Penske Automotive Reports Record Third Quarter 2018 Results
BLOOMFIELD HILLS, Mich., Oct. 25, 2018 /PRNewswire/ -- Penske Automotive Group, Inc. (NYSE: PAG), an international transportation services company consisting of franchised retail automotive dealerships, stand-alone used vehicle supercenters, heavy and medium duty retail truck dealerships, and distribution of commercial trucks and power systems, today announced record third quarter and record nine months 2018 results. For the three months ended September 30, 2018, income from continuing operations attributable to common shareholders increased 38.0% to $130.1 million, and related earnings per share increased 39.1% to $1.53 when compared to the same period last year. Total revenue increased 2.4% to $5.7 billion, while same-store retail revenue increased 0.2%. Excluding foreign exchange, total revenue increased 2.9%, while same-store retail revenue increased 0.5%. Foreign exchange rates negatively impacted earnings per share attributable to common shareholders by $0.01. As a result of tax reform enacted in 2017, the company's effective tax rate in the third quarter of 2018 was 17.3% compared to 32.2% in the third quarter of 2017.
For the three and nine months ended September 30, 2018, income and earnings per share from continuing operations attributable to common shareholders included a tax benefit of $11.6 million, or $0.14 per share. This benefit relates to the final reconciliation of the income tax benefit related to the enactment of the 2017 U.S. Tax Cuts and Jobs Act. The third quarter 2018 adjustment primarily relates to reductions in the repatriation tax. Excluding this benefit, adjusted income from continuing operations increased 25.7% to $118.5 million, and related earnings per share increased 27.3% to $1.40 for the three months ended September 30, 2018.
"I am particularly pleased to report another quarter of record revenues, income from continuing operations and earnings per share, which continue to demonstrate the benefit of our diversification," said Penske Automotive Group Chairman Roger S. Penske. "The strength of our performance in the third quarter was driven by increases in new vehicle, used vehicle and finance & insurance gross profit per retail unit sold, coupled with a 70 basis-point increase in service and parts gross margin. Further, our U.K. business produced another record quarter on the strength of its premium brand mix and stand-alone used vehicle supercenter operations. Also contributing to the company's record third quarter was the 25.4% same-store retail revenue increase in the company's North American retail commercial truck business and our investment in Penske Truck Leasing."
For the nine months ended September 30, 2018, total record revenue increased 8.5% to $17.3 billion, with a 5.0% increase in same-store retail revenue. Record income from continuing operations attributable to common shareholders increased 31.5% to $372.7 million and related earnings per share increased 32.4% to $4.37 when compared to the same period last year. Excluding foreign exchange, total revenue increased 5.8%, while same-store retail revenue increased 2.3%. Foreign exchange rates positively impacted earnings per share attributable to common shareholders by $0.08. Excluding the tax benefit noted above, record adjusted income from continuing operations increased 27.4% to $361.1 million, and related earnings per share increased 28.2% to $4.23.
Automotive Retail Highlights of the Third Quarter
-- Same-Store Retail Unit Sales -2.2% to 123,799
-- New unit retail sales -6.6%
-- Used unit retail sales +2.1%
-- Same-Store Retail Revenue +0.2%; Excluding Foreign Exchange +0.5%
-- New -4.2%; Used +6.1%; Finance & Insurance +3.5%; Service and Parts
+1.7%
-- Same-Store Average Gross Profit Per Unit
-- New $3,030, +$130/unit; Gross Margin 7.6%, +10 basis points
-- Used $1,504, +$62/unit; Gross Margin 5.7%, +0 basis points
-- Finance & Insurance $1,244, +$68/unit
Stand Alone Used SuperCenter Operations
The company operates fourteen stand-alone used vehicle supercenters, five of which are located in the U.S. and nine are located in the U.K., and one vehicle preparation center in the U.K. For the three and nine months ended September 30, 2018, these supercenters retailed 18,568 and 56,073 units of the company's total automotive units retailed, and generated $329.7 million and $1.0 billion in revenue, respectively. The company is in the process of developing four new stand-alone used vehicle supercenters which are expected to open in 2019. The expansion includes two new sites in the U.S. and another two in the U.K.
Retail Commercial Truck Operations
Penske Automotive Group operates twenty-one medium and heavy-duty truck dealership locations in the U.S. and Canada offering primarily Freightliner and Western Star brands. For the three and nine months ended September 30, 2018, total medium and heavy-duty units retailed increased 35.5% (33.8% same-store) and 44.1% (42.8% same-store), respectively. Same-store revenue increased 25.4% for the three months and 35.0% for the nine months ended September 30, 2018.
Penske Truck Leasing
Penske Truck Leasing Co., L.P. ("PTL") is a leading provider of full-service truck leasing, truck rental, contract maintenance, and logistics services. During the third quarter of 2017, the company increased its ownership interests in PTL by 5.5%, bringing our total ownership interest in PTL to 28.9%. The company accounts for its ownership interest in PTL using the equity method of accounting. For the three and nine months ended September 30, 2018, the company recorded $40.7 million and $91.7 million in earnings from this investment compared to $30.1 million and $66.9 million for the same periods last year, respectively.
Dividend and Share Repurchases
On October 17, 2018, the company announced that its Board of Directors increased the dividend to its common stock shareholders to $0.37 per share, the 30(th) consecutive increase in the quarterly dividend.
For the nine months ended September 30, 2018, the company repurchased 1,252,624 shares for $55.8 million. Approximately $150.0 million remains available to repurchase shares under the company's existing share repurchase authorization.
Conference Call
Penske Automotive Group will host a conference call discussing financial results relating to the third quarter of 2018 on Thursday, October 25, 2018, at 2:00 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial (800) 230?1074 - [International, please dial (612) 288?0329]. The call will also be simultaneously broadcast over the Internet through the Investor's section of the Penske Automotive Group website. Additionally, an investor presentation relating to the third quarter 2018 financial results has been posted to the company's website. To access the presentation or to listen to the company's webcast, please refer to www.penskeautomotive.com.
About Penske Automotive
Penske Automotive Group, Inc., (NYSE: PAG) headquartered in Bloomfield Hills, Michigan, is an international transportation services company that operates automotive and commercial truck dealerships principally in the United States, Canada, and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. PAG employs more than 26,000 people worldwide and is a member of the Fortune 500 and Russell 2000, and is ranked among the World's Most Admired Companies by Fortune Magazine. For additional information, visit the company's website at www.penskeautomotive.com.
Non-GAAP Financial Measures
This release contains certain non-GAAP financial measures as defined under SEC rules, such as earnings before interest, taxes, depreciation and amortization ("EBITDA"). The company has reconciled these measures to the most directly comparable GAAP measures in the release. The company believes that these widely accepted measures of operating profitability improve the transparency of the company's disclosures and provide a meaningful presentation of the company's results from its core business operations excluding the impact of items not related to the company's ongoing core business operations, and improve the period-to-period comparability of the company's results from its core business operations. These non-GAAP financial measures are not substitutes for GAAP financial results, and should only be considered in conjunction with the company's financial information that is presented in accordance with GAAP.
Caution Concerning Forward Looking Statements
Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s future sales and earnings potential. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others: economic conditions generally, conditions in the credit markets and changes in interest rates and foreign currency exchange rates, changes in tariff rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters such as the recent hurricanes, recall or other disruptions that interrupt the supply of vehicles or parts to us, changes in consumer credit availability, the outcome of legal and administrative matters, and other factors over which management has limited control. These forward-looking statements should be evaluated together with additional information about Penske Automotive Group's business, markets, conditions and other uncertainties, which could affect Penske Automotive Group's future performance. These risks and uncertainties are addressed in Penske Automotive Group's Form 10?K for the year ended December 31, 2017, and its other filings with the Securities and Exchange Commission ("SEC"). This press release speaks only as of its date, and Penske Automotive Group disclaims any duty to update the information herein.
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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,
2018 2017 Change 2018 2017 Change
Revenue $
5,658.6 $
5,524.4 2.4 $
17,345.8 $
15,988.9 8.5
% %
Cost of Sales 4,806.0 4,701.8 2.2 14,739.0 13,574.7 8.6
% %
Gross Profit $
852.6 $
822.6 3.6 $
2,606.8 $
2,414.2 8.0
% %
SG&A Expenses 662.8 646.1 2.6 2,001.3 1,869.8 7.0
% %
Depreciation 25.9 24.3 6.6 77.2 70.0 10.3
% %
Operating Income $
163.9 $
152.2 7.7 $
528.3 $
474.4 11.4
% %
Floor Plan Interest Expense (20.2) (16.4) 23.2 (59.0) (45.6) 29.4
% %
Other Interest Expense (28.3) (27.8) 1.8 (86.7) (79.2) 9.5
% %
Equity in Earnings of Affiliates 41.7 30.9 35.0 95.0 70.9 34.0
% %
Income from Continuing Operations Before Income Taxes $
157.1 $
138.9 13.1 $
477.6 $
420.5 13.6
% %
Income Taxes (27.1) (44.7) (39.4) (104.7) (136.0) (23.0)
% %
Income from Continuing Operations $
130.0 $
94.2 38.0 $
372.9 $
284.5 31.1
% %
Income (Loss) from Discontinued Operations, net of tax 0.1 0.1 % 0.2 (0.3)
nm %
Net Income $
130.1 $
94.3 38.0 $
373.1 $
284.2 31.3
% %
Less: (Loss) Income Attributable to Non-Controlling Interests (0.1) (0.1) % 0.2 1.0 (80.0)
%
Net Income Attributable to Common Shareholders $
130.2 $
94.4 37.9 $
372.9 $
283.2 31.7
% %
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations $
130.0 $
94.2 38.0 $
372.9 $
284.5 31.1
% %
Less: (Loss) Income Attributable to Non-Controlling Interests (0.1) (0.1) % 0.2 1.0 (80.0)
%
Income from Continuing Operations, net of tax $
130.1 $
94.3 38.0 $
372.7 $
283.5 31.5
% %
Income (Loss) from Discontinued Operations, net of tax 0.1 0.1 % 0.2 (0.3)
nm %
Net Income Attributable to Common Shareholders $
130.2 $
94.4 37.9 $
372.9 $
283.2 31.7
% %
Income from Continuing Operations Per Share $
1.53 $
1.10 39.1 $
4.37 $
3.30 32.4
% %
Income Per Share $
1.53 $
1.10 39.1 $
4.37 $
3.30 32.4
% %
Weighted Average Shares Outstanding 84.9 86.0 (1.3) 85.3 85.9 (0.7)
% %
nm - not meaningful
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Millions)
(Unaudited)
September 30, December 31,
2018 2017
Assets:
Cash and Cash Equivalents $
37.6 $
45.7
Accounts Receivable, Net 953.4 954.9
Inventories 3,783.4 3,944.1
Other Current Assets 91.8 81.8
Total Current Assets 4,866.2 5,026.5
Property and Equipment, Net 2,178.2 2,108.6
Intangibles 2,164.5 2,134.5
Other Long-Term Assets 1,318.0 1,271.0
Total Assets $
10,526.9 $
10,540.6
Liabilities and Equity:
Floor Plan Notes Payable $
2,169.5 $
2,343.2
Floor Plan Notes Payable - Non-Trade 1,359.0 1,418.6
Accounts Payable 633.8 641.6
Accrued Expenses 570.2 523.5
Current Portion Long-Term Debt 92.7 72.8
Liabilities Held for Sale 0.7 0.7
Total Current Liabilities 4,825.9 5,000.4
Long-Term Debt 1,993.3 2,090.4
Other Long-Term Liabilities 1,095.7 1,021.8
Total Liabilities 7,914.9 8,112.6
Equity 2,612.0 2,428.0
Total Liabilities and Equity $
10,526.9 $
10,540.6
Supplemental Balance Sheet Information
New vehicle days' supply 61 67
Used vehicle days' supply 48 55
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Operations
Selected Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
Geographic Revenue Mix:
North America 57.9 58.9 55.4 58.6
% % % %
U.K. 34.4 33.8 36.0 33.9
% % % %
Other International 7.7 7.3 8.6 7.5
% % % %
Total 100.0 100.0 100.0 100.0
% % % %
Revenue: (Amounts in Millions)
Retail Automotive $
5,148.5 $
5,085.4 $
15,900.0 $
14,882.5
Retail Commercial Trucks 385.3 299.6 1,016.5 739.8
Commercial Vehicles Australia/Power Systems and Other 124.8 139.4 429.3 366.6
Total $
5,658.6 $
5,524.4 $
17,345.8 $
15,988.9
Gross Profit: (Amounts in Millions)
Retail Automotive $
762.2 $
744.2 $
2,338.5 $
2,198.5
Retail Commercial Trucks 57.8 44.3 156.8 120.7
Commercial Vehicles Australia/Power Systems and Other 32.6 34.1 111.5 95.0
Total $
852.6 $
822.6 $
2,606.8 $
2,414.2
Gross Margin:
Retail Automotive 14.8 14.6 14.7 14.8
% % % %
Retail Commercial Trucks 15.0 14.8 15.4 16.3
% % % %
Commercial Vehicles Australia/Power Systems and Other 26.1 24.5 26.0 25.9
% % % %
Total 15.1 14.9 15.0 15.1
% % % %
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
Operating Items as a Percentage of Revenue:
Gross Profit 15.1 14.9 15.0 15.1
% % % %
Selling, General and Administrative Expenses 11.7 11.7 11.5 11.7
% % % %
Operating Income 2.9 2.8 3.0 3.0
% % % %
Income from Continuing Operations Before Income Taxes 2.8 2.5 2.8 2.6
% % % %
Operating Items as a Percentage of Total Gross Profit:
Selling, General and Administrative Expenses 77.7 78.5 76.8 77.5
% % % %
Operating Income 19.2 18.5 20.3 19.7
% % % %
Three Months Ended Nine Months Ended
September 30, September 30,
(Amounts in Millions) 2018 2017 2018 2017
EBITDA* $
211.3 $
191.0 $
641.5 $
569.7
Floorplan Credits $
11.1 $
10.9 $
29.9 $
29.3
Rent Expense $
58.4 $
59.3 $
175.3 $
168.1
Capital Expenditures $
69.7 $
66.7 $
188.5 $
180.1
Stock Repurchases
$ $
10.0 $
55.8 $
18.5
* See the following Non-GAAP
reconciliation table.
PENSKE AUTOMOTIVE GROUP, INC.
Retail Automotive Operations
Selected Data - Revenue and Gross Profit Mix
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
Retail Automotive Revenue Mix:
Premium:
BMW / MINI 23 22 22 23
% % % %
Audi 12 15 13 14
% % % %
Mercedes-Benz 9 10 9 10
% % % %
Land Rover / Jaguar 9 8 9 8
% % % %
Porsche 5 6 6 6
% % % %
Ferrari / Maserati 3 3 3 3
% % % %
Lexus 3 3 3 3
% % % %
Acura 1 1 1 1
% % % %
Bentley 1 1 1 1
% % % %
Others 2 1 2 1
% % % %
Total Premium 68 70 69 70
% % % %
Volume Non-U.S.:
Toyota 11 10 10 10
% % % %
Honda 7 7 6 7
% % % %
Volkswagen 4 3 4 3
% % % %
Nissan 1 1 1 1
% % % %
Others 1 2 2 2
% % % %
Total Volume Non-U.S. 24 23 23 23
% % % %
U.S.:
General Motors / Chrysler / Ford 2 3 2 3
% % % %
Stand-Alone Used 6 4 6 4
% % % %
Total 100 100 100 100
% % % %
Retail Automotive Geographic Revenue Mix:
U.S. 56 58 54 58
% % % %
U.K. 38 37 39 36
% % % %
Other International 6 5 7 6
% % % %
Total 100 100 100 100
% % % %
Retail Automotive Geographic Gross Profit Mix:
U.S. 59 62 58 62
% % % %
U.K. 35 33 36 32
% % % %
Other International 6 5 6 6
% % % %
Total 100 100 100 100
% % % %
PENSKE AUTOMOTIVE GROUP, INC.
Retail Automotive Operations
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2018 2017 Change 2018 2017 Change
Retail Automotive Units:
New Retail 58,933 64,365 (8.4) 179,266 187,377 (4.3)
% %
Used Retail 72,000 65,892 9.3 218,371 194,384 12.3
% %
Total 130,933 130,257 0.5 397,637 381,761 4.2
% %
Retail Automotive Revenue: (Amounts in Millions)
New Vehicles $
2,350.2 $
2,480.8 (5.3)
%
% $
7,325.6 $
7,189.9 1.9
Used Vehicles 1,825.2 1,669.5 9.3 5,588.9 4,850.6 15.2
% %
Finance and Insurance, Net 158.5 152.0 4.3 482.2 436.6 10.4
% %
Service and Parts 523.8 520.9 0.6 1,615.1 1,540.1 4.9
% %
Fleet and Wholesale 290.8 262.2 10.9 888.2 865.3 2.6
% %
Total Revenue $
5,148.5 $
5,085.4 1.2 $
15,900.0 $
14,882.5 6.8
% %
Retail Automotive Gross Profit: (Amounts in Millions)
New Vehicles $
179.8 $
185.2 (2.9)
% $
552.8 $
552.6
%
Used Vehicles 105.3 94.5 11.4 327.5 282.4 16.0
% %
Finance and Insurance, Net 158.5 152.0 4.3 482.2 436.6 10.4
% %
Service and Parts 313.2 308.0 1.7 959.5 911.4 5.3
% %
Fleet and Wholesale 5.4 4.5 20.0 16.5 15.5 6.5
% %
Total Gross Profit $
762.2 $
744.2 2.4 $
2,338.5 $
2,198.5 6.4
% %
Retail Automotive Revenue Per Vehicle Retailed:
New Vehicles $
39,880 $
38,542 3.5 $
40,865 $
38,371 6.5
% %
Used Vehicles 25,350 25,337 0.1 25,593 24,954 2.6
% %
Retail Automotive Gross Profit Per Vehicle Retailed:
New Vehicles $
3,050 $
2,877 6.0 $
3,084 $
2,949 4.6
% %
Used Vehicles 1,462 1,434 2.0 1,499 1,453 3.2
% %
Finance and Insurance 1,210 1,167 3.7 1,212 1,144 5.9
% %
Total Variable Gross Profit Per Vehicle (1) 3,388 3,314 2.2 3,426 3,331 2.9
% %
Retail Automotive Gross Margin:
New Vehicles 7.7 7.5 +20 bps 7.5 7.7
% % % % -20 bps
Used Vehicles 5.8 5.7 +10 bps 5.9 5.8
% % % % +10 bps
Service and Parts 59.8 59.1 +70 bps 59.4 59.2
% % % % +20 bps
Fleet and Wholesale 1.9 1.7 +20 bps 1.9 1.8
% % % % +10 bps
Total Gross Margin 14.8 14.6 +20 bps 14.7 14.8
% % % % -10 bps
Retail Automotive Revenue Mix Percentages:
New Vehicles 45.6 48.8 -320 bps 46.1 48.3
% % % % -220 bps
Used Vehicles 35.5 32.8 +270 bps 35.2 32.6
% % % % +260 bps
Finance and Insurance, Net 3.1 3.0 +10 bps 3.0 2.9
% % % % +10 bps
Service and Parts 10.2 10.2 bps 10.2 10.3
% % % % -10 bps
Fleet and Wholesale 5.6 5.2 +40 bps 5.5 5.9
% % % % -40 bps
Total 100.0 100.0 100.0 100.0
% % % %
Retail Automotive Gross Profit Mix Percentages:
New Vehicles 23.6 24.9 -130 bps 23.6 25.1
% % % % -150 bps
Used Vehicles 13.8 12.7 +110 bps 14.0 12.8
% % % % +120 bps
Finance and Insurance, Net 20.8 20.4 +40 bps 20.6 19.9
% % % % +70 bps
Service and Parts 41.1 41.4 -30 bps 41.0 41.5
% % % % -50 bps
Fleet and Wholesale 0.7 0.6 +10 bps 0.8 0.7
% % % % +10 bps
Total 100.0 100.0 100.0 100.0
% % % %
(1) Calculated by dividing the
sum of new vehicle, used
vehicle, and finance and
insurance gross profit by
total retail automotive unit
sales.
PENSKE AUTOMOTIVE GROUP, INC.
Retail Automotive Operations Same-Store
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2018 2017 Change 2018 2017 Change
Retail Automotive Same-Store Units:
New Retail 58,463 62,591 (6.6) 174,763 179,632 (2.7)
% %
Used Retail 65,336 63,986 2.1 158,547 155,676 1.8
% %
Total 123,799 126,577 (2.2) 333,310 335,308 (0.6)
% %
Retail Automotive Same-Store Revenue: (Amounts in Millions)
New Vehicles $
2,324.3 $
2,426.9 (4.2)
%
% $
7,070.3 $
6,901.2 2.5
Used Vehicles 1,729.5 1,630.8 6.1 4,617.4 4,242.7 8.8
% %
Finance and Insurance, Net 154.1 148.9 3.5 413.1 386.1 7.0
% %
Service and Parts 520.8 512.1 1.7 1,552.7 1,474.8 5.3
% %
Fleet and Wholesale 280.4 255.7 9.7 738.3 764.3 (3.4)
%
%
Total Revenue $
5,009.1 $
4,974.4 0.7 $
14,391.8 $
13,769.1 4.5
% %
Retail Automotive Same-Store Gross Profit: (Amounts in Millions)
New Vehicles $
177.2 $
181.5 (2.4) $
528.9 $
529.8 (0.2)
% %
Used Vehicles 98.3 92.3 6.5 256.9 234.3 9.6
% %
Finance and Insurance, Net 154.1 148.9 3.5 413.1 386.1 7.0
% %
Service and Parts 308.1 302.0 2.0 904.9 863.8 4.8
% %
Fleet and Wholesale 5.1 4.4 15.9 11.9 13.8 (13.8)
% %
Total Gross Profit $
742.8 $
729.1 1.9 $
2,115.7 $
2,027.8 4.3
% %
Retail Automotive Same-Store Revenue Per Vehicle Retailed:
New Vehicles $
39,757 $
38,774 2.5 $
40,457 $
38,419 5.3
% %
Used Vehicles 26,471 25,487 3.9 29,123 27,254 6.9
% %
Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:
New Vehicles $
3,030 $
2,900 4.5 $
3,027 $
2,949 2.6
% %
Used Vehicles 1,504 1,442 4.3 1,620 1,505 7.6
% %
Finance and Insurance 1,244 1,176 5.8 1,240 1,151 7.7
% %
Total Variable Gross Profit Per Vehicle (1) 3,470 3,339 3.9 3,597 3,430 4.9
% %
Retail Automotive Same-Store Gross Margin:
New Vehicles 7.6 7.5 +10
bps 7.5 7.7
% % % % -20
bps
Used Vehicles 5.7 5.7
bps 5.6 5.5
% % % % +10
bps
Service and Parts 59.2 59.0 +20
bps 58.3 58.6
% % % % -30
bps
Fleet and Wholesale 1.8 1.7 +10
bps 1.6 1.8
% % % % -20
bps
Total Gross Margin 14.8 14.7 +10
bps 14.7 14.7
% % % %
bps
Retail Automotive Revenue Mix Percentages:
New Vehicles 46.4 48.8 -240
bps 49.1 50.1
% % % % -100
bps
Used Vehicles 34.5 32.8 +170
bps 32.1 30.8
% % % % +130
bps
Finance and Insurance, Net 3.1 3.0 +10
bps 2.9 2.8
% % % % +10
bps
Service and Parts 10.4 10.3 +10
bps 10.8 10.7
% % % % +10
bps
Fleet and Wholesale 5.6 5.1 +50
bps 5.1 5.6
% % % % -50
bps
Total 100.0 100.0 100.0 100.0
% % % %
Retail Automotive Gross Profit Mix Percentages:
New Vehicles 23.9 24.9 -100
bps 25.0 26.1
% % % % -110
bps
Used Vehicles 13.2 12.7 +50
bps 12.1 11.6
% % % % +50
bps
Finance and Insurance, Net 20.7 20.4 +30
bps 19.5 19.0
% % % % +50
bps
Service and Parts 41.5 41.4 +10
bps 42.8 42.6
% % % % +20
bps
Fleet and Wholesale 0.7 0.6 +10
bps 0.6 0.7
% % % % -10
bps
Total 100.0 100.0 100.0 100.0
% % % %
(1) Calculated by dividing the
sum of new vehicle, used
vehicle, and finance and
insurance gross profit by
total retail automotive unit
sales.
PENSKE AUTOMOTIVE GROUP, INC.
Retail Commercial Truck Operations
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2018 2017 Change 2018 2017 Change
Retail Commercial Truck Units:
New Retail 2,431 1,757 38.4 6,107 4,060 50.4
% %
Used Retail 579 464 24.8 1,516 1,230 23.3
% %
Total 3,010 2,221 35.5 7,623 5,290 44.1
% %
Retail Commercial Truck Revenue: (Amounts in Millions)
New Vehicles $
249.4 $
184.3 35.3 $
630.5 $
411.5 53.2
% %
Used Vehicles 32.5 25.7 26.5 86.3 67.9 27.1
% %
Finance and Insurance, Net 2.9 2.1 38.1 9.0 6.6 36.4
% %
Service and Parts 93.1 83.3 11.8 275.7 244.6 12.7
% %
Other 7.4 4.2 76.2 15.0 9.2 63.0
% %
Total Revenue $
385.3 $
299.6 28.6 $
1,016.5 $
739.8 37.4
% %
Retail Commercial Truck Gross Profit: (Amounts in
Millions)
New Vehicles $
12.0 $
7.9 51.9 $
28.2 $
17.4 62.1
% %
Used Vehicles 4.0 2.6 53.8 9.8 6.1 60.7
% %
Finance and Insurance, Net 2.9 2.1 38.1 9.0 6.6 36.4
% %
Service and Parts 36.4 31.7 14.8 106.3 90.8 17.1
% %
Other 2.5
nm 3.5 (0.2)
nm
Total Gross Profit $
57.8 $
44.3 30.5 $
156.8 $
120.7 29.9
% %
Retail Commercial Truck Revenue Per Vehicle Retailed:
New Vehicles $
102,610 $
104,874 (2.2)
%
% $
103,257 $
101,332 1.9
Used Vehicles 56,214 55,387 1.5 56,943 55,158 3.2
% %
Retail Commercial Truck Gross Profit Per Vehicle Retailed:
New Vehicles $
4,952 $
4,479 10.6 $
4,620 $
4,286 7.8
% %
Used Vehicles 6,986 5,500 27.0 6,476 4,912 31.8
% %
Finance and Insurance 948 959 (1.1) 1,183 1,244 (4.9)
% %
Total Variable Gross Profit Per Vehicle (1) 6,279 5,673 10.7 6,166 5,690 8.4
% %
Retail Commercial Truck Gross Margin:
New Vehicles 4.8 4.3 +50
bps 4.5 4.2
% % % % +30
bps
Used Vehicles 12.3 10.1 +220
bps 11.4 9.0
% % % % +240
bps
Service and Parts 39.1 38.1 +100
bps 38.6 37.1
% % % % +150
bps
Total Gross Margin 15.0 14.8 +20
bps 15.4 16.3
% % % % -90
bps
Retail Commercial Truck Revenue Mix Percentages:
New Vehicles 64.7 61.5 +320
bps 62.0 55.6
% % % % +640
bps
Used Vehicles 8.4 8.6 -20
bps 8.5 9.2
% % % % -70
bps
Finance and Insurance, Net 0.8 0.7 +10
bps 0.9 0.9
% % % %
bps
Service and Parts 24.2 27.8 -360
bps 27.1 33.1
% % % % -600
bps
Other 1.9 1.4 +50
bps 1.5 1.2
% % % % +30
bps
Total 100.0 100.0 100.0 100.0
% % % %
Retail Commercial Truck Gross Profit Mix Percentages:
New Vehicles 20.8 17.8 +300
bps 18.0 14.4
% % % % +360
bps
Used Vehicles 6.9 5.9 +100
bps 6.3 5.1
% % % % +120
bps
Finance and Insurance, Net 5.0 4.7 +30
bps 5.7 5.5
% % % % +20
bps
Service and Parts 63.0 71.6 -860
bps 67.8 75.2
% % % % -740
bps
Other 4.3 % +430
bps 2.2 (0.2)
% % % +240
bps
Total 100.0 100.0 100.0 100.0
% % % %
(1) Calculated by dividing the sum
of new vehicle, used vehicle,
and finance and insurance
gross profit by total retail
commercial truck unit sales.
PENSKE AUTOMOTIVE GROUP, INC.
Retail Commercial Truck Operations Same-Store
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2018 2017 Change 2018 2017 Change
Retail Commercial Truck Same-Store Units:
New Retail 2,393 1,757 36.2 6,039 4,060 48.7
% %
Used Retail 578 464 24.6 1,514 1,230 23.1
% %
Total 2,971 2,221 33.8 7,553 5,290 42.8
% %
Retail Commercial Truck Same-Store Revenue: (Amounts in
Millions)
New Vehicles $
243.2 $
184.3 32.0 $
620.7 $
411.5 50.8
% %
Used Vehicles 32.5 25.7 26.5 86.2 67.9 27.0
% %
Finance and Insurance, Net 2.8 2.1 33.3 7.2 6.6 9.1
% %
Service and Parts 91.8 83.3 10.2 272.7 244.6 11.5
% %
Other 5.4 4.2 28.6 11.8 9.2 28.3
% %
Total Revenue $
375.7 $
299.6 25.4 $
998.6 $
739.8 35.0
% %
Retail Commercial Truck Same-Store Gross Profit: (Amounts in
Millions)
New Vehicles $
11.7 $
7.9 48.1 $
27.6 $
17.4 58.6
% %
Used Vehicles 4.0 2.6 53.8 9.8 6.1 60.7
% %
Finance and Insurance, Net 2.8 2.1 33.3 7.2 6.6 9.1
% %
Service and Parts 35.8 31.7 12.9 104.9 90.8 15.5
% %
Other 0.5
nm 0.7 (0.2)
nm
Total Gross Profit $
54.8 $
44.3 23.7 $
150.2 $
120.7 24.4
% %
Retail Commercial Truck Same-Store Revenue Per Vehicle Retailed:
New Vehicles $
101,629 $
104,874 (3.1)
%
% $
102,786 $
101,332 1.4
Used Vehicles 56,270 55,387 1.6 56,962 55,158 3.3
% %
Retail Commercial Truck Same-Store Gross Profit Per Vehicle
Retailed:
New Vehicles $
4,898 $
4,479 9.4 $
4,572 $
4,286 6.7
% %
Used Vehicles 6,995 5,500 27.2 6,471 4,912 31.7
% %
Finance and Insurance 937 959 (2.3)
%
% 952 1,244 (23.5)
Total Variable Gross Profit Per Vehicle (1) 6,227 5,673 9.8 5,905 5,690 3.8
% %
Retail Commercial Truck Same-Store Gross Margin:
New Vehicles 4.8 4.3 +50
bps 4.4 4.2
% % % % +20
bps
Used Vehicles 12.3 10.1 +220
bps 11.4 9.0
% % % % +240
bps
Service and Parts 39.0 38.1 +90
bps 38.5 37.1
% % % % +140
bps
Total Gross Margin 14.6 14.8 -20
bps 15.0 16.3
% % % % -130
bps
Retail Commercial Truck Revenue Mix Percentages:
New Vehicles 64.7 61.5 +320
bps 62.2 55.6
% % % % +660
bps
Used Vehicles 8.7 8.6 +10
bps 8.6 9.2
% % % % -60
bps
Finance and Insurance, Net 0.7 0.7
bps 0.7 0.9
% % % % -20
bps
Service and Parts 24.4 27.8 -340
bps 27.3 33.1
% % % % -580
bps
Other 1.5 1.4 +10
bps 1.2 1.2
% % % %
bps
Total 100.0 100.0 100.0 100.0
% % % %
Retail Commercial Truck Gross Profit Mix Percentages:
New Vehicles 21.4 17.8 +360
bps 18.4 14.4
% % % % +400
bps
Used Vehicles 7.3 5.9 +140
bps 6.5 5.1
% % % % +140
bps
Finance and Insurance, Net 5.1 4.7 +40
bps 4.8 5.5
% % % % -70
bps
Service and Parts 65.3 71.6 -630
bps 69.8 75.2
% % % % -540
bps
Other 0.9 % +90
bps 0.5 (0.2)
% % % +70
bps
Total 100.0 100.0 100.0 100.0
% % % %
(1) Calculated by dividing the sum
of new vehicle, used vehicle,
and finance and insurance
gross profit by total retail
commercial truck unit sales.
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Non-GAAP Reconciliations
(Unaudited)
The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three and nine months ended September 30, 2018 and 2017:
Income from Continuing Operations:
---
Three Months Ended
Nine Months Ended
September 30,
September 30,
(Amounts in Millions) 2018 2017 % Change 2018 2017 % Change
Income from Continuing Operations $
130.1 $
94.3 38.0 $
372.7 $
283.5 31.5
% %
Less: Income tax benefit (1) (11.6)
nm (11.6)
nm
Adjusted Income from Continuing Operations $
118.5 $
94.3 25.7 $
361.1 $
283.5 27.4
% %
Earnings Per Share:
---
Three Months Ended
Nine Months Ended
September 30,
September 30,
2018 2017 % Change 2018 2017 % Change
Earnings Per Share from Continuing Operations $
1.53 $
1.10 39.1 $
4.37 $
3.30 32.4
% %
Less: Income tax benefit (1) (0.14)
nm (0.14)
nm
Adjusted Earnings Per Share from Continuing Operations $
1.40 (2) $
1.10 27.3 $
4.23 $
3.30 28.2
% %
(1) This benefit relates to the final reconciliation of the income tax benefit related to the enactment of the 2017 U.S. Tax Cuts and Jobs Act.
(2) Earnings per share amounts may not sum due to rounding.
The following tables reconcile reported net income to earnings before interest, taxes, depreciation and amortization ("EBITDA") for the three and nine months ended September 30, 2018 and 2017:
Three Months Ended
September 30, 2018 vs. 2017
(Amounts in Millions) 2018 2017 Change % Change
Net Income $
130.1 $
94.3 $
35.8 38.0
%
Add: Depreciation 25.9 24.3 1.6 6.6
%
Other Interest Expense 28.3 27.8 0.5 1.8
%
Income Taxes 27.1 44.7 (17.6) (39.4)
%
(Income) from Discontinued Operations, net of tax (0.1) (0.1)
EBITDA $
211.3 $
191.0 $
20.3 10.6
%
Nine Months Ended
September 30, 2018 vs. 2017
(Amounts in Millions) 2018 2017 Change % Change
Net Income $
373.1 $
284.2 $
88.9 31.3
%
Add: Depreciation 77.2 70.0 7.2 10.3
%
Other Interest Expense 86.7 79.2 7.5 9.5
%
Income Taxes 104.7 136.0 (31.3) (23.0)
%
(Income) Loss from Discontinued Operations, net of tax (0.2) 0.3 (0.5)
nm
EBITDA $
641.5 $
569.7 $
71.8 12.6
%
nm - not meaningful
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SOURCE Penske Automotive Group, Inc.
