased 35.5% (33.8% same-store) and 44.1% (42.8% same-store), respectively. Same-store revenue increased 25.4% for the three months and 35.0% for the nine months ended September 30, 2018.

Penske Truck Leasing
Penske Truck Leasing Co., L.P. ("PTL") is a leading provider of full-service truck leasing, truck rental, contract maintenance, and logistics services. During the third quarter of 2017, the company increased its ownership interests in PTL by 5.5%, bringing our total ownership interest in PTL to 28.9%. The company accounts for its ownership interest in PTL using the equity method of accounting. For the three and nine months ended September 30, 2018, the company recorded $40.7 million and $91.7 million in earnings from this investment compared to $30.1 million and $66.9 million for the same periods last year, respectively.

Dividend and Share Repurchases
On October 17, 2018, the company announced that its Board of Directors increased the dividend to its common stock shareholders to $0.37 per share, the 30th consecutive increase in the quarterly dividend.

For the nine months ended September 30, 2018, the company repurchased 1,252,624 shares for $55.8 million. Approximately $150.0 million remains available to repurchase shares under the company's existing share repurchase authorization.

Conference Call
Penske Automotive Group will host a conference call discussing financial results relating to the third quarter of 2018 on Thursday, October 25, 2018, at 2:00 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial (800) 230‑1074 – [International, please dial (612) 288‑0329]. The call will also be simultaneously broadcast over the Internet through the Investor's section of the Penske Automotive Group website. Additionally, an investor presentation relating to the third quarter 2018 financial results has been posted to the company's website. To access the presentation or to listen to the company's webcast, please refer to www.penskeautomotive.com.

About Penske Automotive
Penske Automotive Group, Inc., (NYSE: PAG) headquartered in Bloomfield Hills, Michigan, is an international transportation services company that operates automotive and commercial truck dealerships principally in the United States, Canada, and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. PAG employs more than 26,000 people worldwide and is a member of the Fortune 500 and Russell 2000, and is ranked among the World's Most Admired Companies by Fortune Magazine. For additional information, visit the company's website at www.penskeautomotive.com.

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

Caution Concerning Forward Looking Statements
Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s future sales and earnings potential. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others: economic conditions generally, conditions in the credit markets and changes in interest rates and foreign currency exchange rates, changes in tariff rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters such as the recent hurricanes, recall or other disruptions that interrupt the supply of vehicles or parts to us, changes in consumer credit availability, the outcome of legal and administrative matters, and other factors over which management has limited control. These forward-looking statements should be evaluated together with additional information about Penske Automotive Group's business, markets, conditions and other uncertainties, which could affect Penske Automotive Group's future performance. These risks and uncertainties are addressed in Penske Automotive Group's Form 10‑K for the year ended December 31, 2017, and its other filings with the Securities and Exchange Commission ("SEC"). This press release speaks only as of its date, and Penske Automotive Group disclaims any duty to update the information herein.

Find a vehicle: http://www.penskecars.com
Engage Penske Automotive: http://www.penskesocial.com
Like Penske Automotive on Facebook: https://facebook.com/penskecars
Follow Penske Automotive on Twitter: https://twitter.com/penskecars
Visit Penske Automotive on YouTube: http://www.youtube.com/penskecars

Inquiries should contact:



J.D. Carlson

Anthony R. Pordon

Executive Vice President and

Executive Vice President Investor Relations

Chief Financial Officer

and Corporate Development

Penske Automotive Group, Inc.

Penske Automotive Group, Inc.

248-648-2810

248-648-2540

[email protected]

[email protected]

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Statements of Income

 (Amounts In Millions, Except Per Share Data)

(Unaudited)









Three Months Ended



Nine Months Ended



September 30,



September 30,



2018


2017


Change



2018


2017


Change

Revenue


$

5,658.6


$

5,524.4


2.4

%



$

17,345.8


$

15,988.9


8.5

%

Cost of Sales



4,806.0



4,701.8


2.2

%




14,739.0



13,574.7


8.6

%

Gross Profit


$

852.6


$

822.6


3.6

%



$

2,606.8


$

2,414.2


8.0

%

SG&A Expenses



662.8



646.1


2.6

%




2,001.3



1,869.8


7.0

%

Depreciation



25.9



24.3


6.6

%




77.2



70.0


10.3

%

Operating Income


$

163.9


$

152.2


7.7

%



$

528.3


$

474.4


11.4

%

Floor Plan Interest Expense



(20.2)



(16.4)


23.2

%




(59.0)



(45.6)


29.4

%

Other Interest Expense



(28.3)



(27.8)


1.8

%




(86.7)



(79.2)


9.5

%

Equity in Earnings of Affiliates



41.7



30.9


35.0

%




95.0



70.9


34.0

%

Income from Continuing Operations Before Income Taxes


$

157.1


$

138.9


13.1

%



$

477.6


$

420.5


13.6

%

Income Taxes



(27.1)



(44.7)


(39.4)

%




(104.7)



(136.0)


(23.0)

%

Income from Continuing Operations


$

130.0


$

94.2


38.0

%



$

372.9


$

284.5


31.1

%

Income (Loss) from Discontinued Operations, net of tax



0.1



0.1


—

%




0.2



(0.3)


nm

%

Net Income


$

130.1


$

94.3


38.0

%



$

373.1


$

284.2


31.3

%

Less: (Loss) Income Attributable to Non-Controlling Interests



(0.1)



(0.1)


—

%




0.2



1.0


(80.0)

%

Net Income Attributable to Common Shareholders


$

130.2


$

94.4


37.9

%



$

372.9


$

283.2


31.7

%





















Amounts Attributable to Common Shareholders:




















Reported Income from Continuing Operations


$

130.0


$

94.2


38.0

%



$

372.9


$

284.5


31.1

%

Less: (Loss) Income Attributable to Non-Controlling Interests



(0.1)



(0.1)


—

%




0.2



1.0


(80.0)

%

Income from Continuing Operations, net of tax


$

130.1


$

94.3


38.0

%



$

372.7


$

283.5


31.5

%

Income (Loss) from Discontinued Operations, net of tax



0.1



0.1


—

%




0.2



(0.3)


nm

%

Net Income Attributable to Common Shareholders


$

130.2


$

94.4


37.9

%



$

372.9


$

283.2


31.7

%

Income from Continuing Operations Per Share


$

1.53


$

1.10


39.1

%



$

4.37


$

3.30


32.4

%

Income Per Share


$

1.53


$

1.10


39.1

%



$

4.37


$

3.30


32.4

%

Weighted Average Shares Outstanding



84.9



86.0


(1.3)

%




85.3



85.9


(0.7)

%





















nm – not meaningful




















 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Balance Sheets

(Amounts In Millions)

(Unaudited)











September 30,


December 31,



2018


2017

Assets:







Cash and Cash Equivalents


$

37.6


$

45.7

Accounts Receivable, Net



953.4



954.9

Inventories



3,783.4



3,944.1

Other Current Assets



91.8



81.8

Total Current Assets



4,866.2



5,026.5

Property and Equipment, Net



2,178.2



2,108.6

Intangibles



2,164.5



2,134.5

Other Long-Term Assets



1,318.0



1,271.0

Total Assets


$

10,526.9


$

10,540.6








Liabilities and Equity:







Floor Plan Notes Payable


$

2,169.5


$

2,343.2

Floor Plan Notes Payable – Non-Trade



1,359.0



1,418.6

Accounts Payable



633.8



641.6

Accrued Expenses



570.2



523.5

Current Portion Long-Term Debt



92.7



72.8

Liabilities Held for Sale



0.7



0.7

Total Current Liabilities



4,825.9



5,000.4

Long-Term Debt



1,993.3



2,090.4

Other Long-Term Liabilities



1,095.7



1,021.8

Total Liabilities



7,914.9



8,112.6

Equity



2,612.0



2,428.0

Total Liabilities and Equity


$

10,526.9


$

10,540.6








Supplemental Balance Sheet Information







New vehicle days' supply



61



67

Used vehicle days' supply



48



55

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Operations

Selected Data

(Unaudited)


















Three Months Ended


Nine Months Ended




September 30,


September 30,




2018


2017


2018


2017


Geographic Revenue Mix:














North America



57.9

%


58.9

%


55.4

%


58.6

%

U.K.



34.4

%


33.8

%


36.0

%


33.9

%

Other International



7.7

%


7.3

%


8.6

%


7.5

%

Total



100.0

%


100.0

%


100.0

%


100.0

%















Revenue: (Amounts in Millions)














Retail Automotive


$

5,148.5


$

5,085.4


$

15,900.0


$

14,882.5


Retail Commercial Trucks



385.3



299.6



1,016.5



739.8


Commercial Vehicles Australia/Power Systems and Other



124.8



139.4



429.3



366.6


Total


$

5,658.6


$

5,524.4


$

17,345.8


$

15,988.9
















Gross Profit: (Amounts in Millions)














Retail Automotive


$

762.2


$

744.2


$

2,338.5


$

2,198.5


Retail Commercial Trucks



57.8



44.3



156.8



120.7


Commercial Vehicles Australia/Power Systems and Other



32.6



34.1



111.5



95.0


Total


$

852.6


$

822.6


$

2,606.8


$

2,414.2
















Gross Margin:














Retail Automotive



14.8

%


14.6

%


14.7

%


14.8

%

Retail Commercial Trucks



15.0

%


14.8

%


15.4

%


16.3

%

Commercial Vehicles Australia/Power Systems and Other



26.1

%


24.5

%


26.0

%


25.9

%

Total



15.1

%


14.9

%


15.0

%


15.1

%




Three Months Ended


Nine Months Ended




September 30,


September 30,



















2018



2017



2018



2017


Operating Items as a Percentage of Revenue:














Gross Profit



15.1

%


14.9

%


15.0

%


15.1

%

Selling, General and Administrative Expenses



11.7

%


11.7

%


11.5

%


11.7

%

Operating Income



2.9

%


2.8

%


3.0

%


3.0

%

Income from Continuing Operations Before Income Taxes



2.8

%


2.5

%


2.8

%


2.6

%















Operating Items as a Percentage of Total Gross Profit:














Selling, General and Administrative Expenses



77.7

%


78.5

%


76.8

%


77.5

%

Operating Income



19.2

%


18.5

%


20.3

%


19.7

%












Three Months Ended


Nine Months Ended




September 30,


September 30,










(Amounts in Millions)


2018


2017


2018


2017
















EBITDA*


$

211.3


$

191.0


$

641.5


$

569.7


Floorplan Credits


$

11.1


$

10.9


$

29.9


$

29.3


Rent Expense


$

58.4


$

59.3


$

175.3


$

168.1


Capital Expenditures


$

69.7


$

66.7


$

188.5


$

180.1


Stock Repurchases


$

—


$

10.0


$

55.8


$

18.5




* See the following Non-GAAP reconciliation table.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations

Selected Data – Revenue and Gross Profit Mix

(Unaudited)














Three Months Ended


Nine Months Ended




September 30,


September 30,




2018


2017


2018


2017


Retail Automotive Revenue Mix:










Premium:










BMW / MINI


23

%

22

%

22

%

23

%

Audi


12

%

15

%

13

%

14

%

Mercedes-Benz


9

%

10

%

9

%

10

%

Land Rover / Jaguar


9

%

8

%

9

%

8

%

Porsche


5

%

6

%

6

%

6

%

Ferrari / Maserati


3

%

3

%

3

%

3

%

Lexus


3

%

3

%

3

%

3

%

Acura


1

%

1

%

1

%

1

%

Bentley


1

%

1

%

1

%

1

%

Others


2

%

1

%

2

%

1

%

Total Premium


68

%

70

%

69

%

70

%

Volume Non-U.S.:










Toyota


11

%

10

%

10

%

10

%

Honda


7

%

7

%

6

%

7

%

Volkswagen


4

%

3

%

4

%

3

%

Nissan


1

%

1

%

1

%

1

%

Others


1

%

2

%

2

%

2

%

Total Volume Non-U.S.


24

%

23

%

23

%

23

%

U.S.:










General Motors / Chrysler / Ford


2

%

3

%

2

%

3

%

Stand-Alone Used


6

%

4

%

6

%

4

%

Total


100

%

100

%

100

%

100

%











Retail Automotive Geographic Revenue Mix:










U.S.


56

%

58

%

54

%

58

%

U.K.


38

%

37

%

39

%

36

%

Other International


6

%

5

%

7

%

6

%

Total


100

%

100

%

100

%

100

%











Retail Automotive Geographic Gross Profit Mix:










U.S.


59

%

62

%

58

%

62

%

U.K.


35

%

33

%

36

%

32

%

Other International


6

%

5

%

6

%

6

%

Total


100

%

100

%

100

%

100

%

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations

(Unaudited)
























Three Months Ended



Nine Months Ended



September 30,



September 30,



2018


2017


Change



2018


2017


Change

Retail Automotive Units:




















New Retail



58,933



64,365


(8.4)

%




179,266



187,377


(4.3)

%

Used Retail



72,000



65,892


9.3

%




218,371



194,384


12.3

%

Total



130,933



130,257


0.5

%




397,637



381,761


4.2

%





















Retail Automotive Revenue: (Amounts in Millions)




















New Vehicles


$

2,350.2


$

2,480.8


(5.3)

%



$

7,325.6


$

7,189.9


1.9

%

Used Vehicles



1,825.2



1,669.5


9.3

%




5,588.9



4,850.6


15.2

%

Finance and Insurance, Net



158.5



152.0


4.3

%




482.2



436.6


10.4

%

Service and Parts



523.8



520.9


0.6

%




1,615.1



1,540.1


4.9

%

Fleet and Wholesale



290.8



262.2


10.9

%




888.2



865.3


2.6

%

Total Revenue


$

5,148.5


$

5,085.4


1.2

%



$

15,900.0


$

14,882.5


6.8

%





















Retail Automotive Gross Profit: (Amounts in Millions)




















New Vehicles


$

179.8


$

185.2


(2.9)

%



$

552.8


$

552.6


—

%

Used Vehicles



105.3



94.5


11.4

%




327.5



282.4


16.0

%

Finance and Insurance, Net



158.5



152.0


4.3

%




482.2



436.6


10.4

%

Service and Parts



313.2



308.0


1.7

%




959.5



911.4


5.3

%

Fleet and Wholesale



5.4



4.5


20.0

%




16.5



15.5


6.5

%

Total Gross Profit


$

762.2


$

744.2


2.4

%



$

2,338.5


$

2,198.5


6.4

%





















Retail Automotive Revenue Per Vehicle Retailed:




















New Vehicles


$

39,880


$

38,542


3.5

%



$

40,865


$

38,371


6.5

%

Used Vehicles



25,350



25,337


0.1

%




25,593



24,954


2.6

%





















Retail Automotive Gross Profit Per Vehicle Retailed:




















New Vehicles


$

3,050


$

2,877


6.0

%



$

3,084


$

2,949


4.6

%

Used Vehicles



1,462



1,434


2.0

%




1,499



1,453


3.2

%

Finance and Insurance



1,210



1,167


3.7

%




1,212



1,144


5.9

%

Total Variable Gross Profit Per Vehicle (1)



3,388



3,314


2.2

%




3,426



3,331


2.9

%





















Retail Automotive Gross Margin:




















New Vehicles



7.7

%


7.5

%

+20

bps




7.5

%


7.7

%

-20

bps

Used Vehicles



5.8

%


5.7

%

+10

bps




5.9

%


5.8

%

+10

bps

Service and Parts



59.8

%


59.1

%

+70

bps




59.4

%


59.2

%

+20

bps

Fleet and Wholesale



1.9

%


1.7

%

+20

bps




1.9

%


1.8

%

+10

bps

Total Gross Margin



14.8

%


14.6

%

+20

bps




14.7

%


14.8

%

-10

bps





















Retail Automotive Revenue Mix Percentages:




















New Vehicles



45.6

%


48.8

%

-320

bps




46.1

%


48.3

%

-220

bps

Used Vehicles



35.5

%


32.8

%

+270

bps




35.2

%


32.6

%

+260

bps

Finance and Insurance, Net



3.1

%


3.0

%

+10

bps




3.0

%


2.9

%

+10

bps

Service and Parts



10.2

%


10.2

%

---

bps




10.2

%


10.3

%

-10

bps

Fleet and Wholesale



5.6

%


5.2

%

+40

bps




5.5

%


5.9

%

-40

bps

Total



100.0

%


100.0

%






100.0

%


100.0

%























Retail Automotive Gross Profit Mix Percentages:




















New Vehicles



23.6

%


24.9

%

-130

bps




23.6

%


25.1

%

-150

bps

Used Vehicles



13.8

%


12.7

%

+110

bps




14.0

%


12.8

%

+120

bps

Finance and Insurance, Net



20.8

%


20.4

%

+40

bps




20.6

%


19.9

%

+70

bps

Service and Parts



41.1

%


41.4

%

-30

bps




41.0

%


41.5

%

-50

bps

Fleet and Wholesale



0.7

%


0.6

%

+10

bps




0.8

%


0.7

%

+10

bps

Total



100.0

%


100.0

%






100.0

%


100.0

%





(1)

Calculated by dividing the sum of new vehicle, used vehicle, and finance and insurance gross profit by total retail automotive unit sales.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations Same-Store

(Unaudited)
























Three Months Ended



Nine Months Ended



September 30,



September 30,



2018


2017


Change



2018


2017


Change

Retail Automotive Same-Store Units:




















New Retail



58,463



62,591


(6.6)

%




174,763



179,632


(2.7)

%

Used Retail



65,336



63,986


2.1

%




158,547



155,676


1.8

%

Total



123,799



126,577


(2.2)

%




333,310



335,308


(0.6)

%





















Retail Automotive Same-Store Revenue: (Amounts in Millions)




















New Vehicles


$

2,324.3


$

2,426.9


(4.2)

%



$

7,070.3


$

6,901.2


2.5

%

Used Vehicles



1,729.5



1,630.8


6.1

%




4,617.4



4,242.7


8.8

%

Finance and Insurance, Net



154.1



148.9


3.5

%




413.1



386.1


7.0

%

Service and Parts



520.8



512.1


1.7

%




1,552.7



1,474.8


5.3

%

Fleet and Wholesale



280.4



255.7


9.7

%




738.3



764.3


(3.4)

%

Total Revenue


$

5,009.1


$

4,974.4


0.7

%



$

14,391.8


$

13,769.1


4.5

%





















Retail Automotive Same-Store Gross Profit: (Amounts in Millions)




















New Vehicles


$

177.2


$

181.5


(2.4)

%



$

528.9


$

529.8


(0.2)

%

Used Vehicles



98.3



92.3


6.5

%




256.9



234.3


9.6

%

Finance and Insurance, Net



154.1



148.9


3.5

%




413.1



386.1


7.0

%

Service and Parts



308.1



302.0


2.0

%




904.9



863.8


4.8

%

Fleet and Wholesale



5.1



4.4


15.9

%




11.9



13.8


(13.8)

%

Total Gross Profit


$

742.8


$

729.1


1.9

%



$

2,115.7


$

2,027.8


4.3

%





















Retail Automotive Same-Store Revenue Per Vehicle Retailed:




















New Vehicles


$

39,757


$

38,774


2.5

%



$

40,457


$

38,419


5.3

%

Used Vehicles



26,471



25,487


3.9

%




29,123



27,254


6.9

%





















Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:




















New Vehicles


$

3,030


$

2,900


4.5

%



$

3,027


$

2,949


2.6

%

Used Vehicles



1,504



1,442


4.3

%




1,620



1,505


7.6

%

Finance and Insurance



1,244



1,176


5.8

%




1,240



1,151


7.7

%

Total Variable Gross Profit Per Vehicle (1)



3,470



3,339


3.9

%




3,597



3,430


4.9

%





















Retail Automotive Same-Store Gross Margin:




















New Vehicles



7.6

%


7.5

%

+10

bps




7.5

%


7.7

%

-20

bps

Used Vehicles



5.7

%


5.7

%

---

bps




5.6

%


5.5

%

+10

bps

Service and Parts



59.2

%


59.0

%

+20

bps




58.3

%


58.6

%

-30

bps

Fleet and Wholesale



1.8

%


1.7

%

+10

bps




1.6

%


1.8

%

-20

bps

Total Gross Margin



14.8

%


14.7

%

+10

bps




14.7

%


14.7

%

---

bps





















Retail Automotive Revenue Mix Percentages:




















New Vehicles



46.4

%


48.8

%

-240

bps




49.1

%


50.1

%

-100

bps

Used Vehicles



34.5

%


32.8

%

+170

bps




32.1

%


30.8

%

+130

bps

Finance and Insurance, Net



3.1

%


3.0

%

+10

bps




2.9

%


2.8

%

+10

bps

Service and Parts



10.4

%


10.3

%

+10

bps




10.8

%


10.7

%

+10

bps

Fleet and Wholesale



5.6

%


5.1

%

+50

bps




5.1

%


5.6

%

-50

bps

Total



100.0

%


100.0

%






100.0

%


100.0

%























Retail Automotive Gross Profit Mix Percentages:




















New Vehicles



23.9

%


24.9

%

-100

bps




25.0

%


26.1

%

-110

bps

Used Vehicles



13.2

%


12.7

%

+50

bps




12.1

%


11.6

%

+50

bps

Finance and Insurance, Net



20.7

%


20.4

%

+30

bps




19.5

%


19.0

%

+50

bps

Service and Parts



41.5

%


41.4

%

+10

bps




42.8

%


42.6

%

+20

bps

Fleet and Wholesale



0.7

%


0.6

%

+10

bps




0.6

%


0.7

%

-10

bps

Total



100.0

%


100.0

%






100.0

%


100.0

%





(1)

Calculated by dividing the sum of new vehicle, used vehicle, and finance and insurance gross profit by total retail automotive unit sales.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Commercial Truck Operations

 (Unaudited)























Three Months Ended



Nine Months Ended



September 30,



September 30,



2018


2017


Change



2018


2017


Change

Retail Commercial Truck Units:




















New Retail



2,431



1,757


38.4

%




6,107



4,060


50.4

%

Used Retail



579



464


24.8

%




1,516



1,230


23.3

%

Total



3,010



2,221


35.5

%




7,623



5,290


44.1

%





















Retail Commercial Truck Revenue: (Amounts in Millions)




















New Vehicles


$

249.4


$

184.3


35.3

%



$

630.5


$

411.5


53.2

%

Used Vehicles



32.5



25.7


26.5

%




86.3



67.9


27.1

%

Finance and Insurance, Net



2.9



2.1


38.1

%




9.0



6.6


36.4

%

Service and Parts



93.1



83.3


11.8

%




275.7



244.6


12.7

%

Other



7.4



4.2


76.2

%




15.0



9.2


63.0

%

Total Revenue


$

385.3


$

299.6


28.6

%



$

1,016.5


$

739.8


37.4

%





















Retail Commercial Truck Gross Profit: (Amounts in
Millions)




















New Vehicles


$

12.0


$

7.9


51.9

%



$

28.2


$

17.4


62.1

%

Used Vehicles



4.0



2.6


53.8

%




9.8



6.1


60.7

%

Finance and Insurance, Net



2.9



2.1


38.1

%




9.0



6.6


36.4

%

Service and Parts



36.4



31.7


14.8

%




106.3



90.8


17.1

%

Other



2.5



—


nm





3.5



(0.2)


nm


Total Gross Profit


$

57.8


$

44.3


30.5

%



$

156.8


$

120.7


29.9

%





















Retail Commercial Truck Revenue Per Vehicle Retailed:




















New Vehicles


$

102,610


$

104,874


(2.2)

%



$

103,257


$

101,332


1.9

%

Used Vehicles



56,214



55,387


1.5

%




56,943



55,158


3.2

%





















Retail Commercial Truck Gross Profit Per Vehicle Retailed:




















New Vehicles


$

4,952


$

4,479


10.6

%



$

4,620


$

4,286


7.8

%

Used Vehicles



6,986



5,500


27.0

%




6,476



4,912


31.8

%

Finance and Insurance



948



959


(1.1)

%




1,183



1,244


(4.9)

%

Total Variable Gross Profit Per Vehicle (1)



6,279



5,673


10.7

%




6,166



5,690


8.4

%





















Retail Commercial Truck Gross Margin:




















New Vehicles



4.8

%


4.3

%

+50

bps




4.5

%


4.2

%

+30

bps

Used Vehicles



12.3

%


10.1

%

+220

bps




11.4

%


9.0

%

+240

bps

Service and Parts



39.1

%


38.1

%

+100

bps




38.6

%


37.1

%

+150

bps

Total Gross Margin



15.0

%


14.8

%

+20

bps




15.4

%


16.3

%

-90

bps





















Retail Commercial Truck Revenue Mix Percentages:




















New Vehicles



64.7

%


61.5

%

+320

bps




62.0

%


55.6

%

+640

bps

Used Vehicles



8.4

%


8.6

%

-20

bps




8.5

%


9.2

%

-70

bps

Finance and Insurance, Net



0.8

%


0.7

%

+10

bps




0.9

%


0.9

%

---

bps

Service and Parts



24.2

%


27.8

%

-360

bps




27.1

%


33.1

%

-600

bps

Other



1.9

%


1.4

%

+50

bps




1.5

%


1.2

%

+30

bps

Total



100.0

%


100.0

%






100.0

%


100.0

%























Retail Commercial Truck Gross Profit Mix Percentages:




















New Vehicles



20.8

%


17.8

%

+300

bps




18.0

%


14.4

%

+360

bps

Used Vehicles



6.9

%


5.9

%

+100

bps




6.3

%


5.1

%

+120

bps

Finance and Insurance, Net



5.0

%


4.7

%

+30

bps




5.7

%


5.5

%

+20

bps

Service and Parts



63.0

%


71.6

%

-860

bps




67.8

%


75.2

%

-740

bps

Other



4.3

%


—

%

+430

bps




2.2

%


(0.2)

%

+240

bps

Total



100.0

%


100.0

%






100.0

%


100.0

%





(1)

Calculated by dividing the sum of new vehicle, used vehicle, and finance and insurance gross profit by total retail commercial truck unit sales.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Retail Commercial Truck Operations Same-Store

 (Unaudited)























Three Months Ended



Nine Months Ended



September 30,



September 30,



2018


2017


Change



2018


2017


Change

Retail Commercial Truck Same-Store Units:




















New Retail



2,393



1,757


36.2

%




6,039



4,060


48.7

%

Used Retail



578



464


24.6

%




1,514



1,230


23.1

%

Total



2,971



2,221


33.8

%




7,553



5,290


42.8

%





















Retail Commercial Truck Same-Store Revenue: (Amounts in
Millions)




















New Vehicles


$

243.2


$

184.3


32.0

%



$

620.7


$

411.5


50.8

%

Used Vehicles



32.5



25.7


26.5

%




86.2



67.9


27.0

%

Finance and Insurance, Net



2.8



2.1


33.3

%




7.2



6.6


9.1

%

Service and Parts



91.8



83.3


10.2

%




272.7



244.6


11.5

%

Other



5.4



4.2


28.6

%




11.8



9.2


28.3

%

Total Revenue


$

375.7


$

299.6


25.4

%



$

998.6


$

739.8


35.0

%





















Retail Commercial Truck Same-Store Gross Profit: (Amounts in
Millions)




















New Vehicles


$

11.7


$

7.9


48.1

%



$

27.6


$

17.4


58.6

%

Used Vehicles



4.0



2.6


53.8

%




9.8



6.1


60.7

%

Finance and Insurance, Net



2.8



2.1


33.3

%




7.2



6.6


9.1

%

Service and Parts



35.8



31.7


12.9

%




104.9



90.8


15.5

%

Other



0.5



—


nm





0.7



(0.2)


nm


Total Gross Profit


$

54.8


$

44.3


23.7

%



$

150.2


$

120.7


24.4

%





















Retail Commercial Truck Same-Store Revenue Per Vehicle Retailed:




















New Vehicles


$

101,629


$

104,874


(3.1)

%



$

102,786


$

101,332


1.4

%

Used Vehicles



56,270



55,387


1.6

%




56,962



55,158


3.3

%





















Retail Commercial Truck Same-Store Gross Profit Per Vehicle
Retailed:




















New Vehicles


$

4,898


$

4,479


9.4

%



$

4,572


$

4,286


6.7

%

Used Vehicles



6,995



5,500


27.2

%




6,471



4,912


31.7

%

Finance and Insurance



937



959


(2.3)

%




952



1,244


(23.5)

%

Total Variable Gross Profit Per Vehicle (1)



6,227



5,673


9.8

%




5,905



5,690


3.8

%





















Retail Commercial Truck Same-Store Gross Margin:




















New Vehicles



4.8

%


4.3

%

+50

bps




4.4

%


4.2

%

+20

bps

Used Vehicles



12.3

%


10.1

%

+220

bps




11.4

%


9.0

%

+240

bps

Service and Parts



39.0

%


38.1

%

+90

bps




38.5

%


37.1

%

+140

bps

Total Gross Margin



14.6

%


14.8

%

-20

bps




15.0

%


16.3

%

-130

bps





















Retail Commercial Truck Revenue Mix Percentages:




















New Vehicles



64.7

%


61.5

%

+320

bps




62.2

%


55.6

%

+660

bps

Used Vehicles



8.7

%


8.6

%

+10

bps




8.6

%


9.2

%

-60

bps

Finance and Insurance, Net



0.7

%


0.7

%

---

bps




0.7

%


0.9

%

-20

bps

Service and Parts



24.4

%


27.8

%

-340

bps




27.3

%


33.1

%

-580

bps

Other



1.5

%


1.4

%

+10

bps




1.2

%


1.2

%

---

bps

Total



100.0

%


100.0

%






100.0

%


100.0

%























Retail Commercial Truck Gross Profit Mix Percentages:




















New Vehicles



21.4

%


17.8

%

+360

bps




18.4

%


14.4

%

+400

bps

Used Vehicles



7.3

%


5.9

%

+140

bps




6.5

%


5.1

%

+140

bps

Finance and Insurance, Net



5.1

%


4.7

%

+40

bps




4.8

%


5.5

%

-70

bps

Service and Parts



65.3

%


71.6

%

-630

bps




69.8

%


75.2

%

-540

bps

Other



0.9

%


—

%

+90

bps




0.5

%


(0.2)

%

+70

bps

Total



100.0

%


100.0

%






100.0

%


100.0

%





(1)

Calculated by dividing the sum of new vehicle, used vehicle, and finance and insurance gross profit by total retail commercial truck unit sales.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Non-GAAP Reconciliations

(Unaudited)



The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three and nine months ended September 30, 2018 and 2017:



Income from Continuing Operations:


















Three Months Ended



 

Nine Months Ended




September 30,



September 30,


(Amounts in Millions)


2018



2017


% Change



2018



2017


% Change























Income from Continuing Operations


$

130.1



$

94.3


38.0

%


$

372.7



$

283.5


31.5

%

Less: Income tax benefit (1)



(11.6)




—


nm




(11.6)




—


nm


Adjusted Income from Continuing Operations


$

118.5



$

94.3


25.7

%


$

361.1



$

283.5


27.4

%











































Earnings Per Share:












































Three Months Ended



Nine Months Ended




September 30,



September 30,




2018



2017


% Change



2018



2017


% Change























Earnings Per Share from Continuing Operations


$

1.53



$

1.10


39.1

%


$

4.37



$

3.30


32.4

%

Less: Income tax benefit (1)



(0.14)




—


nm




(0.14)




—


nm


Adjusted Earnings Per Share from Continuing Operations


$

1.40

(2)


$

1.10


27.3

%


$

4.23



$

3.30


28.2

%


(1)    This benefit relates to the final reconciliation of the income tax benefit related to the enactment of the 2017 U.S. Tax Cuts and Jobs Act.

(2)     Earnings per share amounts may not sum due to rounding.



The following tables reconcile reported net income to earnings before interest, taxes, depreciation and amortization ("EBITDA") for the three and nine months ended September 30, 2018 and 2017:















Three Months Ended

















September 30,


2018 vs. 2017

(Amounts in Millions)











2018


2017


Change


% Change























Net Income











$

130.1


$

94.3


$

35.8


38.0

%

Add: Depreciation












25.9



24.3



1.6


6.6

%

Other Interest Expense












28.3



27.8



0.5


1.8

%

Income Taxes












27.1



44.7



(17.6)


(39.4)

%

(Income) from Discontinued Operations, net of tax












(0.1)



(0.1)



—


—


EBITDA











$

211.3


$

191.0


$

20.3


10.6

%


































Nine Months Ended


















September 30,


2018 vs. 2017

(Amounts in Millions)











2018


2017


Change


% Change























Net Income











$

373.1


$

284.2


$

88.9


31.3

%

Add: Depreciation












77.2



70.0



7.2


10.3

%

Other Interest Expense












86.7



79.2



7.5


9.5

%

Income Taxes












104.7



136.0



(31.3)


(23.0)

%

(Income) Loss from Discontinued Operations, net of tax












(0.2)



0.3



(0.5)


nm


EBITDA











$

641.5


$

569.7


$

71.8


12.6

%























nm – not meaningful






















 

Penske Automotive Group logo. (PRNewsFoto/Penske Automotive Group)

 

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SOURCE Penske Automotive Group, Inc.

Copyright CNW Group 2018