Penske Automotive Reports Most Profitable Year in Company History

Penske Automotive - New Car Networks

Article Courtesy of: Dealer Communications

BLOOMFIELD HILLS, Mich. — Penske Automotive Group, Inc. announced this week that fourth quarter 2011 income from continuing operations attributable to common shareholders increased 22% to $42.5 million and related earnings per share increased 24% to $0.47 per share.

This compares to income from continuing operations attributable to common shareholders of $34.9 million, or $0.38 per share in the same period last year.

Fourth Quarter 2011

  • Revenue Increases 11% to $3.0 Billion
  • Same-store Retail Revenue Increases 5.9%
  • Operating Income Increases 16% to $76.6 mil
  • Income from Continuing Operations Increases 22% to $42.5 Million
  • EPS from Continuing Operations Increases 24% to $0.47 per share
  • EBITDA Increases 16% to $89.7 Million

Full Year 2011

  • Revenue Increases 12% to $11.6 Billion
  • Same-store Retail Revenue Increases 8.2%
  • Operating Income Increases 15% to $298.2 mil
  • Income from Continuing Operations Increases 42% to $175.1 Million
  • EPS from Continuing Operations Increases 43% to $1.92 per share
  • EBITDA Increases 17% to $344.0 Million

Total revenue increased by 10.8%, to $3.0 billion, driven largely by an increase in total retail unit sales of 10.6%. The increase in retail unit sales was highlighted by a 20.0% increase in used retail unit sales, which drove the Company’s used-to-new ratio to 0.82 to 1. Same-store retail revenue increased 5.9% in the fourth quarter. Total gross profit for the Company improved 9.3% to $455.8 million and operating income increased 16.1% to $76.6 million.

Highlights of the Fourth Quarter

Total retail unit sales increased 10.6% to 71,453

  • +14.1% in the United States; +2.6% Internationally
  • New unit retail sales +4.0%
  • Used unit retail sales +20.0%

Same-store retail revenue increased 5.9%

  • New +2.7%; Used +14.1%; Finance & Insurance +11.4%; Service and Parts +0.7%
  • +9.3% in the United States; (0.1%) Internationally

Average Transaction Price Per Unit

  • New $38,816, +4.4%
  • Used $26,034, (1.3%)

Average Gross Profit Per Unit

  • New $3,251, +2.8%; Gross Margin 8.4%
  • Used $1,852, (2.6%); Gross Margin 7.1%
  • Finance & Insurance $965, +3.8%

Inventory Days’ Supply

  • New 49 days; Used 52 days

Chairman Roger Penske said, “Our fourth quarter results continue to demonstrate the strength of the automotive retail model and the benefit from our premium/luxury brand mix in both the U.S. and international markets. We produced another outstanding quarter of profitability while generating same-store revenue increases in each area of our business. I am extremely pleased with the continued strong performance of our used vehicle business, which increased same-store retail unit sales by 16% and same-store retail revenue by 14%, and our service and parts operations gross margin which added 120 basis points to 57.3%.”

For the year ended December 31, 2011, total revenue increased 11.9% to $11.6 billion. Income from continuing operations attributable to common shareholders was an all-time company record, increasing 41.7% to $175.1 million and related earnings per share increased 43.3% to $1.92. This compares to income from continuing operations attributable to common shareholders of $123.6 million, and related earnings per share of $1.34 per share in the same period last year. During 2011, the Company recognized a net income tax benefit of $11.0 million, or $0.12 per share, reflecting a positive adjustment from the resolution of certain tax items in the U.K. of $17.0 million, or $0.19 per share, partially offset by a reduction in deferred tax assets of $6.0 million, or $0.07 per share. After adjusting for these items, adjusted income from continuing operations attributable to common shareholders was $164.0 million, or $1.80 per share, representing an increase of 34.3% on a per share basis compared to last year.

Penske added, “The performance of our business in 2011 exceeded our expectations.

We completed the most profitable year in the history of our Company, generating a same-store retail revenue increase of 8.2% and $344 million in EBITDA.

Further, we continued to grow the business through opportunistic acquisitions of approximately $1 billion in estimated annualized revenue, which includes the January 2012 Agnew Group acquisition in the U.K. We also discontinued non-strategic dealerships during 2011 with annualized revenues of approximately $300 million.

These acquisitions, coupled with the continued recovery in the retail automotive market, are expected to drive our business to higher levels in 2012.”

Article Courtesy of: Dealer Communications

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