HOUSTON — Group 1 Automotive Inc. won't buy any dealerships this year, says CEO Earl Hesterberg.
"Right now we are all conserving cash because we just don't know how long this downturn is going to last," he says.
Group 1, of Houston, bought five dealerships in 2008. It operates 97 U.S. stores.
Group 1 wants to stay in compliance with agreements with lenders to maintain certain debt-to-income or debt-to-equity ratios, says Hesterberg.
The company reported a fourth-quarter net loss of $44.5 million after writing down the market value of its dealerships and other assets in a down market. Excluding the write-down, Group 1 posted a gross operating profit of $20.6 million in the quarter.
As a public company, Group 1 is held to stringent accounting practices, says Hesterberg. He says a private company would have more freedom to use its earnings for acquisitions. "But long term, having access to capital markets will probably be more advantageous than disadvantageous."