Penske Automotive Reports Third Quarter Results
Thursday October 25, 7:01 am ET
Revenues Rise 15%; Same-Store Retail Revenues Increase 8.5%
SG&A as a Percentage of Gross Profit Improves 69 Basis Points
Income from Continuing Operations Per Share Increases 18% to $0.45 Per Share
BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)--Penske Automotive Group, Inc. (NYSE: PAG - News), an international automotive retailer, today reported that third quarter income from continuing operations increased 17.4% to $42.4 million and related earnings per share increased 18.4% to $0.45. Third quarter net income increased 28.7% to $43.4 million and related earnings per share increased 27.8% to $0.46. Revenues in the third quarter increased 14.6% to $3.4 billion, with each area of the Companys business experiencing double digit growth. Same-store retail revenues increased 8.5%, including a 14.0% increase from the Companys premium brand portfolio. The components of the same-store increase were as follows:
-- New Vehicles +7.4%
-- Used Vehicles +11.8%
-- Finance & Insurance +10.6%
-- Service & Parts +6.8%
"Our business performed exceptionally well during the third quarter said Penske Automotive Group Chairman Roger Penske. PAGs performance in the third quarter further supports the geographic diversification, brand mix and investment strategies which differentiate our overall business model. While I am happy with our 15% growth in total revenues and the robust same-store growth of 8.5% posted by our dealerships, I am particularly pleased to see that our selling, general and administrative expenses as a percentage of gross profit declined 69 basis points compared to the third quarter last year.
For the nine months ended September 30, 2007, revenues increased 18.3% to $9.9 billion. Income from continuing operations and related earnings per share for the nine months were $97.4 million and $1.03, respectively. Adjusted to exclude the $12.3 million ($0.13 per share) of after-tax costs resulting from the March 2007 redemption of the Companys 9.625% Senior Subordinated Notes, income from continuing operations for the nine months increased 11.6% to $109.7 million and related earnings per share increased 10.5% to $1.16. Net income and related earnings per share for the nine months were $98.3 million and $1.04, respectively. Adjusted for the debt redemption charge, net income increased 17.2% to $110.6, and related earnings per share increased 17.0% to $1.17.
The Company currently projects earnings from continuing operations in the fourth quarter to be in the range of $0.31 to $0.35 per share. Excluding the $12.3 million ($0.13 per share) debt redemption charge, earnings from continuing operations for the year are now expected to be in the range of $1.47 to $1.51 per share. These estimates include costs associated with developing the distribution network for the smart® product launch in the U.S. and are based on an estimated average of 94.6 million shares outstanding.
Penske Automotive will host a conference call discussing financial results relating to the third quarter of 2007 on Thursday, October 25, 2007 at 2:30 p.m. EDT. To listen to the conference call, participants must dial (800) 288-8976 [International, please dial (612) 332-0718]. The call will be simultaneously broadcast over the Internet through the Penske Automotive Group website at www.penskeautomotive.com.
About Penske Automotive
Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 307 retail automotive franchises, representing 40 different brands, and 26 collision repair centers. Penske Automotive, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 164 franchises in 19 states and Puerto Rico and 143 franchises located outside the United States, primarily in the United Kingdom. Penske Automotive is a member of the Fortune 500 and Russell 1000 and has approximately 16,000 employees.
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, including external factors such as interest rate fluctuations, changes in consumer spending and other factors over which management has no control. These forward-looking statements should be evaluated together with additional information about Penske Automotives business, markets, conditions and other uncertainties which could affect Penske Automotives future performance. These risks and uncertainties are addressed in Penske Automotives Form 10-K for the year ended December 31, 2006, and its other filings with the Securities and Exchange Commission (SEC). This press release speaks only as of its date, and Penske Automotive disclaims any duty to update the information herein.
This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations and related earnings per share, which exclude certain items disclosed in the release. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure and the period-to-period comparability of the Company's results from operations.