Penske Automotive Reports Third Quarter 2019 Results
BLOOMFIELD HILLS, Mich., Oct. 29, 2019 /PRNewswire/ -- Penske Automotive Group, Inc. (NYSE: PAG), a diversified international transportation services company, today announced third quarter and nine months 2019 results. For the three months ended September 30, 2019, the company reported income from continuing operations attributable to common shareholders of $116.1 million, or $1.42 per share, compared to $130.1 million, or $1.53 per share in the prior year. 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, related to the final reconciliation of the income tax benefit of the 2017 U.S. Tax Cuts and Jobs Act. Excluding this benefit, adjusted income from continuing operations was $118.5 million, and related earnings per share was $1.40 in the third quarter last year.
The shift in mix of the Company's earnings to be more heavily weighted towards the U.S. increased the effective tax rate to 26.8% in the three months ended September 30, 2019 compared to 17.3% in the same period last year. Excluding the $11.6 million tax benefit noted above, the Company's prior period comparable adjusted effective tax rate was 24.6%. Additionally, foreign exchange rates negatively impacted earnings per share attributable to common shareholders by $0.01. Weak market conditions in the U.K., largely as the result of Brexit, impacted third quarter 2019 results as the over-supply of vehicles in the market impacted new and used vehicle gross profit and margins. As a result, the company estimates its third quarter results were negatively impacted by approximately $0.26 per share.
"Our business produced another quarter of record revenue," said Penske Automotive Group Chair and CEO Roger Penske. "I am particularly pleased with the 30-basis points improvement in selling, general and administrative expense as a percentage of gross profit we achieved during the quarter, coupled with the strength in the performance of our U.S. retail automotive businesses, including finance and insurance gross profit, and the North American commercial truck dealership business. Despite the challenges from the U.K., I am very pleased with the performance of our business in the third quarter which demonstrates the positive impact from the Warner Truck Group acquisition and share repurchases."
For the nine months ended September 30, 2019, the company reported income from continuing operations attributable to common shareholders of $333.9 million, or $4.02 per share, compared to $372.7 million, or $4.37 per share in the prior year. Foreign exchange rates negatively impacted earnings per share attributable to common shareholders by $0.08. Excluding the tax benefit of $11.6 million noted above, adjusted income from continuing operations was $361.1 million and related adjusted earnings per share were $4.23 for the nine months ended September 30, 2018.
Third Quarter Operating Highlights
Reported
Excluding F/X
Revenue +5.5% +7.7%
Gross Profit +2.0% +4.1%
Earnings Before Taxes +0.8% +1.9%
Retail Automotive Same-Store Retail Revenue +0.5% +2.9%
New Vehicle Revenue -0.2% +1.8%
Used Vehicle Revenue
Flat +3.0%
Finance & Insurance Revenue +5.0% +7.6%
Service & Parts Revenue +4.3% +6.2%
Total Retail Automotive Gross Profit Per Unit of $3,199, -$189/unit; excluding F/X -$116/unit
-- U.S. $3,581, +$ 147/unit
-- International $2,773, -$562/unit; excluding F/X -$407/unit
Used Vehicle Supercenter Operations
For the three months ended September 30, 2019, our used vehicle supercenters increased units retailed by 6.2% to 19,728 and generated $327.6 million in revenue. Total gross profit per unit retailed declined 14.0%, or $286, representing an increase of 4.2%, or $120 per unit in the U.S., offset by a decline of 21.1%, or $388 per unit in the U.K. The decline in used vehicle gross profit in the U.K was largely associated with an oversupply of vehicles in the market and a decline in used vehicle market values. For the nine months ended September 30, 2019, the used vehicle supercenters retailed 55,543 used units representing a decline of 0.9% and generated $954.0 million in revenue. Additionally, in the third quarter of 2019, we opened a new CarSense used vehicle supercenter in Glen Mills, Pennsylvania, increasing our used vehicle supercenter location total to fifteen (15).
Retail Commercial Truck Operations
During the third quarter of 2019, the company became the largest dealership group for Freightliner in North America with the acquisition of Warner Truck Centers, representing six dealership locations in Utah and Idaho, bringing our total commercial vehicle dealership count to twenty-five (25). For the three months ended September 30, 2019, total medium and heavy-duty units retailed increased 57.2%, and revenue increased 79.7% to $692.3 million. For the nine months ended September 30, 2019, total medium and heavy-duty truck units retailed increased 32.8% and revenue increased 42.8% to $1.5 billion. Same-store revenue increased 4.0% and 14.1% for the three and nine months ended September 30, 2019, respectively.
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. Effective September 1, 2019, Penske Transportation Solutions (PTS) has become the new universal brand name for PTL's various business lines, Penske Truck Leasing, Logistics, Vehicle Services, and Epes Transport Systems. The company accounts for its ownership interest in PTL using the equity method of accounting. For the three and nine months ended September 30, 2019, the company recorded $42.2 million and $106.0 million in earnings from this investment compared to $40.7 million and $91.7 million for the same periods last year, respectively.
Dividend and Share Repurchases
On October 16, 2019, the company announced that its Board of Directors increased the dividend to its common stock shareholders to $0.41 per share, the 34(th) consecutive increase in the quarterly dividend.
During the three months ended September 30, 2019, the company repurchased 1,021,622 shares for $43.6 million, or an average of $42.66 per share. For the nine months ended September 30, 2019, the company repurchased 3,986,836 shares for $174.1 million, or an average of $43.68 per share. In September 2019, our Board of Directors increased the authority delegated to management to repurchase our outstanding securities to $200.0 million.
Conference Call
Penske Automotive Group will host a conference call discussing financial results relating to the third quarter of 2019 on Tuesday, October 29, 2019, at 2:00 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial (800) 230?1074 - [International, please dial (612) 234?9959]. 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 2019 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 27,000 people worldwide and is a member of the Fortune 500, Russell 1000, and Russell 3000 indexes, 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 product availability, 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, changes in interest rates and foreign currency exchange rates, changes in tariff rates, adverse impacts related to the outcome of the United Kingdom's potential departure from the European Union, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to limited vehicle availability due to WLTP and RDE, natural disasters, 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, 2018, 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.
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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
jcarlson@penskeautomotive.com
tpordon@penskeautomotive.com
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,
2019 2018 Change 2019 2018 Change
Revenue $
5,967.6 $
5,658.6 5.5 $
17,287.8 $
17,345.8 (0.3)
%
%
Cost of Sales 5,097.9 4,806.0 6.1 14,698.8 14,739.0 (0.3)
%
%
Gross Profit $
869.7 $
852.6 2.0 $
2,589.0 $
2,606.8 (0.7)
%
%
SG&A Expenses 672.8 662.8 1.5 2,008.1 2,001.3 0.3
% %
Depreciation 27.5 25.9 6.2 81.0 77.2 4.9
% %
Operating Income $
169.4 $
163.9 3.4 $
499.9 $
528.3 (5.4)
%
%
Floor Plan Interest Expense (21.4) (20.2) 5.9 (64.2) (59.0) 8.8
% %
Other Interest Expense (32.9) (28.3) 16.3 (93.2) (86.7) 7.5
% %
Equity in Earnings of Affiliates 43.3 41.7 3.8 109.6 95.0 15.4
% %
Income from Continuing Operations Before Income Taxes $
158.4 $
157.1 0.8 $
452.1 $
477.6 (5.3)
%
%
Income Taxes (42.4) (27.1) 56.5 (118.6) (104.7) 13.3
% %
Income from Continuing Operations $
116.0 $
130.0 (10.8) $
333.5 $
372.9 (10.6)
% %
Income from Discontinued Operations, net of tax 0.1 0.1
nm 0.3 0.2
nm
Net Income $
116.1 $
130.1 (10.8) $
333.8 $
373.1 (10.5)
% %
Less: Income (Loss) Attributable to Non-Controlling Interests (0.1) (0.1)
nm (0.4) 0.2
nm
Net Income Attributable to Common Shareholders $
116.2 $
130.2 (10.8) $
334.2 $
372.9 (10.4)
% %
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations $
116.0 $
130.0 (10.8) $
333.5 $
372.9 (10.6)
% %
Less: Income (Loss) Attributable to Non-Controlling Interests (0.1) (0.1)
nm (0.4) 0.2
nm
Income from Continuing Operations, net of tax $
116.1 $
130.1 (10.8) $
333.9 $
372.7 (10.4)
% %
Income from Discontinued Operations, net of tax 0.1 0.1
nm 0.3 0.2
nm
Net Income Attributable to Common Shareholders $
116.2 $
130.2 (10.8) $
334.2 $
372.9 (10.4)
% %
Income from Continuing Operations Per Share $
1.42 $
1.53 (7.2) $
4.02 $
4.37 (8.0)
% %
Income Per Share $
1.42 $
1.53 (7.2) $
4.03 $
4.37 (7.8)
% %
Weighted Average Shares Outstanding 81.7 84.9 (3.8) 83.0 85.3 (2.7)
% %
nm - not meaningful
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Millions)
(Unaudited)
September 30, December 31,
2019 2018
Assets:
Cash and Cash Equivalents $
77.5 $
39.4
Accounts Receivable, Net 967.3 929.1
Inventories 4,043.9 4,040.1
Other Current Assets 98.8 86.6
Total Current Assets 5,187.5 5,095.2
Property and Equipment, Net 2,309.3 2,250.0
Operating Lease Right-of-Use Assets 2,384.4
Intangibles 2,423.9 2,238.2
Other Long-Term Assets 1,384.4 1,321.1
Total Assets $
13,689.5 $
10,904.5
Liabilities and Equity:
Floor Plan Notes Payable $
2,444.1 $
2,362.2
Floor Plan Notes Payable - Non-Trade 1,410.6 1,428.6
Accounts Payable 672.3 598.2
Accrued Expenses and Other Current Liabilities 722.2 566.6
Current Portion Long-Term Debt 96.8 92.0
Liabilities Held for Sale 0.5 0.7
Total Current Liabilities 5,346.5 5,048.3
Long-Term Debt 2,282.5 2,124.7
Long-Term Operating Lease Liabilities 2,334.7
Other Long-Term Liabilities 1,066.7 1,096.8
Total Liabilities 11,030.4 8,269.8
Equity 2,659.1 2,634.7
Total Liabilities and Equity $
13,689.5 $
10,904.5
Supplemental Balance Sheet Information
New vehicle days' supply 64 72
Used vehicle days' supply 43 57
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Operations
Selected Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
Geographic Revenue Mix:
North America 61.8 57.9 58.3 55.4
% % % %
U.K. 31.2 34.4 33.7 36.0
% % % %
Other International 7.0 7.7 8.0 8.6
% % % %
Total 100.0 100.0 100.0 100.0
% % % %
Revenue: (Amounts in Millions)
Retail Automotive $
5,155.4 $
5,148.5 $
15,442.9 $
15,900.0
Retail Commercial Trucks 692.3 385.3 1,451.4 1,016.5
Commercial Vehicles Australia/Power Systems and Other 119.9 124.8 393.5 429.3
Total $
5,967.6 $
5,658.6 $
17,287.8 $
17,345.8
Gross Profit: (Amounts in Millions)
Retail Automotive $
747.5 $
762.2 $
2,283.9 $
2,338.5
Retail Commercial Trucks 86.6 57.8 199.5 156.8
Commercial Vehicles Australia/Power Systems and Other 35.6 32.6 105.6 111.5
Total $
869.7 $
852.6 $
2,589.0 $
2,606.8
Gross Margin:
Retail Automotive 14.5 14.8 14.8 14.7
% % % %
Retail Commercial Trucks 12.5 15.0 13.7 15.4
% % % %
Commercial Vehicles Australia/Power Systems and Other 29.7 26.1 26.8 26.0
% % % %
Total 14.6 15.1 15.0 15.0
% % % %
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
Operating Items as a Percentage of Revenue:
Gross Profit 14.6 15.1 15.0 15.0
% % % %
Selling, General and Administrative Expenses 11.3 11.7 11.6 11.5
% % % %
Operating Income 2.8 2.9 2.9 3.0
% % % %
Income from Continuing Operations Before Income Taxes 2.7 2.8 2.6 2.8
% % % %
Operating Items as a Percentage of Total Gross Profit:
Selling, General and Administrative Expenses 77.4 77.7 77.6 76.8
% % % %
Operating Income 19.5 19.2 19.3 20.3
% % % %
Three Months Ended Nine Months Ended
September 30, September 30,
(Amounts in Millions) 2019 2018
2019 2018
EBITDA* $
218.8 $
211.3 626.3 641.5
$
$
Floorplan Credits $
9.7 $
11.1 27.3 29.9
$
$
Rent Expense $
58.3 $
58.4 $
173.4 175.3
$
Capital Expenditures $
54.3 $
69.7 188.8 188.5
$
$
Stock Repurchases $
43.6
$ $
174.1 55.8
$
_____________________________
* 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,
2019 2018 2019 2018
Retail Automotive Revenue Mix:
Premium:
BMW / MINI 24 23 23 22
% % % %
Audi 11 12 12 13
% % % %
Mercedes-Benz 10 9 10 9
% % % %
Land Rover / Jaguar 8 9 9 9
% % % %
Porsche 6 5 6 6
% % % %
Ferrari / Maserati 2 3 3 3
% % % %
Lexus 3 3 3 3
% % % %
Acura 1 1 1 1
% % % %
Bentley 1 1 1 1
% % % %
Others 2 2 2 2
% % % %
Total Premium 68 68 70 69
% % % %
Volume Non-U.S.:
Toyota 11 11 10 10
% % % %
Honda 7 7 6 6
% % % %
Volkswagen 4 4 4 4
% % % %
Nissan 1 1 1 1
% % % %
Others 2 1 2 2
% % % %
Total Volume Non-U.S. 25 24 23 23
% % % %
U.S.:
General Motors / Chrysler / Ford 1 2 1 2
% % % %
Stand-Alone Used 6 6 6 6
% % % %
Total 100 100 100 100
% % % %
Retail Automotive Geographic Revenue Mix:
U.S. 58 56 56 54
% % % %
U.K. 36 38 38 39
% % % %
Other International 6 6 6 7
% % % %
Total 100 100 100 100
% % % %
Retail Automotive Geographic Gross Profit Mix:
U.S. 63 59 61 58
% % % %
U.K. 32 35 34 36
% % % %
Other International 5 6 5 6
% % % %
Total 100 100 100 100
% % % %
PENSKE AUTOMOTIVE GROUP, INC.
Retail Automotive Operations
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019 2018 Change 2019 2018 Change
Retail Automotive Units:
New Retail 57,214 58,933 (2.9) 166,730 179,266 (7.0)
% %
Used Retail 74,096 72,000 2.9 218,906 218,371 0.2
% %
Total 131,310 130,933 0.3 385,636 397,637 (3.0)
%
%
Retail Automotive Revenue: (Amounts in Millions)
New Vehicles $
2,332.3 $
2,350.2 (0.8) $
6,873.9 $
7,325.6 (6.2)
% %
Used Vehicles 1,824.5 1,825.2 (0.0) 5,529.2 5,588.9 (1.1)
% %
Finance and Insurance, Net 166.0 158.5 4.7 491.5 482.2 1.9
% %
Service and Parts 543.5 523.8 3.8 1,654.0 1,615.1 2.4
% %
Fleet and Wholesale 289.1 290.8 (0.6)
%
% 894.3 888.2 0.7
Total Revenue $
5,155.4 $
5,148.5 0.1 $
15,442.9 $
15,900.0 (2.9)
%
%
Retail Automotive Gross Profit: (Amounts in Millions)
New Vehicles $
164.3 $
179.8 (8.6) $
511.8 $
552.8 (7.4)
% %
Used Vehicles 89.7 105.3 (14.8) 284.2 327.5 (13.2)
% %
Finance and Insurance, Net 166.0 158.5 4.7 491.5 482.2 1.9
% %
Service and Parts 321.7 313.2 2.7 981.4 959.5 2.3
% %
Fleet and Wholesale 5.8 5.4 7.4 15.0 16.5 (9.1)
%
%
Total Gross Profit $
747.5 $
762.2 (1.9) $
2,283.9 $
2,338.5 (2.3)
% %
Retail Automotive Revenue Per Vehicle Retailed:
New Vehicles $
40,764 $
39,880 2.2 $
41,227 $
40,865 0.9
% %
Used Vehicles 24,623 25,350 (2.9) 25,258 25,593 (1.3)
% %
Retail Automotive Gross Profit Per Vehicle Retailed:
New Vehicles $
2,871 $
3,050 (5.9) $
3,069 $
3,084 (0.5)
% %
Used Vehicles 1,210 1,462 (17.2) 1,298 1,499 (13.4)
% %
Finance and Insurance 1,264 1,210 4.5 1,275 1,212 5.2
% %
Retail Automotive Gross Margin:
New Vehicles 7.0 7.7 -70 bps 7.4 7.5
% % % % -10 bps
Used Vehicles 4.9 5.8 -90 bps 5.1 5.9
% % % % -80 bps
Service and Parts 59.2 59.8 -60 bps 59.3 59.4
% % % % -10 bps
Fleet and Wholesale 2.0 1.9 +10 bps 1.7 1.9
% % % % -20 bps
Total Gross Margin 14.5 14.8 -30 bps 14.8 14.7
% % % % +10 bps
Retail Automotive Revenue Mix Percentages:
New Vehicles 45.2 45.6 -40 bps 44.5 46.1
% % % % -160 bps
Used Vehicles 35.4 35.5 -10 bps 35.8 35.2
% % % % +60 bps
Finance and Insurance, Net 3.2 3.1 +10 bps 3.2 3.0
% % % % +20 bps
Service and Parts 10.5 10.2 +30 bps 10.7 10.2
% % % % +50 bps
Fleet and Wholesale 5.7 5.6 +10 bps 5.8 5.5
% % % % +30 bps
Total 100.0 100.0 100.0 100.0
% % % %
Retail Automotive Gross Profit Mix Percentages:
New Vehicles 22.0 23.6 -160 bps 22.4 23.6
% % % % -120 bps
Used Vehicles 12.0 13.8 -180 bps 12.4 14.0
% % % % -160 bps
Finance and Insurance, Net 22.2 20.8 +140 bps 21.5 20.6
% % % % +90 bps
Service and Parts 43.0 41.1 +190 bps 43.0 41.0
% % % % +200 bps
Fleet and Wholesale 0.8 0.7 +10 bps 0.7 0.8
% % % % -10 bps
Total 100.0 100.0 100.0 100.0
% % % %
PENSKE AUTOMOTIVE GROUP, INC.
Retail Automotive Operations Same-Store
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019 2018 Change 2019 2018 Change
Retail Automotive Same-Store Units:
New Retail 56,573 57,819 (2.2) 163,418 175,001 (6.6)
% %
Used Retail 73,261 70,881 3.4 215,720 213,903 0.8
% %
Total 129,834 128,700 0.9 379,138 388,904 (2.5)
%
%
Retail Automotive Same-Store Revenue: (Amounts in Millions)
New Vehicles $
2,294.1 $
2,299.4 (0.2) $
6,710.4 $
7,149.1 (6.1)
% %
Used Vehicles 1,800.0 1,800.9 (0.0) 5,445.6 5,495.3 (0.9)
% %
Finance and Insurance, Net 163.9 156.1 5.0 484.6 474.0 2.2
% %
Service and Parts 535.5 513.6 4.3 1,619.9 1,577.4 2.7
% %
Fleet and Wholesale 285.2 285.7 (0.2)
%
% 872.5 867.1 0.6
Total Revenue $
5,078.7 $
5,055.7 0.5 $
15,133.0 $
15,562.9 (2.8)
%
%
Retail Automotive Same-Store Gross Profit: (Amounts in Millions)
New Vehicles $
160.6 $
176.1 (8.8) $
496.8 $
540.7 (8.1)
% %
Used Vehicles 88.2 104.1 (15.3) 282.0 322.9 (12.7)
% %
Finance and Insurance, Net 163.9 156.1 5.0 484.6 474.0 2.2
% %
Service and Parts 316.6 307.3 3.0 960.4 937.0 2.5
% %
Fleet and Wholesale 5.7 5.5 3.6 14.6 16.4 (11.0)
% %
Total Gross Profit $
735.0 $
749.1 (1.9) $
2,238.4 $
2,291.0 (2.3)
% %
Retail Automotive Same-Store Revenue Per Vehicle Retailed:
New Vehicles $
40,550 $
39,769 2.0 $
41,063 $
40,852 0.5
% %
Used Vehicles 24,569 25,407 (3.3) 25,244 25,690 (1.7)
% %
Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:
New Vehicles $
2,839 $
3,045 (6.8) $
3,040 $
3,090 (1.6)
% %
Used Vehicles 1,204 1,469 (18.0) 1,307 1,509 (13.4)
% %
Finance and Insurance 1,262 1,213 4.0 1,278 1,219 4.8
% %
Retail Automotive Same-Store Gross Margin:
New Vehicles 7.0 7.7 -70
bps 7.4 7.6
% % % % -20
bps
Used Vehicles 4.9 5.8 -90
bps 5.2 5.9
% % % % -70
bps
Service and Parts 59.1 59.8 -70
bps 59.3 59.4
% % % % -10
bps
Fleet and Wholesale 2.0 1.9 +10
bps 1.7 1.9
% % % % -20
bps
Total Gross Margin 14.5 14.8 -30
bps 14.8 14.7
% % % % +10
bps
Retail Automotive Revenue Mix Percentages:
New Vehicles 45.2 45.5 -30
bps 44.3 45.9
% % % % -160
bps
Used Vehicles 35.4 35.6 -20
bps 36.0 35.3
% % % % +70
bps
Finance and Insurance, Net 3.2 3.1 +10
bps 3.2 3.0
% % % % +20
bps
Service and Parts 10.5 10.2 +30
bps 10.7 10.1
% % % % +60
bps
Fleet and Wholesale 5.7 5.6 +10
bps 5.8 5.7
% % % % +10
bps
Total 100.0 100.0 100.0 100.0
% % % %
Retail Automotive Gross Profit Mix Percentages:
New Vehicles 21.9 23.5 -160
bps 22.2 23.6
% % % % -140
bps
Used Vehicles 12.0 13.9 -190
bps 12.6 14.1
% % % % -150
bps
Finance and Insurance, Net 22.3 20.8 +150
bps 21.6 20.7
% % % % +90
bps
Service and Parts 43.1 41.0 +210
bps 42.9 40.9
% % % % +200
bps
Fleet and Wholesale 0.7 0.8 -10
bps 0.7 0.7
% % % %
bps
Total 100.0 100.0 100.0 100.0
% % % %
PENSKE AUTOMOTIVE GROUP, INC.
Retail Commercial Truck Operations
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019 2018 Change 2019 2018 Change
Retail Commercial Truck Units:
New Retail 4,154 2,431 70.9 8,688 6,107 42.3
% %
Used Retail 578 579 (0.2) 1,435 1,516 (5.3)
% %
Total 4,732 3,010 57.2 10,123 7,623 32.8
% %
Retail Commercial Truck Revenue: (Amounts in Millions)
New Vehicles $
476.2 $
249.4 90.9 $
979.6 $
630.5 55.4
% %
Used Vehicles 36.1 32.5 11.1 87.8 86.3 1.7
% %
Finance and Insurance, Net 3.1 2.9 6.9
% 9.0 9.0
%
Service and Parts 154.6 93.1 66.1 340.7 275.7 23.6
% %
Wholesale and Other 22.3 7.4 201.4 34.3 15.0 128.7
% %
Total Revenue $
692.3 $
385.3 79.7 $
1,451.4 $
1,016.5 42.8
% %
Retail Commercial Truck Gross Profit: (Amounts in Millions)
New Vehicles $
21.8 $
12.0 81.7 $
43.8 $
28.2 55.3
% %
Used Vehicles 3.3 4.0 (17.5) 8.9 9.8 (9.2)
%
%
Finance and Insurance, Net 3.1 2.9 6.9
% 9.0 9.0
%
Service and Parts 55.2 36.4 51.6 128.6 106.3 21.0
% %
Wholesale and Other 3.2 2.5
nm 9.2 3.5
nm
Total Gross Profit $
86.6 $
57.8 49.8 $
199.5 $
156.8 27.2
% %
Retail Commercial Truck Revenue Per Vehicle Retailed:
New Vehicles $
114,636 $
102,610 11.7 $
112,746 $
103,257 9.2
% %
Used Vehicles 62,460 56,214 11.1 61,248 56,943 7.6
% %
Retail Commercial Truck Gross Profit Per Vehicle Retailed:
New Vehicles $
5,244 $
4,952 5.9 $
5,038 $
4,620 9.0
% %
Used Vehicles 5,684 6,986 (18.6) 6,211 6,476 (4.1)
%
%
Finance and Insurance 658 948 (30.6) 888 1,183 (24.9)
% %
Retail Commercial Truck Gross Margin:
New Vehicles 4.6 4.8 -20
bps 4.5 4.5
% % % % bps
Used Vehicles 9.1 12.3 -320
bps 10.1 11.4
% % % % -130 bps
Service and Parts 35.7 39.1 -340
bps 37.7 38.6
% % % % -90 bps
Total Gross Margin 12.5 15.0 -250
bps 13.7 15.4
% % % % -170 bps
Retail Commercial Truck Revenue Mix Percentages:
New Vehicles 68.8 64.7 +410
bps 67.5 62.0
% % % % +550 bps
Used Vehicles 5.2 8.4 -320
bps 6.0 8.5
% % % % -250 bps
Finance and Insurance, Net 0.4 0.8 -40
bps 0.6 0.9
% % % % -30 bps
Service and Parts 22.3 24.2 -190
bps 23.5 27.1
% % % % -360 bps
Wholesale and Other 3.3 1.9 +140
bps 2.4 1.5
% % % % +90 bps
Total 100.0 100.0 100.0 100.0
% % % %
Retail Commercial Truck Gross Profit Mix Percentages:
New Vehicles 25.2 20.8 +440
bps 22.0 18.0
% % % % +400 bps
Used Vehicles 3.8 6.9 -310
bps 4.5 6.3
% % % % -180 bps
Finance and Insurance, Net 3.6 5.0 -140
bps 4.5 5.7
% % % % -120 bps
Service and Parts 63.7 63.0 +70
bps 64.5 67.8
% % % % -330 bps
Wholesale and Other 3.7 4.3 -60
bps 4.5 2.2
% % % % +230 bps
Total 100.0 100.0 100.0 100.0
% % % %
PENSKE AUTOMOTIVE GROUP, INC.
Retail Commercial Truck Operations Same-Store
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019 2018 Change 2019 2018 Change
Retail Commercial Truck Same-Store Units:
New Retail 2,406 2,431 (1.0)
%
% 6,849 6,039 13.4
Used Retail 398 579 (31.3) 1,244 1,514 (17.8)
% %
Total 2,804 3,010 (6.8)
%
% 8,093 7,553 7.1
Retail Commercial Truck Same-Store Revenue: (Amounts in Millions)
New Vehicles $
269.3 $
249.4 8.0 $
761.5 $
620.7 22.7
% %
Used Vehicles 24.9 32.5 (23.4) 76.3 86.2 (11.5)
% %
Finance and Insurance, Net 2.5 2.9 (13.8) 8.3 8.9 (6.7)
%
%
Service and Parts 98.6 92.7 6.4 281.9 272.5 3.4
% %
Wholesale and Other 5.0 7.3 (31.5) 17.0 14.9 14.1
% %
Total Revenue $
400.3 $
384.8 4.0 $
1,145.0 $
1,003.2 14.1
% %
Retail Commercial Truck Same-Store Gross Profit: (Amounts in Millions)
New Vehicles $
10.9 $
12.0 (9.2)
%
% $
32.0 $
27.6 15.9
Used Vehicles 1.9 4.0 (52.5) 7.4 9.8 (24.5)
% %
Finance and Insurance, Net 2.5 2.9 (13.8) 8.3 8.9 (6.7)
%
%
Service and Parts 39.1 36.3 7.7 111.4 105.1 6.0
% %
Wholesale and Other 3.1 2.3
nm 9.0 3.2
nm
Total Gross Profit $
57.5 $
57.5
% $
168.1 $
154.6 8.7
%
Retail Commercial Truck Same-Store Revenue Per Vehicle Retailed:
New Vehicles $
111,913 $
102,610 9.1 $
111,189 $
102,786 8.2
% %
Used Vehicles 62,674 56,214 11.5 61,346 56,962 7.7
% %
Retail Commercial Truck Same-Store Gross Profit Per Vehicle Retailed:
New Vehicles $
4,514 $
4,952 (8.8)
%
% $
4,678 $
4,572 2.3
Used Vehicles 4,680 6,986 (33.0) 5,975 6,471 (7.7)
%
%
Finance and Insurance 902 948 (4.9)
%
% 1,030 1,180 (12.7)
Retail Commercial Truck Same-Store Gross Margin:
New Vehicles 4.0 4.8 -80 bps 4.2 4.4
% % % % -20
bps
Used Vehicles 7.6 12.3 -470 bps 9.7 11.4
% % % % -170
bps
Service and Parts 39.7 39.2 +50 bps 39.5 38.6
% % % % +90
bps
Total Gross Margin 14.4 14.9 -50 bps 14.7 15.4
% % % % -70
bps
Retail Commercial Truck Revenue Mix Percentages:
New Vehicles 67.3 64.8 +250 bps 66.5 61.9
% % % % +460
bps
Used Vehicles 6.2 8.4 -220 bps 6.7 8.6
% % % % -190
bps
Finance and Insurance, Net 0.6 0.8 -20 bps 0.7 0.9
% % % % -20
bps
Service and Parts 24.6 24.1 +50 bps 24.6 27.2
% % % % -260
bps
Wholesale and Other 1.3 1.9 -60 bps 1.5 1.4
% % % % +10
bps
Total 100.0 100.0 100.0 100.0
% % % %
Retail Commercial Truck Gross Profit Mix Percentages:
New Vehicles 19.0 20.9 -190 bps 19.0 17.9
% % % % +110
bps
Used Vehicles 3.3 7.0 -370 bps 4.4 6.3
% % % % -190
bps
Finance and Insurance, Net 4.3 5.0 -70 bps 4.9 5.8
% % % % -90
bps
Service and Parts 68.0 63.1 +490 bps 66.3 67.9
% % % % -160
bps
Wholesale and Other 5.4 4.0 +140 bps 5.4 2.1
% % % % +330
bps
Total 100.0 100.0 100.0 100.0
% % % %
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, 2019 and 2018:
Income from Continuing Operations:
---
Three Months Ended
Nine Months Ended
(Amounts in Millions)
September 30,
September 30,
2019 2018 % Change 2019 2018 % Change
Income from Continuing Operations $
116.1 $
130.1 (10.8) $
333.9 $
372.7 (10.4)
% %
Less: Income tax benefit (1) (11.6)
nm (11.6)
nm
Adjusted Income from Continuing Operations $
116.1 $
118.5 (2.0) $
333.9 $
361.1 (7.5)
% %
Earnings Per Share:
---
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019 2018 % Change 2019 2018 % Change
Earnings Per Share from Continuing Operations $
1.42 $
1.53 (7.2) $
4.02 $
4.37 (8.0)
% %
Less: Income tax benefit (1) (0.14)
nm (0.14)
nm
Adjusted Earnings Per Share from Continuing Operations $
1.42 $
1.40 (2) 1.4 $
4.02 $
4.23 (5.0)
% %
(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 income tax expense for the three and nine months ended September 30, 2019 and 2018:
Three Months Ended
September 30, 2019 vs. 2018
(Amounts in Millions) 2019 2018 Change % Change
Tax Expense $
42.4 $
27.1 $
15.3 56.5
%
Add: Income Tax Benefit (1) 11.6 (11.6)
nm
Adjusted Income Tax Expense $
42.4 $
38.7 $
3.7 9.6
%
Effective Tax Rate 26.8 17.3
% % +950
bps
nm
Adjusted Effective Tax Rate 26.8 24.6
% % +220
bps
nm
Nine Months Ended
September 30, 2019 vs. 2018
(Amounts in Millions) 2019 2018 Change % Change
Tax Expense $
118.6 $
104.7 $
13.9 13.3
%
Add: Income Tax Benefit (1) 11.6 (11.6)
nm
Adjusted Income Tax Expense $
118.6 $
116.3 $
2.3 2.0
%
Effective Tax Rate 26.2 21.9
% % +430
bps
nm
Adjusted Effective Tax Rate 26.2 24.4
% % +180
bps
nm
(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.
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Non-GAAP Reconciliations
(Unaudited)
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, 2019 and 2018:
Three Months Ended
September 30, 2019 vs. 2018
(Amounts in Millions) 2019 2018 Change % Change
Net Income $
116.1 $
130.1 $
(14.0) (10.8)
%
Add: Depreciation 27.5 25.9 1.6 6.2
%
Other Interest Expense 32.9 28.3 4.6 16.3
%
Income Taxes 42.4 27.1 15.3 56.5
%
Income from Discontinued Operations, net of tax (0.1) (0.1)
EBITDA $
218.8 $
211.3 $
7.5 3.5
%
Nine Months Ended
September 30, 2019 vs. 2018
(Amounts in Millions) 2019 2018 Change % Change
Net Income $
333.8 $
373.1 $
(39.3) (10.5)
%
Add: Depreciation 81.0 77.2 3.8 4.9
%
Other Interest Expense 93.2 86.7 6.5 7.5
%
Income Taxes 118.6 104.7 13.9 13.3
%
Income from Discontinued Operations, net of tax (0.3) (0.2) (0.1)
nm
EBITDA $
626.3 $
641.5 $
(15.2) (2.4)
%
nm - not meaningful
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SOURCE Penske Automotive Group, Inc.
