AutoNation Inc.'s adjusted net income from continuing operations soared on higher finance and insurance and new-vehicle gross profits, as the auto retail giant said it has a new chairman and has exited its holdings in online retailer Vroom Inc.
The nation's largest new-vehicle retailer said it has elected Rick Burdick, 69, a board member since 1991 and lead independent director since late 2018, as chairman of the board. The company said as part of its succession planning and previously announced strategy to separate the chairman and CEO roles that Burdick succeeds Jackson in the chairman role, effective Feb. 15. Jackson, 72, was chairman for 18 years. He remains CEO of AutoNation and a board member.
AutoNation said last year that it plans to name a new CEO in early 2022, at which point Jackson would retire.
Jackson told investors and analysts in a call Tuesday that AutoNation in 2019 said it would split the role of chairman and CEO with his departure. He said the board met Feb. 15 and has “taken the step of going ahead and doing that” and elected Burdick as chairman.
“So this gives a lot, [it] should give everyone a lot of confidence and trust that we have the right way forward,” Jackson said. “We have someone from within the company assuming this responsibility.”
Jackson said Burdick will lead the search for a new CEO and that the search will begin in the spring.
AutoNation, which in October 2018 had invested $50 million in Vroom, disclosed on Tuesday as part of its fourth-quarter earnings that during the quarter it sold 3.1 million shares in Vroom for $105 million and a cash gain of $78 million. And in the first quarter, it sold its remaining stake in the startup for $109 million, netting a cash gain of $87 million.
Fourth-quarter revenue climbed 4.3 percent to $5.79 billion. Net income slipped 3.9 percent to $151.5 million.
The retailer's $152 million in net income from continuing operations was dinged by a $62 million after-tax, noncash accounting loss related to its investment in Vroom. Its fourth-quarter 2019 net income from continuing operations of $158 million included $20 million in after-tax gains from store and property sales and a $19 million after-tax gain in its stake in Vroom.
The company said its adjusted net income from continuing operations climbed 88 percent to $213.1 million.
As part of its expansion of AutoNation USA stores, which sell used cars only, the company said it plans to open five locations this year and 10 new stores in 2022. It said stores to open by the end of 2021 include two stores in the Denver market and one each in Phoenix, Austin and San Antonio.