-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Up+6J+xHC9FwxGO2delu7+yVaiAQFQhsmZr90w8uwCvp4YUIvyVDSXDylAQhU3FR GDx8APXRDEO0ZtqoIpdzbQ== 0000950129-04-002505.txt : 20040429 0000950129-04-002505.hdr.sgml : 20040429 20040429094713 ACCESSION NUMBER: 0000950129-04-002505 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040429 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GROUP 1 AUTOMOTIVE INC CENTRAL INDEX KEY: 0001031203 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO DEALERS & GASOLINE STATIONS [5500] IRS NUMBER: 760506313 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13461 FILM NUMBER: 04762655 BUSINESS ADDRESS: STREET 1: 950 ECHO LANE STREET 2: STE 100 CITY: HOUSTON STATE: TX ZIP: 77024 BUSINESS PHONE: 7134676268 MAIL ADDRESS: STREET 1: 950 ECHO LANE STREET 2: STE 100 CITY: HOUSTON STATE: TX ZIP: 77024 8-K 1 h14859e8vk.txt GROUP 1 AUTOMOTIVE, INC. - APRIL 29, 2004 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 29, 2004 GROUP 1 AUTOMOTIVE, INC. (Exact name of Registrant as specified in its charter) Delaware 1-13461 76-0506313 (State or other jurisdiction of (Commission File Number) (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) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99.1 Press Release of Group 1 Automotive, Inc. dated as of April 29, 2004 reporting on financial results. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On April 29, 2004, Group 1 Automotive, Inc., a Delaware corporation (the "Company"), announced its financial results for the first quarter ended March 31, 2004. On April 29, 2004, the Company issued a press release relating to such financial results. The press release is filed as Exhibit 99.1 to this report. As provided in General Instructions B.6 of Form 8-K, the information in this Current Report shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. 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. April 29, 2004 By: /s/ B.B. Hollingsworth, Jr. - ------------------------------------ ------------------------------------- Date B.B. Hollingsworth, Chairman of the Board, President and Chief Executive Officer INDEX TO EXHIBITS Exhibit No. Description - ----------- ----------- 99.1 Press Release of Group 1 Automotive, Inc. dated as of April 29, 2004 reporting on financial results. EX-99.1 2 h14859exv99w1.txt PRESS RELEASE . . . 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 Manager, Investor Kim Paper Canning (713) 647-5700 Relations AT Fleishman-Hillard: Investors/Media Russell A. Johnson (713) 513-9515 - --------------------------------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE THURSDAY, APRIL 29, 2004 GROUP 1 AUTOMOTIVE REPORTS FIRST-QUARTER EARNINGS COMPANY REAFFIRMS 2004 GUIDANCE; NEW FRANCHISE ACQUIRED HOUSTON, APRIL 29, 2004--GROUP 1 AUTOMOTIVE, INC. (NYSE: GPI), a Fortune 500 specialty retailer, today reported first-quarter net income of $10.5 million, or $0.45 per diluted share. This includes an after-tax charge of $4.0 million, or $0.17 per diluted share, resulting from the previously announced redemption of the company's 10 7/8% senior subordinated notes in March 2004. Revenues for the quarter were $1.1 billion. FIRST-QUARTER HIGHLIGHTS: o NEW VEHICLE REVENUES INCREASED 13.8 PERCENT o PARTS & SERVICE REVENUES GREW 11.6 PERCENT o GROSS PROFIT INCREASED TO $183.4 MILLION FROM $169.4 MILLION o SAME STORE REVENUES INCREASED 5.7 PERCENT
- ------------------------------------------------------------------------ SUMMARY RESULTS OF OPERATIONS (UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) THREE MONTHS ENDED MARCH 31, ----------------------------------------- 2004 2003 ------------------- ------------------- REVENUES $ 1,147.0 $ 1,029.8 GROSS PROFIT $ 183.4 $ 169.4 INCOME FROM OPERATIONS $ 32.7 $ 31.4 NET INCOME $ 10.5 $ 14.8 DILUTED EARNINGS PER SHARE $ 0.45 $ 0.64 - ------------------------------------------------------------------------
RESULTS FOR THE FIRST QUARTER During the first quarter, revenues grew 11.4 percent to $1.1 billion from $1.0 billion during the same period last year. Same store revenues increased 5.7 percent, compared with a 7.8 percent decrease in the first quarter of 2003. -more- GROUP 1 AUTOMOTIVE, INC. Add-1- "We delivered a second consecutive quarter of same store growth reflecting our continued focus on improving operations and the benefits of an improving used vehicle market," said B.B. Hollingsworth Jr., Group 1's chairman, president and chief executive officer. Hollingsworth noted that from a brand standpoint Acura, Lexus, Infiniti and Nissan were among the strongest performers. "We had outstanding performances from our New Mexico and Central Texas platforms, and continued weak performance in Atlanta," he added. New vehicle revenues grew 13.8 percent on a unit sales increase of 10.2 percent. Used vehicle retail revenues increased 2.4 percent on unit sales that were 0.8 percent lower. Parts and service and finance and insurance revenues grew 11.6 percent and 3.8 percent, respectively. Gross margin for the quarter was 16.0 percent compared with 16.5 percent during the year-ago period, primarily due to new vehicle sales growing more rapidly than higher-margin parts and service and finance and insurance businesses. Income from operations was $32.7 million versus $31.4 million, a 4.2 percent increase. Operating margin was 2.8 percent compared with 3.0 percent during the year-ago period. The company incurred an after-tax charge of $4.0 million, or $0.17 per diluted share, in association with the previously announced redemption of all of its 10 7/8% senior subordinated notes on March 1, 2004. Net income decreased to $10.5 million from $14.8 million, and diluted average shares outstanding increased 1.6 percent to 23.4 million shares. Diluted earnings per share were $0.45, including the $0.17 negative impact from the notes redemption, compared with $0.64 a year ago. ACQUISITION UPDATE In March 2004, the company completed the acquisition of a new Toyota franchise in Boston. This franchise became the third Toyota dealership for the Ira Motor Group and is expected to generate annual revenues of $55 million. The dealership will sell Scion vehicles in addition to Toyota. MANAGEMENT'S OUTLOOK Group 1 anticipates growth in the new vehicle, used vehicle, and parts and service markets during the second quarter, as there appear to be signs of a recovery in the used vehicle market, as well as an increase in manufacturers' incentives driving new vehicle sales. The company reaffirmed its FY2004 earnings guidance of $3.20 to $3.40 per diluted share excluding future acquisitions and the $0.17 per diluted share impact of the March 2004 notes redemption. This equates to $3.03 to $3.23 per diluted share excluding future acquisitions and including the redemption impact. The company continues to seek strategic tuck-in acquisitions to augment its current markets, as well as platform acquisitions to enter new markets. Including the $315 million revenues acquired during the first quarter, the company is targeting to add dealerships with aggregate annual revenues of approximately $1 billion in 2004. Hollingsworth stated, "Our acquisition pipeline continues to contain attractive, qualified candidates that fit our stringent criteria." FIRST-QUARTER CONFERENCE CALL Group 1 will hold a conference call to discuss the first-quarter results at 10 a.m. EDT on Thursday, April 29, 2004. The call can be accessed live and will be available for replay over the Internet at www.vcall.com, or through Group 1's Web site, www.group1auto.com, for 30 days. In addition, an updated slide presentation will be available on Group 1's Web site. -more- GROUP 1 AUTOMOTIVE, INC. Add-2- ABOUT GROUP 1 AUTOMOTIVE, INC. Group 1 currently owns 83 automotive dealerships comprised of 123 franchises, 30 brands, and 30 collision service centers located in California, Colorado, Florida, Georgia, Louisiana, Massachusetts, New Jersey, 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 year ending 2004 o the completion of future acquisitions o operating cash flows and availability of capital o changes in sales volumes in the new and used retail vehicle and parts and service markets o business trends, including incentives, new vehicle sales, product cycles and interest rates o addition of new brands o dealership operating performance o revenues of acquired dealerships 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, the level of manufacturer incentives and the availability of consumer credit may affect the demand for new and used vehicles and parts and service sales o the effect of adverse international developments such as war, terrorism, political conflicts or other hostilities o regulatory environment, adverse legislation, or unexpected litigation o our principal automobile manufacturers, especially Toyota/Lexus, Ford, DaimlerChrysler, General Motors and Nissan/Infiniti, 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 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 complete acquisitions, complete construction of new or expanded facilities or repurchase shares o our cost of financing could increase significantly o new accounting standards could materially impact our reported earnings per share o we may not complete additional acquisitions or the pace of acquisitions may change o we may not be able to adjust our cost structure o we may lose key personnel o competition in our industry may impact our operations or our ability to complete acquisitions -more- GROUP 1 AUTOMOTIVE, INC. Add-3- o we may not achieve expected sales volumes from the franchises granted to us o insurance costs could increase significantly o we may not obtain inventory of new and used vehicles and parts, including imported inventory, at the cost or in the volume we expect This information and additional factors that could affect our operating results and performance are described in our Form 10-K, set forth under the headings "Business-Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." We urge you to carefully consider those factors. 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-4- GROUP 1 AUTOMOTIVE, INC. STATEMENTS OF OPERATIONS (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED MARCH 31, -------------------- 2004 2003 --------- -------- REVENUES: New vehicle retail sales $675,977 $593,754 Used vehicle retail sales 230,655 225,198 Used vehicle wholesale sales 76,191 61,004 Parts & service sales 124,020 111,113 Retail finance fees 15,562 15,179 Vehicle service contract fees 15,546 15,198 Other F&I revenues, net 9,076 8,345 --------- -------- Total revenues 1,147,027 1,029,791 COST OF SALES: New vehicle retail sales 628,084 551,029 Used vehicle retail sales 202,085 197,058 Used vehicle wholesale sales 77,171 62,799 Parts & service sales 56,259 49,457 --------- -------- Total cost of sales 963,599 860,343 Gross Profit 183,428 169,448 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 146,664 134,838 DEPRECIATION AND AMORTIZATION EXPENSE 4,088 3,250 --------- -------- Income from operations 32,676 31,360 OTHER INCOME (EXPENSE): Floorplan interest expense (4,639) (5,447) Other interest expense, net (4,840) (2,369) Loss on redemption of senior subordinated notes (6,381) - Other expense, net (24) (26) --------- -------- INCOME BEFORE INCOME TAXES 16,792 23,518 PROVISION FOR INCOME TAXES 6,305 8,702 --------- -------- NET INCOME $10,487 $14,816 ========= ======== Basic earnings per share $0.47 $0.66 Diluted earnings per share $0.45 $0.64 Weighted average shares outstanding: Basic 22,523,499 22,363,602 Diluted 23,389,805 23,010,648 OTHER DATA: Gross margin 16.0% 16.5% Operating margin 2.8% 3.0% Pretax income margin 1.5% 2.3% Same store revenues 5.7% (7.8)% Manufacturer floorplan assistance $6,699 $5,850 Retail new vehicles sold 24,432 22,177 Retail used vehicles sold 16,186 16,312 --------- -------- Total retail sales 40,618 38,489 --------- -------- Wholesale used vehicles sold 10,790 10,097
-more- GROUP 1 AUTOMOTIVE, INC. Add-5- GROUP 1 AUTOMOTIVE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)
MARCH 31, DECEMBER 31, 2004 2003 --------------- -------------- (unaudited) (audited) ASSETS: Current assets: Cash $32,315 $25,441 Contracts-in-transit and vehicle receivables 140,406 143,260 Inventories 766,937 671,279 Other assets 89,290 90,943 --------------- -------------- Total current assets 1,028,948 930,923 --------------- -------------- Property and equipment 144,163 131,647 Intangible assets 433,521 390,867 Investments and deferred costs from insurance and vehicle 28,263 service contract sales 27,214 Other assets 6,142 6,465 --------------- -------------- Total assets $1,639,988 $1,488,165 =============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Floorplan notes payable $709,977 $493,568 Other interest-bearing liabilities 895 910 Accounts payable and accrued expenses 162,269 159,915 --------------- -------------- Total current liabilities 873,141 654,393 --------------- -------------- Debt 156,951 230,178 Other liabilities 45,442 44,730 --------------- -------------- Total liabilities before deferred revenues 1,075,534 929,301 --------------- -------------- Deferred revenues 37,852 40,755 Stockholders' equity 526,602 518,109 --------------- -------------- Total liabilities and stockholders' equity $1,639,988 $1,488,165 =============== ============== OTHER DATA: Working capital $155,807 $276,530 Current ratio 1.18 1.42 Long-term debt to capitalization 23% 31% Last 12 months return on average equity 14% 16%
-more- GROUP 1 AUTOMOTIVE, INC. Add-6- GROUP 1 AUTOMOTIVE, INC. FIRST-QUARTER ADDITIONAL INFORMATION (UNAUDITED)
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX 1Q 2004 1Q 2003 - ------------------------------------------ ----------- ----------- Oklahoma 12.7% 13.0% Houston 12.5 13.2 New England 12.5 12.3 California 12.1 12.2 Central Texas 7.7 7.7 New Orleans 7.2 6.5 West Texas 7.2 7.4 Florida 6.7 8.2 Dallas 6.1 5.9 Atlanta 5.7 6.0 Beaumont 3.0 3.3 New Mexico 3.0 3.1 New Jersey 2.4 - Denver 1.2 1.2 --- --- Total 100.0% 100.0% NEW VEHICLE UNIT SALES BRAND MIX 1Q 2004 1Q 2003 - ------------------------------------------ ----------- ----------- Toyota/Lexus 26.9% 25.3% Ford 22.7 26.5 DaimlerChrysler 13.2 11.6 Nissan/Infiniti 11.6 9.9 GM 10.6 9.6 Honda/Acura 10.3 10.8 Other 4.7 6.3 --- --- Total 100.0% 100.0% % from Luxury Brands 12.1% 11.2% Car/Truck Mix 41.7%/58.3% 43.0%/57.0% Domestic / Imports Mix 44.6%/55.4% 46.2%/53.8% INDIVIDUAL PRODUCT DATA 1Q 2004 1Q 2003 - ------------------------------------------ ----------- ----------- New vehicle retail gross margin 7.1% 7.2% New vehicle gross profit per retail unit $1,960 $1,927 Retail used vehicle gross margin 12.0% 11.7% Used vehicle gross profit per retail unit $1,705 $1,615 Parts & service gross margin 54.6% 55.5% Finance & insurance revenues, net per retail unit $989 $1,006 SAME STORE REVENUES 1Q 2004 1Q 2003 - ------------------------------------------ ----------- ----------- New vehicle retail sales 7.3% (10.3)% Used vehicle retail sales (2.0)% (8.9)% Used vehicle wholesale sales 19.9% 3.0% Parts & service sales 6.9% 3.5% Finance & insurance revenues, net (1.6)% (5.9)% Total revenues 5.7% (7.8)%
-30- -----END PRIVACY-ENHANCED MESSAGE-----