Group 1 Says It’s Returning to Growth
HOUSTON — Group 1 Automotive said it got back to "growth mode" in the final quarter of 2009, as the company reported a significant upswing in adjusted net income from continuing operations.
Specifically, the company's adjusted net income from continuing operations was $10.3 million in the fourth quarter, versus the adjusted $500,000 in the year-ago period.
Officials noted that the adjusted fourth quarter results do not include net after-tax losses of $12.2 million for non-cash asset impairment charges. These primarily dealt with real-estate holdings and a loss of a dealership disposition.
Meanwhile, adjusted results for the same quarter a year ago excluded $57.9 million in net after-tax charges consisting of non-cash impairment charges, which were partially countered by gain on debt redemptions.
So, unadjusted, there was a net loss of $2 million during the fourth quarter of 2009.
Continuing on, quarterly revenues were $1.15 billion, a 1.5-percent gain from the same period of 2008.
Same-store revenue improved 4.1 percent year-over-year, marking the first time since the third quarter of 2006 it has climbed.
Used-vehicle retail revenue was up 7 percent from the prior-year period, while new-car revenue jumped 0.6 percent. Used wholesale revenue moved ahead 1.7 percent, but service and parts revenue dipped 1.9 percent and F&I revenue softened 0.9 percent.
The company said its same-store gross margin during the fourth quarter was 16.5 percent, as margins for new vehicles, used vehicles, parts and service, and F&I all showed gains.
Moreover, Group 1 said it cut consolidated SG&A expenses by $5.6 million during the period.
Looking at full-year results, Group 1's net income from continuing operations was $34.8 million, compared to a loss of roughly $46 million for 2008. Officials said adjusted net income was $41.8 million, versus adjusted net income of $42.2 million in 2008.
With regards to its balance sheet, as of the end of the fourth quarter, the company has overall immediately available funds of $84.8 million and $243 million in overall available liquidity.
"Group 1 was profitable in perhaps the most challenging year automotive retailing has ever experienced," stated Earl Hesterberg, Group 1's president and chief executive officer. "These results, delivered in the sharpest automotive downturn in recent history, validate the resilience of the dealership model.
"The work we have done since 2006 to commonize systems, reduce overhead and further leverage the business, enabled us to navigate these challenging times and has us now solidly positioned to take full advantage of improvements in sales volumes as the recovery continues to unfold," he added.
Group 1 Names New Treasurer
In other news from the company, Group 1 announced that Michael Welch has been named the new treasurer. He previously was the company's director — operations controller, a position he was appointed to in August 2007 after working in various financial roles for the company.
Welch jointed Group 1 in 2000 after working at a public accounting firm for several years.
Among his duties are overseeing banking relationships, cash management, interest rate risk mitigation and risk management activities. Welch reports directly to senior vice president and chief financial officer John Rickel.
"Michael Welch has been an integral member of Group 1's financial team for nearly 10 years," Rickel noted. "Michael's outstanding analytical skills, extensive financial experience and deep understanding of the automotive retailing business, make him well prepared to assume the role of Group 1's treasurer."