10-Q 1 h87316e10-q.txt GROUP 1 AUTOMOTIE INC - PERIOD ENDED MARCH 31,2001 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 Commission file number: 1-13461 GROUP 1 AUTOMOTIVE, INC. (Exact name of Registrant as specified in its charter) Delaware 76-0506313 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 950 Echo Lane, Suite 100 Houston, Texas 77024 (Address of principal executive offices) (Zip code) (713) 647-5700 (Registrant's telephone number including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Title Outstanding ----- ----------- Common stock, par value $.01 19,481,283 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS GROUP 1 AUTOMOTIVE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands)
MARCH 31, DECEMBER 31, 2001 2000 ------------- ------------- (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 144,893 $ 140,878 Accounts and notes receivable, net 38,232 39,709 Inventories, net 511,060 527,101 Deferred income taxes 7,690 7,661 Other assets 3,999 5,190 ------------- ------------- Total current assets 705,874 720,539 ------------- ------------- PROPERTY 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 Current maturities of long-term debt 1,266 1,506 Accounts payable 70,349 57,872 Accrued expenses 52,194 69,685 ------------- ------------- Total current liabilities 622,001 665,770 ------------- ------------- DEBT, net of current maturities 65,555 45,949 SENIOR SUBORDINATED NOTES 94,481 94,444 DEFERRED INCOME TAXES 9,449 8,668 OTHER LIABILITIES 36,967 37,306 STOCKHOLDERS' EQUITY: Preferred stock, 1,000,000 shares authorized, none issued or outstanding -- -- Common stock, $.01 par value, 50,000,000 shares authorized, 19,716,069 and 21,260,227 issued 197 213 Additional paid-in capital 153,291 170,683 Retained earnings 101,838 92,517 Treasury stock, at cost, 294,004 and 1,494,488 shares (2,882) (15,997) ------------- ------------- Total stockholders' equity 252,444 247,416 ------------- ------------- Total liabilities and stockholders' equity $ 1,080,897 $ 1,099,553 ============= =============
The accompanying notes are an integral part of these consolidated financial statements. 2 3 GROUP 1 AUTOMOTIVE, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in thousands, except per share amounts)
THREE MONTHS ENDED MARCH 31, ---------------------------------- 2001 2000 --------------- --------------- REVENUES: New vehicle $ 537,442 $ 511,417 Used vehicle 274,658 249,697 Parts and service 84,771 72,844 Other dealership revenues, net 31,993 25,953 --------------- --------------- Total revenues 928,864 859,911 COST OF SALES: New vehicle 498,072 471,807 Used vehicle 250,835 229,625 Parts and 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 AND EXPENSES: 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 =============== =============== Earnings per share: Basic $ 0.47 $ 0.40 Diluted $ 0.47 $ 0.40 Weighted average shares outstanding: Basic 19,691,449 22,384,332 Diluted 20,006,717 22,781,689
The accompanying notes are an integral part of these consolidated financial statements. 3 4 GROUP 1 AUTOMOTIVE, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands)
THREE MONTHS ENDED MARCH 31, ------------------------------ 2001 2000 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 9,321 $ 9,013 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,231 3,761 Deferred income taxes 104 311 Provision for doubtful accounts and uncollectible notes 170 356 (Gain) Loss on sale of assets (21) 17 Gain on sale of franchise -- (1,048) Changes in assets and liabilities: Accounts receivable 1,731 (688) Inventories 3,142 (33,009) Other assets 471 355 Floorplan notes payable (25,826) 31,271 Accounts payable and accrued expenses 9,702 4,543 ------------- ------------- Total adjustments (6,296) 5,869 ------------- ------------- Net cash provided by operating activities 3,025 14,882 ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Increase in notes receivable (918) (914) Collections on notes receivable 292 460 Purchases of property and equipment (3,111) (4,760) Proceeds from sales of property and equipment 125 443 Proceeds from sales of franchises 3,973 9,700 Cash paid in acquisitions, net of cash received -- (37,490) ------------- ------------- Net cash provided (used) by investing activities 361 (32,561) ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings on acquisition tranche of revolving credit facility 19,750 21,000 Principal payments of long-term debt (405) (485) Borrowings of long-term debt 21 489 Purchase of senior subordinated notes -- (957) Proceeds from issuance of common stock to benefit plans 650 856 Purchase of treasury stock (19,387) (785) ------------- ------------- Net cash provided by financing activities 629 20,118 ------------- ------------- NET INCREASE IN CASH AND CASH EQUIVALENTS 4,015 2,439 CASH AND CASH EQUIVALENTS, beginning of period 140,878 118,824 ------------- ------------- CASH AND CASH EQUIVALENTS, end of period $ 144,893 $ 121,263 ============= ============= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for - Interest $ 17,030 $ 14,911 Taxes $ 713 $ 140
The accompanying notes are an integral part of these consolidated financial statements. 4 5 GROUP 1 AUTOMOTIVE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. BUSINESS AND ORGANIZATION: Group 1 Automotive, Inc. is a leading operator in the automotive retailing industry. Group 1 Automotive, Inc. is a holding company with its primary operations and assets being its investments in its subsidiaries. These subsidiaries sell new and used cars and light trucks through their dealerships and Internet sites, provide maintenance and repair services and arrange vehicle finance, service and insurance contracts. Group 1 Automotive, Inc. and its subsidiaries are herein collectively referred to as the "Company" or "Group 1". 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation/Reclassifications All acquisitions completed during the periods presented have been accounted for using the purchase method of accounting and their results of operations are included from the effective dates of the closings of the acquisitions. The allocations of purchase price to the assets acquired and liabilities assumed are initially assigned and recorded based on preliminary estimates of fair value and may be revised as additional information concerning the valuation of such assets and liabilities becomes available. All significant intercompany balances and transactions have been eliminated in consolidation. Interim Financial Information These interim financial statements are unaudited, and certain information normally included in financial statements prepared in accordance with generally accepted accounting principles has not been included herein. In the opinion of management, all adjustments necessary to fairly present the financial position, results of operations and cash flows with respect to the interim financial statements, have been properly included. Due to seasonality and other factors, the results of operations for the interim periods are not necessarily indicative of the results that will be realized for the entire fiscal year. 3. EARNINGS PER SHARE: Statement of Financial Accounting Standards ("SFAS") No. 128 requires the presentation of basic earnings per share and diluted earnings per share in financial statements of public enterprises. Under the provisions of this statement, basic earnings per share is computed based on weighted average shares outstanding and excludes dilutive securities. Diluted earnings per share is computed including the impacts of all potentially dilutive securities. The following table sets forth the shares outstanding for the earnings per share calculations: 5 6
THREE MONTHS ENDED MARCH 31, ------------------------------ 2001 2000 ------------- ------------- Common stock outstanding, beginning of period ....................................... 21,260,227 21,801,367 Weighted average common stock issued - Acquisitions ................................................................... -- 633,888 Employee Stock Purchase Plan ................................................... 76,526 72,483 Stock option exercises ......................................................... 4,200 -- Less: Weighted average treasury shares purchased and weighted average shares repurchased and cancelled ......................................... (1,649,504) (123,406) ------------- ------------- Shares used in computing basic earnings per share ................................... 19,691,449 22,384,332 Dilutive effect of stock options, net of assumed repurchase of treasury stock ..... 315,268 397,357 ------------- ------------- Shares used in computing diluted earnings per share ................................. 20,006,717 22,781,689 ============= =============
4. SENIOR SUBORDINATED NOTES: The Company completed the offering of $100 million of its 10 7/8% Senior Subordinated Notes due 2009 (the "Notes") on March 5, 1999. The Notes pay interest semi-annually on March 1 and September 1, each year. Before March 1, 2002, the Company may redeem up to $35 million of the Notes with the proceeds of certain public offerings of common stock at a redemption price of 110.875% of the principal amount plus accrued interest to the redemption date. Additionally, the Company may redeem all or part of the Notes at redemption prices of 105.438%, 103.625%, 101.813% and 100.000% of the principal amount plus accrued interest during the twelve-month periods beginning March 1, of 2004, 2005, 2006, and 2007 and thereafter, respectively. The Notes are jointly and severally guaranteed, on an unsecured senior subordinated basis, by all subsidiaries of the Company (the "Subsidiary Guarantors"), other than certain minor subsidiaries. All of the Subsidiary Guarantors are wholly-owned subsidiaries of the Company. Certain manufacturers have minimum working capital guidelines, which may limit a subsidiary's ability to make distributions to the parent company. 6 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following should be read in conjunction with the response to Part I, Item 1 of this Report and our other filings with the Securities and Exchange Commission ("SEC"). OVERVIEW We are a leading operator in the automotive retailing industry. We own automobile dealership franchises located in Texas, Oklahoma, Florida, New Mexico, Colorado, Georgia, Louisiana and Massachusetts. Through our dealerships and Internet sites, we sell new and used cars and light trucks, and provide maintenance and repair services. We also operate 22 collision service centers. We have diverse sources of revenues, including: new car sales, new truck sales, used car sales, used truck sales, manufacturer remarketed vehicle sales, parts sales, service sales, collision repair service sales, finance fees, insurance commissions, vehicle service contract commissions, documentary fees and after-market product sales. Sales revenues from new and used vehicle sales and parts and service sales include sales to retail customers, other dealerships and wholesalers. Other dealership revenues includes revenues from arranging financing, insurance and vehicle service contracts, net of a provision for anticipated chargebacks, and documentary fees. Our total gross margin varies as our merchandise mix (the mix between new vehicle sales, used vehicle sales, parts and service sales, collision repair service sales and other dealership revenues) changes. Our gross margin on the sale of products and services generally varies significantly, with new vehicle sales generally resulting in the lowest gross margin and other dealership revenues generally resulting in the highest gross margin. When our new vehicle sales increase or decrease at a rate greater than our other revenue sources, our gross margin responds inversely. Factors such as seasonality, weather, cyclicality and manufacturers' advertising and incentives may impact our merchandise mix and, therefore, influence our gross margin. Selling, general and administrative expenses consist primarily of compensation for sales, administrative, finance and general management personnel, rent, marketing, insurance and utilities. Interest expense consists of interest charges on interest-bearing debt, including floorplan inventory financing, net of interest income earned. We believe that approximately 60% of our selling, general and administrative expenses are variable, allowing us to adjust our cost structure based on business trends. SELECTED OPERATIONAL AND FINANCIAL DATA FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2001 AND MARCH 31, 2000 NEW VEHICLE DATA
(dollars in thousands, except per unit amounts) INCREASE/ PERCENT 2001 2000 (DECREASE) CHANGE ------------- ------------- ------------- ------------- Retail unit sales ............................ 20,726 20,779 (53) (0.3)% Retail sales revenues ........................ $ 537,442 $ 511,417 $ 26,025 5.1% Gross profit ................................. $ 39,370 $ 39,610 $ (240) (0.6)% Average gross profit per retail unit sold .... $ 1,900 $ 1,906 $ (6) (0.3)% Gross margin ................................. 7.3% 7.7% (0.4)%
7 8 USED VEHICLE DATA
(dollars in thousands, except per unit amounts) PERCENT 2001 2000 INCREASE CHANGE ------------- ------------- ------------- ---------- Retail unit sales .......................................... 16,500 14,651 1,849 12.6% Retail sales revenues (1) .................................. $ 225,099 $ 198,602 $ 26,497 13.3% Gross profit ............................................... $ 23,823 $ 20,072 $ 3,751 18.7% Average gross profit per retail unit sold .................. $ 1,443 $ 1,370 $ 73 5.3% Gross margin ............................................... 10.6% 10.1% 0.5%
---------- (1) Excludes used vehicle wholesale revenues, as these transactions facilitate retail vehicle sales and are not expected to generate profit. PARTS AND SERVICE DATA
(dollars in thousands) PERCENT 2001 2000 INCREASE CHANGE ------------- ------------- ------------- ------------- Sales revenues ............................................. $ 84,771 $ 72,844 $ 11,927 16.4% Gross profit ............................................... $ 46,742 $ 39,715 $ 7,027 17.7% Gross margin ............................................... 55.1% 54.5% 0.6%
OTHER DEALERSHIP REVENUES, NET
(dollars in thousands, except per unit amounts) PERCENT 2001 2000 INCREASE CHANGE ------------- ------------- ------------- ------------- Retail new and used unit sales ............................. 37,226 35,430 1,796 5.1% Retail sales revenues ...................................... $ 31,993 $ 25,953 $ 6,040 23.3% Other dealership revenues, net per retail unit sold ......................................... $ 859 $ 733 $ 126 17.2%
SAME STORE REVENUES COMPARISON (2)
(dollars in thousands) PERCENT 2001 2000 INCREASE CHANGE ------------- ------------- ------------- ------------- New vehicle ................................................ $ 502,935 $ 498,247 $ 4,688 0.9% Used vehicle ............................................... 255,018 243,346 11,672 4.8% Parts and service .......................................... 77,343 70,957 6,386 9.0% Other dealership revenues, net ............................. 29,980 24,306 5,674 23.3% ------------- ------------- ------------- ------- Total revenues ............................. $ 865,276 $ 836,856 $ 28,420 3.4%
---------- (2) Includes only those dealerships owned during all of the months of both periods in the comparison. 8 9 THREE MONTHS ENDED MARCH 31, 2001 COMPARED WITH THREE MONTHS ENDED MARCH 31, 2000 REVENUES. Revenues increased $69.0 million, or 8.0%, to $928.9 million for the three months ended March 31, 2001, from $859.9 million for the three months ended March 31, 2000. Our same store new vehicle retail unit sales declined 4.3% and was almost totally offset by sales at dealerships acquired since April 1, 2000. Although new vehicle unit sales were stable, new vehicle revenues increased as trucks, which have a higher average selling price than cars, and luxury vehicles became a greater percentage of our business and due to minor inflation in new vehicle prices. The growth in used vehicle revenues was primarily attributable to the additional dealership operations acquired and expanded operations in Denver, south Florida and Oklahoma. The increase in parts and service revenues was due to the additional dealership operations acquired, coupled with strong organic growth in the Houston, south Florida and Oklahoma markets. Other dealership revenues increased primarily due to increased sales training and a favorable interest rate environment. GROSS PROFIT. Gross profit increased $16.5 million, or 13.2%, to $141.9 million for the three months ended March 31, 2001, from $125.4 million for the three months ended March 31, 2000. The increase was attributable to increased revenues and an increase in gross margin from 14.6% for the three months ended March 31, 2000, to 15.3% for the three months ended March 31, 2001. The gross margin increased as lower margin new vehicle revenues decreased as a percentage of total revenues to 57.9% from 59.5%. The gross margin on new retail vehicle sales declined to 7.3% from 7.7%, due to aggressively marketing excess inventory and deferring recognition of certain incentives on Ford vehicles sold until the incentives are collected from Ford. The gross margin on retail used vehicle sales increased to 10.6% from 10.1% due primarily to increased focus on used vehicle sales in Oklahoma, New Mexico and Georgia. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses increased $13.4 million, or 14.0%, to $109.2 million for the three months ended March 31, 2001, from $95.8 million for the three months ended March 31, 2000. The increase was primarily attributable to the additional dealership operations acquired and increased variable expenses, particularly incentive pay to employees, which increased as gross profit increased. Selling, general and administrative expenses increased as a percentage of gross profit to 76.9% from 76.4% due primarily to increased compensation and advertising expenses as we moved aggressively to sell excess new vehicle inventory. INTEREST EXPENSE. Floorplan and other interest expense, net, increased $1.2 million, or 9.8%, to $13.5 million for the three months ended March 31, 2001, from $12.3 million for the three months ended March 31, 2000. The increase was due to an increase in total debt outstanding. The increase in debt outstanding was primarily attributable to the floorplan borrowings of the additional dealership operations acquired, additional floorplan borrowings due to above target inventory levels resulting from a slow down in new vehicle sales and additional borrowings to complete share repurchases. Partially mitigating the increase in borrowings was a 42 basis point rate reduction of the average LIBOR. OTHER INCOME, NET. Other income, net, decreased $986,000 to $38,000 for the three months ended March 31, 2001, from $1,024,000 for the three months ended March 31, 2000. The difference is due primarily to a $1.0 million gain from the sale of a Chrysler franchise in Austin, Texas, during 2000. LIQUIDITY AND CAPITAL RESOURCES Our principal sources of liquidity are cash on hand, cash from operations, our credit facility, which includes the floorplan tranche and the acquisition tranche, and equity and debt offerings. CASH FLOWS OPERATING ACTIVITIES. During the first three months of 2001 we generated cash flow from operations of approximately $3.0 million, a decrease of $11.9 million compared to the same period in the prior year. Cash flow from operations decreased as floorplan payoffs exceeded cash received from the reduction of inventories. This was due primarily to reducing excess new vehicle inventory, which is 100% financed by floorplan notes payable, while increasing used vehicle inventories which are only 9 10 approximately 50% financed by floorplan notes payable. Excluding working capital changes, cash flows from operating activities increased $1.4 million over the prior year period. INVESTING ACTIVITIES. During the first three months of 2001 we obtained approximately $0.4 million from investing activities, primarily related to cash received from sales of franchises, net of cash used to purchase property and equipment. We paid $3.1 million for purchases of property and equipment, of which $1.9 million was used for the purchase of land and construction of facilities for new or expanded operations. FINANCING ACTIVITIES. During the first three months of 2001 we obtained approximately $0.6 million from financing activities, primarily from borrowings under our credit facility net of payments for purchases of treasury stock. WORKING CAPITAL. At March 31, 2001, we had working capital of $83.9 million. Historically, we have funded our operations with internally generated cash flow and borrowings. Certain manufacturers have minimum working capital guidelines, which may limit a subsidiary's ability to make distributions to the parent company. While we cannot guarantee it, based on current facts and circumstances, we believe we have adequate cash flows coupled with borrowings under our credit facility to fund our current operations. CREDIT FACILITY We have a $900 million credit facility, which matures in December 2003. The credit facility consists of two tranches: the floorplan and acquisition tranches. The acquisition tranche totals $198 million and, as of May 1, 2003, $152.5 million was available, subject to a cash flow calculation and the maintenance of certain financial ratios and various covenants. CAPITAL EXPENDITURES Our capital expenditures include expenditures to extend the useful life of current facilities and expenditures to start or expand operations. Historically, our annual capital expenditures, exclusive of new or expanded operations, have approximately equaled our annual depreciation charge. Expenditures relating to the construction or expansion of dealership facilities, generally, are driven by new franchises being awarded to us by a manufacturer or significant growth in sales at an existing facility. During 2001, we plan to invest approximately $10 million to expand six existing facilities and prepare three new facilities for operations. ACQUISITION FINANCING We anticipate investing between $20 million and $30 million in completing tuck-in acquisitions during 2001. We expect the cash needed to complete our acquisitions will come from the operating cash flows of our existing dealerships and borrowings under our current credit facility. STOCK REPURCHASE The board of directors has authorized us to repurchase a portion of our stock, subject to management's judgment and the restrictions of our various debt agreements. Our agreements, subject to other covenants, allow us to spend approximately 33% of our cumulative net income to repurchase stock. During the first quarter of 2001, we repurchased approximately 420,000 shares for $4.9 million, excluding shares repurchased to fulfill obligations under our employee stock purchase plan. We anticipate, subject to market conditions, that we will spend approximately $7 million repurchasing stock during the remainder of 2001. 10 11 CAUTIONARY STATEMENT ABOUT FORWARD LOOKING STATEMENTS This annual report includes certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of 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: o the completion of pending and future acquisitions o operating cash flows and availability of capital o future stock repurchases o capital expenditures 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: o the future economic environment, including consumer confidence, may affect the demand for new and used vehicles and parts and service sales o regulatory environment, adverse legislation, or unexpected litigation o 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 o requirements imposed on us by our manufacturers may affect our acquisitions and capital expenditures related to our dealership facilities o our dealership operations may not perform at expected levels or achieve expected improvements o we may not achieve expected future cost savings and our future costs could be higher than we expected o 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 o available capital resources may limit our ability to complete acquisitions o available capital resources may limit our ability to complete construction of new or expanded facilities This information and additional factors that could affect our operating results and performance are described in our filings with the SEC. We urge you to carefully consider those factors. All forward-looking statements attributable to us are qualified in their entirety by this cautionary statement. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The following information about our market sensitive financial instruments updates the information provided as of December 31, 2000, in our Annual Report on Form 10-K and constitutes a "forward-looking statement". Our major market risk exposure is changing interest rates. Our policy is to manage interest rates through use of a combination of fixed and floating rate debt. Interest rate swaps may be used to adjust interest rate exposures when appropriate, based upon market conditions. These swaps are entered into with financial institutions with investment grade credit ratings, thereby minimizing the risk of credit loss. All items described are non-trading. Since December 31, 2000, our floorplan notes payable have decreased, primarily due to decreases in inventory levels. As of March 31, 2001, there was $55 million outstanding under the acquisition portion of the credit facility, a $20 million increase since December 31, 2000. Additionally, as at year-end, we have no interest rate swap positions outstanding. 11 12 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS From time to time, our dealerships are named in claims involving the manufacture of automobiles, contractual disputes and other matters arising in the ordinary course of business. Currently, no legal proceedings are pending against or involve us that, in our opinion, based on current known facts and circumstances, could reasonably be expected to have a material adverse effect on our financial position. ITEM 2. CHANGES IN SECURITIES None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K A. EXHIBITS: 11.1 Statement re: computation of earnings per share is included under Note 3 to the financial statements. 27.1 Financial Data Schedule. B. REPORTS ON FORM 8-K: None. 12 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Group 1 Automotive, Inc. May 15, 2001 By: /s/ Scott L. Thompson --------------- ----------------------------------------- Date Scott L. Thompson, Senior Vice President, Chief Financial Officer and Treasurer 13