EX-99.1 3 h00614exv99w1.txt PRESS RELEASE - REPORTING FINANCIAL RESULTS EXHIBIT 99.1 NEWS RELEASE GROUP 1 AUTOMOTIVE INC 950 Echo Lane, Suite 100 Houston, TX 77024 ------------------------------------------------------------------------------------------------------- AT GROUP 1: Chairman, President and CEO B.B. Hollingsworth, Jr. (713) 647-5700 EVP, CFO and Treasurer Scott L. Thompson (713) 647-5700 Manager, Investor Relations Kim Paper (713) 647-5700 AT Thomson Financial/Carson: Investor Relations Jeffrey T. O'Keefe (212) 701-1948 Media Relations Alecia Pulman (212) 510-9347 -------------------------------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE THURSDAY, OCTOBER 24, 2002 RECORD RESULTS FOR QUARTER AND FIRST NINE MONTHS OF 2002 GROUP 1 POSTS 27 PERCENT INCREASE IN NET INCOME FOR THIRD QUARTER 20TH CONSECUTIVE QUARTER OF DOUBLE-DIGIT EPS GROWTH; 2002 EARNINGS GUIDANCE CONFIRMED WITH TIGHTENED RANGE; 2003 GUIDANCE INITIATED AT $3.25 TO $3.35 PER SHARE HOUSTON, OCTOBER 24, 2002--GROUP 1 AUTOMOTIVE, INC. (NYSE: GPI), a Fortune 500 specialty retailer, today reported a 26.7 percent increase in net income for the third quarter ended September 30, 2002. Net income was up 39.4 percent for the first nine months of 2002. "The successful integration of our new California operations and a 4.1 percent increase in same store revenues drove our performance this quarter," said B.B. Hollingsworth Jr., Group 1's chairman, president and chief executive officer. This quarter's performance marks the Company's 20th consecutive period of double-digit quarterly earnings per share growth on a year-over-year basis. HIGHLIGHTS: o THIRD-QUARTER NET INCOME UP 26.7 PERCENT TO $20.1 MILLION o THIRD-QUARTER DILUTED EPS INCREASED 12.0 PERCENT TO $0.84 o NINE-MONTH NET INCOME INCREASED 39.4 PERCENT TO $54.8 MILLION o NINE-MONTH DILUTED EPS UP 18.9 PERCENT TO $2.26 --------------------------------------------------------------------------------
SUMMARY RESULTS OF OPERATIONS (UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------- ---------------------- 2002 2001 2002 2001 --------- --------- --------- --------- REVENUES $ 1,202.6 $ 1,021.0 $ 3,181.8 $ 2,956.5 GROSS PROFIT $ 180.5 $ 158.5 $ 492.8 $ 454.2 INCOME FROM OPERATIONS $ 40.1 $ 34.8 $ 109.1 $ 97.5 NET INCOME $ 20.1 $ 15.9 $ 54.8 $ 39.3 DILUTED EARNINGS PER SHARE $ 0.84 $ 0.75 $ 2.26 $ 1.90 --------------------------------------------------------------------------------
-more- GROUP 1 AUTOMOTIVE, INC Add-1- RECORD RESULTS FOR THE THIRD QUARTER For the third quarter ended September 30, 2002, revenues grew 17.8 percent to over $1.2 billion from $1.0 billion for the same period last year. New vehicle revenues grew 21.7 percent, on a unit sales increase of 19.9 percent. Used vehicle revenues also expanded 9.6 percent, with unit sales 5.4 percent higher. Parts and service and finance and insurance revenues grew 13.9 percent and 25.9 percent, respectively. Net income increased 26.7 percent to $20.1 million from $15.9 million, while diluted earnings per share grew 12.0 percent to $0.84 from $0.75 a year ago. Average shares outstanding increased 13.0 percent to 24.0 million primarily due to the Company's equity offering in the fourth quarter of 2001. Gross margin for the quarter decreased to 15.0 percent compared with 15.5 percent during the year-ago period as vehicle gross margins contracted. Income from operations rose to $40.1 million from $34.8 million, a 15.3 percent increase. Operating margin was 3.3 percent compared with 3.4 percent during the year-ago period. Floorplan interest expense declined to 0.4 percent of revenues from 0.6 percent of revenues for the same period last year, as interest rates fell. Hollingsworth stated, "We continue to demonstrate our strength as a specialty retailer and the importance of having diverse revenue streams." Hollingsworth further noted that from a brand standpoint Lexus and Chevrolet were among the strongest performers. SOLID PERFORMANCE FOR NINE MONTHS For the first nine months of 2002, revenues reached $3.2 billion, a 7.6 percent increase from $3.0 billion for the same period last year. New vehicle revenues grew 9.5 percent on a 7.9 percent increase in unit sales. Used vehicle revenues increased 1.8 percent on a unit sales decline of 0.4 percent. Parts and service and finance and insurance revenues grew 10.0 percent and 17.5 percent, respectively. Diluted earnings per share increased 18.9 percent to $2.26 on net income of $54.8 million, compared with $1.90 per diluted share on net income of $39.3 million, for the first nine months of 2001. Year-to-date gross margin for 2002 increased to 15.5 percent compared with 15.4 percent in the 2001 period. Income from operations rose 11.8 percent to $109.1 million from $97.5 million, and operating margin expanded to 3.4 percent compared with 3.3 percent last year. Year-to-date, the Company has repurchased 635,000 shares of its common stock at an average price of $24.96 and acquired 17 franchises with $780 million of annualized revenues, while it disposed of two underperforming dealerships with $48 million of annualized revenues, as part of its previously stated acquisition strategy for 2002. MANAGEMENT'S OUTLOOK "We are confident about our future prospects. Favorable interest rates combined with manufacturers' incentives and rebates, and more innovative products with shorter cycles, as well as the affordability of vehicles continue to attract customers to our dealerships. Furthermore, record new vehicle sales levels the last few years have resulted in more automobiles and light trucks in operation, a trend that will be driving business to our higher-margin parts and service departments. Although we expect a slightly less robust new vehicle market, we see these positive business trends continuing, and are therefore confirming and narrowing the range of our diluted earnings per share guidance for FY2002 to $2.85 to $2.90," commented Hollingsworth. Additionally, the Company expects diluted earnings per share of $3.25 to $3.35 for FY2003. Earnings growth is expected to emanate from a combination of dealership performance and acquisitions, as well as common stock repurchases as warranted. -more- GROUP 1 AUTOMOTIVE INC Add-2- THIRD-QUARTER CONFERENCE CALL Group 1 will hold a conference call to discuss third quarter results at 10:00 a.m. EDT on Thursday, October 24, 2002. The call can be accessed live and will be available for replay over the Internet via www.vcall.com, or through Group 1's website, www.group1auto.com. ABOUT GROUP 1 AUTOMOTIVE, INC. Group 1 owns 73 automotive dealerships comprised of 110 franchises, 29 different brands, and 24 collision service centers located in California, Colorado, Florida, Georgia, Louisiana, Massachusetts, New Mexico, Oklahoma and Texas. Through its dealerships and Internet sites, the Company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts. GROUP 1 AUTOMOTIVE CAN BE REACHED ON THE INTERNET AT WWW.GROUP1AUTO.COM This press release contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements include statements regarding our plans, goals, beliefs or current expectations, including those plans, goals, beliefs and expectations of our officers and directors with respect to, among other things: o earnings per share for the years ending 2002 and 2003 o the completion of future acquisitions o the repurchase of the Company's common stock o business trends, including incentives, new vehicle sales, product cycles and interest rates 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, interest rates, and manufacturer incentives, 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, Toyota and GM, may not continue to produce or make available to us vehicles that are in high demand by our customers o requirements imposed on us by automobile 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 our cost of financing could increase significantly o new accounting standards could materially impact our reported earnings per share o pending acquisitions may not be completed due to failure to satisfy closing conditions o we may not reach agreement with additional acquisition candidates This information and additional factors that could affect our operating results and performance are described in our Form 10-K for the year ended December 31, 2001. All forward-looking statements attributable to us are qualified in their entirety by this cautionary statement. FINANCIAL TABLES TO FOLLOW -more- GROUP 1 AUTOMOTIVE INC Add-3- GROUP 1 AUTOMOTIVE, INC. STATEMENTS OF OPERATIONS (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------ ----------------------------- 2002 2001 2002 2001 ------------- ------------- ------------- ------------- REVENUES: New vehicles $736,429 $604,912 $1,900,456 $1,735,251 Used vehicles 311,847 284,517 864,046 848,877 Parts & service 108,295 95,048 295,497 268,729 Finance & insurance, net 46,017 36,553 121,767 103,608 ------------- ------------- ------------- ------------- Total revenues 1,202,588 1,021,030 3,181,766 2,956,465 COST OF SALES: New vehicles, net of floorplan assistance 686,312 558,581 1,764,269 1,603,744 Used vehicles 287,917 261,478 794,255 778,658 Parts & service 47,851 42,499 130,462 119,842 ------------- ------------- ------------- ------------- Total cost of sales 1,022,080 862,558 2,688,986 2,502,244 Gross Profit 180,508 158,472 492,780 454,221 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 137,137 119,381 374,787 343,879 ------------- ------------- ------------- ------------- Income from operations before non-cash charges 43,371 39,091 117,993 110,342 DEPRECIATION AND AMORTIZATION EXPENSE 3,299 4,324 8,920 12,808 ------------- ------------- ------------- ------------- Income from operations 40,072 34,767 109,073 97,534 OTHER INCOME (EXPENSE): Floorplan interest expense (5,082) (6,028) (13,814) (23,165) Other interest expense, net (2,424) (3,132) (7,615) (11,054) Other income (expense), net (80) 28 (190) 48 ------------- ------------- ------------- ------------- INCOME BEFORE INCOME TAXES 32,486 25,635 87,454 63,363 PROVISION FOR INCOME TAXES 12,345 9,741 32,683 24,078 ------------- ------------- ------------- ------------- NET INCOME $20,141 $15,894 $54,771 $39,285 ============= ============= ============= ============= Basic earnings per share $0.88 $0.81 $2.38 $2.01 Diluted earnings per share $0.84 $0.75 $2.26 $1.90 Weighted average shares outstanding: Basic 23,018,226 19,522,456 23,013,492 19,563,941 Diluted 24,026,015 21,258,841 24,222,717 20,666,414 OTHER DATA: Gross margin 15.0% 15.5% 15.5% 15.4% Operating margin 3.3% 3.4% 3.4% 3.3% Pretax income margin 2.7% 2.5% 2.7% 2.1% Same store revenues change 4.1% 3.1% 1.0% 3.8% EBITDA $43,291 $39,119 $117,803 $110,390 Manufacturer floorplan assistance $7,736 $7,134 $20,382 $21,675 Retail new vehicles sold 27,994 23,354 72,249 66,963 Retail used vehicles sold 18,194 17,256 50,574 50,784 ------------- ------------- ------------- ------------- Total retail sales 46,188 40,610 122,823 117,747 ============= ============= ============= =============
-more- GROUP 1 AUTOMOTIVE INC Add-4- GROUP 1 AUTOMOTIVE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)
SEPTEMBER 30, DECEMBER 31, 2002 2001 ------------- ------------ (unaudited) (audited) ASSETS: Current assets: Cash $22,142 $16,861 Contracts-in-transit and vehicle receivables 156,551 130,351 Inventories 536,336 454,961 Other assets 74,265 59,759 ------------- ------------ Total current assets 789,294 661,932 ------------- ------------ Property, plant and equipment 96,279 83,011 Intangible assets 374,362 282,527 Investments and deferred costs from insurance and vehicle service contract sales 32,114 21,187 Other assets 13,376 5,768 ------------- ------------ Total assets $1,305,425 $1,054,425 ============= ============ LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Floorplan notes payable $521,693 $364,954 Other interest-bearing liabilities 1,354 1,687 Accounts payable and accrued expenses 161,182 140,578 ------------- ------------ Total current liabilities 684,229 507,219 ------------- ------------ Debt 87,443 95,499 Other liabilities 44,454 30,758 ------------- ------------ Total liabilities before deferred revenues 816,126 633,476 ------------- ------------ Deferred revenues 46,901 28,706 Stockholders' equity 442,398 392,243 ------------- ------------ Total liabilities and stockholders' equity $1,305,425 $1,054,425 ============= ============ OTHER DATA: Working capital $105,065 $154,713 Current ratio 1.15 1.31 Long-term debt to capitalization 17% 20% Last 12 months return on average equity 18% 19%
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