Penske Automotive Reports All Time Record Results

Rhea-AI Summary

Penske Automotive Group (NYSE:PAG) reported record results in Q3 2020, highlighted by income from continuing operations of $246.5 million, or $3.07 per share, up 112% year-over-year. Revenue was flat at $6 billion, while SG&A expenses decreased significantly, improving efficiency. The company eliminated $125-150 million in costs and repaid $300 million in long-term debt. Retail automotive same-store revenue grew 3.6%. However, total revenue for the nine months fell 15% to $14.6 billion. The board reinstated a cash dividend of $0.42 per share, payable December 1, 2020.

Positive

• Record Q3 income from continuing operations of $246.5 million, up 112% YoY.
• Earnings per share rose to $3.07, a 116% increase.
• Significant reduction in SG&A expenses, down 1,010 basis points as a percentage of gross profit.
• Eliminated $125-150 million in annualized costs through operational efficiencies.
• Strong cash flow allowed for debt repayment, reducing future interest expense by $17 million.
• Reinstated cash dividend of $0.42 per share.

Negative

• Revenue for the nine months ended September 30 dropped 15% to $14.6 billion.
• Same-store retail automotive revenue declined slightly despite Q3 growth.

BLOOMFIELD HILLS, Mich., Oct. 22, 2020 /PRNewswire/ -- 

"I am very pleased to report all time record results for Penske Automotive Group in the third quarter. These results were primarily driven by same-store retail automotive revenue

and margin expansion, coupled with expense reductions which contributed to a 1,010 basis points decline in selling, general and administrative expenses ("SG&A") as a percent of gross profit."

Roger Penske, Chair and Chief Executive Officer

Financial Summary

For the Three Months Ended September 30, 2020

For the Nine Months Ended September 30, 2020

Actual

Change

Adjusted

Change

Actual

Change

Adjusted

Change

Net Revenues ($ in billions)

$        6.0

0%

$      14.6

-15%

Earnings Before Taxes ($ in millions)

$    311.6

+97%

$    444.3

-2%

Income From Continuing Operations ($ in millions)

$       247

+112%

$       231

+99%

$       343

+3%

$       328

-2%

Earnings Per Share

$      3.07

+116%

$      2.87

+102%

$      4.27

+6%

$      4.08

+2%

Gross Profit/Margin

+10%

+140 bps

-12%

+60 bps

Penske Automotive Group, Inc. (NYSE:PAG), a diversified international transportation services company, today announced record results for the third quarter, including the most profitable quarter in company history. For the three months ended September 30, 2020, the company reported income from continuing operations attributable to common shareholders of $246.5 million, or $3.07 per share, compared to $116.1 million, or $1.42 per share in the prior year. Foreign exchange positively impacted earnings per share by $0.05. Revenue was flat at $6 billion. Third quarter income from continuing operations and related earnings per share include a net income tax benefit of $15.4 million, or $0.19 per share, from various U.S. and foreign tax legislation changes. Excluding this net benefit, adjusted income from continuing operations increased 99.1% to $231.1 million, and related earnings per share increased 102.1% to $2.87.

Commenting on the company's results, Chairman Roger Penske said, "I am very pleased to report all time record results for Penske Automotive Group in the third quarter. These results were primarily driven by same-store retail automotive revenue and margin expansion, coupled with expense reductions which contributed to a 1,010 basis points decline in selling, general and administrative expenses ("SG&A") as a percent of gross profit. Through our cost cutting efforts, we estimate that approximately $125-150 million in annualized costs were eliminated across our various businesses." Penske continued, "I am particularly pleased that our strong cash flow has allowed us to significantly reduce long-term debt, lengthen maturities and reduce future annual interest expense by an estimated $17 million."

For the nine months ended September 30, 2020, the company reported income from continuing operations attributable to common shareholders of $343.1 million, or $4.27 per share, compared to $333.9 million, or $4.02 per share in the prior year. Foreign exchange positively impacted earnings per share by $0.01. Revenue was $14.6 billion compared to $17.3 billion in the same period last year. Excluding the tax benefit discussed above, adjusted income from continuing operations decreased 1.9% to $327.7 million, and related earnings per share increased 1.5% to $4.08.

Operational Highlights – Third Quarter 2020

• Retail automotive same-store revenue increased 3.6%
• Retail automotive earnings before taxes increased 170%
• Retail automotive same-store variable gross profit per unit retailed increased 29%
• Retail automotive same-store service and parts gross margin increased 250 basis points
• Total gross margin increased 140 basis points to 16.0%
• SG&A expenses declined $29 million and SG&A to gross profit declined 1,010 basis points to 67.3%

Long-Term Debt

During the third quarter of 2020, the company repaid in full our $300 million 3.75% senior subordinated notes at scheduled maturity using availability under our U.S. revolving credit facility. Additionally, during the quarter we issued $550 million in senior subordinated notes at 3.5% due 2025. The proceeds of these notes were used to redeem our $550 million in aggregate principal amount of 5.75% senior subordinated notes due 2022 on October 1^st. In the interim, we utilized the proceeds from the new 3.5% senior subordinated notes to temporarily pay down floorplan, U.S. revolver and mortgage revolver balances.

Used Vehicle SuperCenters

Penske Automotive Group operates sixteen Used Vehicle SuperCenters. For the three months ended September 30, 2020, profitability more than tripled to $16.0 million compared to $4.8 million last year driven by a 36% increase in same-store variable gross profit per unit retailed. Retail unit sales decreased by 6.9% to 18,372 while revenue increased by 7.6% to $352.5 million. For the nine months ended September 30, 2020, SuperCenter retail unit sales decreased by 25.7% to 41,284 and revenue decreased by 17.1% to $790.5 million. We expect to open two additional Used Vehicle SuperCenters in the next 90 days and have four additional sites under development which would increase the current footprint of SuperCenters by 40%.

Retail Commercial Truck Dealerships

Penske Automotive Group operates twenty-five medium and heavy-duty truck dealership locations in the U.S. and Canada offering primarily Freightliner and Western Star brands. For the three months ended September 30, 2020, earnings before taxes were $23.4 million compared to $30.7 million in the same period last year. Total units retailed declined 5.3% and revenue declined 14.6%. On a same-store basis new units declined 15.5% compared to North American Class 6-8 retail sales which declined 31.0% during the period. Same-store revenue declined 4.5%. For the nine months ended September 30, 2020, earnings before taxes were $51.7 million compared to $65.5 million in the same period last year. Total units retailed increased 6.9%, and revenue increased 2.1%. On a same-store basis new units retailed declined 25.9% and same-store revenue declined 16.9%.

Penske Transportation Solutions

Penske Transportation Solutions ("PTS"), is a leading provider of full-service truck leasing, truck rental, contract maintenance, and logistics services and is an integral part of the North American supply chain, providing supply chain and transportation services to its customers. The company has a 28.9% ownership interest in the PTS partnership and accounts for its ownership interest using the equity method of accounting. In addition to equity income, the company receives cash distributions and may recognize cash tax benefits from time to time. For the three and nine months ended September 30, 2020, the company recorded $64.5 million and $108.0 million in earnings compared to $42.2 million and $106.0 million for the same period last year. The 53% increase in the third quarter was principally driven by improved operating results in full-service leasing and logistics and a reduction in operating expenses.

Dividend and Share Repurchases

On October 14, 2020, we announced the reinstatement of our cash dividend in the amount of $0.42 per share payable December 1, 2020 to shareholders of record as of November 10, 2020.

For the nine months ended September 30, 2020, the company repurchased 1,027,736 shares for $34.4 million. Approximately $170.6 million remains available to repurchase shares under the company's existing share repurchase authorization.

Conference Call

Penske Automotive Group will host a conference call discussing financial results relating to the third quarter of 2020 on Thursday, October 22, 2020, at 2:00 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial (866) 394-1455 – [International, please dial (516) 575-8644] using access code 6795577. The call will also be simultaneously broadcast over the Internet through the Investor's section of the Penske Automotive Group website. Additionally, an investor presentation relating to the third quarter 2020 financial results has been posted to the company's website. To access the presentation or to listen to the company's webcast, please refer to www.penskeautomotive.com.

About Penske Automotive

Penske Automotive Group, Inc., (NYSE:PAG) headquartered in Bloomfield Hills, Michigan, is an international transportation services company that operates automotive and commercial truck dealerships principally in the United States, the United Kingdom, Canada, and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. PAG is a member of the Fortune 500 and Russell 1000 and 3000 indexes and is ranked among the World's Most Admired Companies by Fortune Magazine. For additional information, visit the company's website at www.penskeautomotive.com.

Non-GAAP Financial Measures

This release contains certain non-GAAP financial measures as defined under SEC rules, such as earnings before interest, taxes, depreciation, amortization ("EBITDA"). The company has reconciled these measures to the most  directly comparable GAAP measures in the release. The company believes that these widely accepted measures of operating profitability improve the transparency of the company's disclosures and provide a meaningful presentation of the company's results from its core business operations excluding the impact of items not related to the company's ongoing core business operations, and improve the period-to-period comparability of the company's results from its core business operations. These non-GAAP financial measures are not substitutes for GAAP financial results and should only be considered in conjunction with the company's financial information that is presented in accordance with GAAP.

Caution Concerning Forward Looking Statements

Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s liquidity and assessment of business conditions in light of the COVID-19 pandemic. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others: the duration, severity and resolution of the COVID-19 pandemic, government imposed restrictions on our business in light of COVID-19 or otherwise, economic conditions generally, conditions in the credit markets, changes in interest rates and foreign currency exchange rates, changes in tariff rates, adverse impacts related to the outcome of the United Kingdom's departure from the European Union, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to limited vehicle availability due to the COVID-19 pandemic, Worldwide Light Vehicle Testing Protocol ("WLTP") and Real Driving Emissions ("RDE"), natural disasters, recall or other disruptions that interrupt the supply of vehicles or parts to us, changes in consumer credit availability, the outcome of legal and administrative matters, and other factors over which management has limited control. These forward-looking statements should be evaluated together with additional information about Penske Automotive Group's business, markets, conditions, and other uncertainties, which could affect Penske Automotive Group's future performance. These risks and uncertainties are addressed in Penske Automotive Group's Form 10-K for the year ended December 31, 2019 and its other filings with the Securities and Exchange Commission ("SEC"). This press release speaks only as of its date, and Penske Automotive Group disclaims any duty to update the information herein.

Inquiries should contact:

J.D. Carlson	Anthony R. Pordon
Executive Vice President and	Executive Vice President Investor Relations
Chief Financial Officer	and Corporate Development
Penske Automotive Group, Inc.	Penske Automotive Group, Inc.
248-648-2810	248-648-2540
jcarlson@penskeautomotive.com	tpordon@penskeautomotive.com

 

PENSKE AUTOMOTIVE GROUP, INC. Consolidated Condensed Statements of Income (Amounts In Millions, Except Per Share Data) (Unaudited)
		Three Months Ended										Nine Months Ended
		September 30,										September 30,
		2020			2019			Change				2020			2019			Change
Revenue		$	5,971.6		$	5,967.6		0.1	%			$	14,631.8		$	17,287.8		(15.4)	%
Cost of Sales			5,015.1			5,097.9		(1.6)	%				12,345.7			14,698.8		(16.0)	%
Gross Profit		$	956.5		$	869.7		10.0	%			$	2,286.1		$	2,589.0		(11.7)	%
SG&A Expenses			643.3			672.8		(4.4)	%				1,738.7			2,008.1		(13.4)	%
Depreciation			29.0			27.5		5.5	%				85.4			81.0		5.4	%
Operating Income		$	284.2		$	169.4		67.8	%			$	462.0		$	499.9		(7.6)	%
Floor Plan Interest Expense			(8.0)			(21.4)		(62.6)	%				(37.4)			(64.2)		(41.7)	%
Other Interest Expense			(30.8)			(32.9)		(6.4)	%				(90.9)			(93.2)		(2.5)	%
Equity in Earnings of Affiliates			66.2			43.3		52.9	%				110.6			109.6		0.9	%
Income from Continuing Operations Before Income Taxes		$	311.6		$	158.4		96.7	%			$	444.3		$	452.1		(1.7)	%
Income Taxes			(64.1)			(42.4)		51.2	%				(100.7)			(118.6)		(15.1)	%
Income from Continuing Operations		$	247.5		$	116.0		113.4	%			$	343.6		$	333.5		3.0	%
Income from Discontinued Operations, net of tax			0.1			0.1		nm					0.3			0.3		nm
Net Income		$	247.6		$	116.1		113.3	%			$	343.9		$	333.8		3.0	%
Less: Income (Loss) Attributable to Non-Controlling Interests			1.0			(0.1)		nm					0.5			(0.4)		nm
Net Income Attributable to Common Shareholders		$	246.6		$	116.2		112.2	%			$	343.4		$	334.2		2.8	%
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations		$	247.5		$	116.0		113.4	%			$	343.6		$	333.5		3.0	%
Less: Income (Loss) Attributable to Non-Controlling Interests			1.0			(0.1)		nm					0.5			(0.4)		nm
Income from Continuing Operations, net of tax		$	246.5		$	116.1		112.3	%			$	343.1		$	333.9		2.8	%
Income from Discontinued Operations, net of tax			0.1			0.1		nm					0.3			0.3		nm
Net Income Attributable to Common Shareholders		$	246.6		$	116.2		112.2	%			$	343.4		$	334.2		2.8	%
Income from Continuing Operations Per Share		$	3.07		$	1.42		116.2	%			$	4.27		$	4.02		6.2	%
Income Per Share		$	3.07		$	1.42		116.2	%			$	4.27		$	4.03		6.0	%
Weighted Average Shares Outstanding			80.4			81.7		(1.6)	%				80.4			83.0		(3.1)	%
nm – not meaningful

 

PENSKE AUTOMOTIVE GROUP, INC. Consolidated Condensed Balance Sheets (Amounts In Millions) (Unaudited)
		September 30,			December 31,
		2020			2019
Assets:
Cash and Cash Equivalents		$	92.7		$	28.1
Accounts Receivable, Net			848.2			960.3
Inventories			3,209.7			4,260.7
Other Current Assets			198.8			85.0
Total Current Assets			4,349.4			5,334.1
Property and Equipment, Net			2,337.9			2,366.4
Operating Lease Right-of-Use Assets			2,378.7			2,360.5
Intangibles			2,455.5			2,463.2
Other Long-Term Assets			1,488.2			1,418.5
Total Assets		$	13,009.7		$	13,942.7
Liabilities and Equity:
Floor Plan Notes Payable		$	1,484.0		$	2,412.5
Floor Plan Notes Payable – Non-Trade			1,046.4			1,594.0
Accounts Payable			717.2			638.8
Accrued Expenses and Other Current Liabilities			774.8			701.9
Current Portion Long-Term Debt			85.6			103.3
Liabilities Held for Sale			0.5			0.5
Total Current Liabilities			4,108.5			5,451.0
Long-Term Debt			2,216.1			2,257.0
Long-Term Operating Lease Liabilities			2,319.3			2,301.2
Other Long-Term Liabilities			1,282.3			1,121.9
Total Liabilities			9,926.2			11,131.1
Equity			3,083.5			2,811.6
Total Liabilities and Equity		$	13,009.7		$	13,942.7
Supplemental Balance Sheet Information
New vehicle days' supply			45			71
Used vehicle days' supply			40			52

 

 

PENSKE AUTOMOTIVE GROUP, INC. Consolidated Statements of Cash Flow Amounts in Millions (Unaudited)
		Nine Months Ended
		September 30,
		2020			2019
Operating Activities:
Net income		$	343.9		$	333.8
Adjustments to reconcile net income to net cash from continuing operating activities:
Depreciation			85.4			81.0
Earnings of equity method investments			(88.9)			(77.8)
Income from discontinued operations, net of tax			(0.3)			(0.3)
Deferred income taxes			177.6			48.2
Changes in operating assets and liabilities:
Accounts receivable			112.2			(38.0)
Inventories			1,043.5			119.9
Floor plan notes payable			(925.9)			108.7
Accounts payable and accrued expenses			172.1			128.6
Other			(70.1)			(43.3)
Net cash provided by continuing operating activities			849.5			660.8
Investing Activities:
Purchase of equipment and improvements			(114.3)			(188.8)
Proceeds from sale of dealerships			10.3			7.3
Proceeds from sale-leaseback transactions			—			7.3
Proceeds from sale of equipment and improvements			19.8			5.1
Acquisitions net, including repayment of sellers' floor plan notes payable of $0 and $138.5, respectively			—			(326.9)
Other			(4.4)			(7.4)
Net cash used in continuing investing activities			(88.6)			(503.4)
Financing Activities:
Proceeds from borrowings under U.S. credit agreement revolving credit line			956.0			1,458.0
Repayments under U.S. credit agreement revolving credit line			(1,001.0)			(1,383.0)
Issuance of 3.50% senior subordinated notes			550.0			—
Repayment of 3.75% senior subordinated notes			(300.0)			—
Net (repayments) borrowings of other long-term debt			(253.7)			95.3
Net repayments of floor plan notes payable — non-trade			(547.6)			(18.0)
Cash paid for seller financing			(31.6)			—
Repurchases of common stock			(29.4)			(174.1)
Dividends			(34.2)			(97.3)
Payment of deferred financing fees			(7.8)			—
Other			(5.0)			0.1
Net cash used in continuing financing activities			(704.3)			(119.0)
Discontinued operations:
Net cash provided by discontinued operating activities			0.2			0.2
Net cash provided by discontinued investing activities			—			—
Net cash provided by discontinued financing activities			—			—
Net cash provided by discontinued operations			0.2			0.2
Effect of exchange rate changes on cash and cash equivalents			7.8			(0.5)
Net change in cash and cash equivalents			64.6			38.1
Cash and cash equivalents, beginning of period			28.1			39.4
Cash and cash equivalents, end of period		$	92.7		$	77.5
Supplemental disclosures of cash flow information:
Cash paid for:
Interest		$	106.7		$	139.6
Income taxes			32.1			69.8
Non cash activities:
Contingent consideration		$	—			10.6

 

 

PENSKE AUTOMOTIVE GROUP, INC. Consolidated Operations Selected Data (Unaudited)
		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2020			2019			2020			2019
Geographic Revenue Mix:
North America			56.5	%		61.8	%		59.9	%		58.3	%
U.K.			35.3	%		31.2	%		31.5	%		33.7	%
Other International			8.2	%		7.0	%		8.6	%		8.0	%
Total			100.0	%		100.0	%		100.0	%		100.0	%
Revenue: (Amounts in Millions)
Retail Automotive		$	5,258.0		$	5,155.4		$	12,828.1		$	15,442.9
Retail Commercial Trucks			590.9			692.3			1,481.5			1,451.4
Commercial Vehicles Australia/Power Systems and Other			122.7			119.9			322.2			393.5
Total		$	5,971.6		$	5,967.6		$	14,631.8		$	17,287.8
Gross Profit: (Amounts in Millions)
Retail Automotive		$	849.7		$	747.5		$	1,994.1		$	2,283.9
Retail Commercial Trucks			73.1			86.6			202.1			199.5
Commercial Vehicles Australia/Power Systems and Other			33.7			35.6			89.9			105.6
Total		$	956.5		$	869.7		$	2,286.1		$	2,589.0
Gross Margin:
Retail Automotive			16.2	%		14.5	%		15.5	%		14.8	%
Retail Commercial Trucks			12.4	%		12.5	%		13.6	%		13.7	%
Commercial Vehicles Australia/Power Systems and Other			27.5	%		29.7	%		27.9	%		26.8	%
Total			16.0	%		14.6	%		15.6	%		15.0	%

 

		Three Months Ended					Nine Months Ended
		September 30,					September 30,
		2020		2019			2020		2019
Operating Items as a Percentage of Revenue:
Gross Profit		16.0	%	14.6	%		15.6	%	15.0	%
Selling, General and Administrative Expenses		10.8	%	11.3	%		11.9	%	11.6	%
Operating Income		4.8	%	2.8	%		3.2	%	2.9	%
Income from Continuing Operations Before Income Taxes		5.2	%	2.7	%		3.0	%	2.6	%
Operating Items as a Percentage of Total Gross Profit:
Selling, General and Administrative Expenses		67.3	%	77.4	%		76.1	%	77.6	%
Operating Income		29.7	%	19.5	%		20.2	%	19.3	%

 

 

		Three Months Ended							Nine Months Ended
		September 30,							September 30,
(Amounts in Millions)		2020			2019				2020			2019
EBITDA (1)		$	371.4		$	218.8			$	620.6		$	626.3
Floorplan Credits		$	10.3		$	9.7			$	27.3		$	27.3
Rent Expense		$	58.7		$	58.3			$	173.1		$	173.4
Stock Repurchases		$	0.2		$	43.6			$	34.4		$	174.1
(1)  See the following Non-GAAP reconciliation table.

PENSKE AUTOMOTIVE GROUP, INC. Retail Automotive Operations Selected Data – Revenue and Gross Profit Mix (Unaudited)
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2020		2019		2020		2019
Retail Automotive Revenue Mix:
Premium:
BMW / MINI		23	%	24	%	22	%	23	%
Audi		13	%	11	%	13	%	12	%
Mercedes-Benz		10	%	10	%	10	%	10	%
Land Rover / Jaguar		9	%	8	%	9	%	9	%
Porsche		7	%	6	%	7	%	6	%
Ferrari / Maserati		2	%	2	%	3	%	3	%
Lexus		3	%	3	%	3	%	3	%
Acura		1	%	1	%	1	%	1	%
Bentley		1	%	1	%	1	%	1	%
Others		2	%	2	%	2	%	2	%
Total Premium		71	%	68	%	71	%	70	%
Volume Non-U.S.:
Toyota		10	%	11	%	10	%	10	%
Honda		6	%	7	%	6	%	6	%
Volkswagen		2	%	4	%	3	%	4	%
Nissan		1	%	1	%	1	%	1	%
Others		2	%	2	%	2	%	2	%
Total Volume Non-U.S.		21	%	25	%	22	%	23	%
U.S.:
General Motors / Chrysler / Ford		1	%	1	%	1	%	1	%
Stand-Alone Used		7	%	6	%	6	%	6	%
Total		100	%	100	%	100	%	100	%
Retail Automotive Geographic Revenue Mix:
U.S.		53	%	58	%	57	%	56	%
U.K.		40	%	36	%	36	%	38	%
Other International		7	%	6	%	7	%	6	%
Total		100	%	100	%	100	%	100	%
Retail Automotive Geographic Gross Profit Mix:
U.S.		59	%	63	%	63	%	61	%
U.K.		35	%	32	%	32	%	34	%
Other International		6	%	5	%	5	%	5	%
Total		100	%	100	%	100	%	100	%

 

 

 

PENSKE AUTOMOTIVE GROUP, INC. Retail Automotive Operations (Unaudited)
		Three Months Ended										Nine Months Ended
		September 30,										September 30,
		2020			2019			Change				2020			2019			Change
Retail Automotive Units:
New Retail			52,522			57,214		(8.2)	%				126,396			166,730		(24.2)	%
Used Retail			70,800			74,096		(4.4)	%				176,456			218,906		(19.4)	%
Total			123,322			131,310		(6.1)	%				302,852			385,636		(21.5)	%
Retail Automotive Revenue: (Amounts in Millions)
New Vehicles		$	2,350.6		$	2,332.3		0.8	%			$	5,599.8		$	6,873.9		(18.5)	%
Used Vehicles			1,954.1			1,824.5		7.1	%				4,739.8			5,529.2		(14.3)	%
Finance and Insurance, Net			174.4			166.0		5.1	%				415.8			491.5		(15.4)	%
Service and Parts			521.8			543.5		(4.0)	%				1,380.3			1,654.0		(16.5)	%
Fleet and Wholesale			257.1			289.1		(11.1)	%				692.4			894.3		(22.6)	%
Total Revenue		$	5,258.0		$	5,155.4		2.0	%			$	12,828.1		$	15,442.9		(16.9)	%
Retail Automotive Gross Profit: (Amounts in Millions)
New Vehicles		$	192.8		$	164.3		17.3	%			$	437.6		$	511.8		(14.5)	%
Used Vehicles			143.3			89.7		59.8	%				284.9			284.2		0.2	%
Finance and Insurance, Net			174.4			166.0		5.1	%				415.8			491.5		(15.4)	%
Service and Parts			322.0			321.7		0.1	%				827.0			981.4		(15.7)	%
Fleet and Wholesale			17.2			5.8		196.6	%				28.8			15.0		92.0	%
Total Gross Profit		$	849.7		$	747.5		13.7	%			$	1,994.1		$	2,283.9		(12.7)	%
Retail Automotive Revenue Per Vehicle Retailed:
New Vehicles		$	44,754		$	40,764		9.8	%			$	44,303		$	41,227		7.5	%
Used Vehicles			27,601			24,623		12.1	%				26,861			25,258		6.3	%
Retail Automotive Gross Profit Per Vehicle Retailed:
New Vehicles		$	3,670		$	2,871		27.8	%			$	3,462		$	3,069		12.8	%
Used Vehicles			2,024			1,210		67.3	%				1,615			1,298		24.4	%
Finance and Insurance			1,414			1,264		11.9	%				1,373			1,275		7.7	%
Retail Automotive Gross Margin:
New Vehicles			8.2	%		7.0	%	+120	bps				7.8	%		7.4	%	+40	bps
Used Vehicles			7.3	%		4.9	%	+240	bps				6.0	%		5.1	%	+90	bps
Service and Parts			61.7	%		59.2	%	+250	bps				59.9	%		59.3	%	+60	bps
Fleet and Wholesale			6.7	%		2.0	%	+470	bps				4.2	%		1.7	%	+250	bps
Total Gross Margin			16.2	%		14.5	%	+170	bps				15.5	%		14.8	%	+70	bps
Retail Automotive Revenue Mix Percentages:
New Vehicles			44.7	%		45.2	%	-50	bps				43.7	%		44.5	%	-80	bps
Used Vehicles			37.2	%		35.4	%	+180	bps				36.9	%		35.8	%	+110	bps
Finance and Insurance, Net			3.3	%		3.2	%	+10	bps				3.2	%		3.2	%	---	bps
Service and Parts			9.9	%		10.5	%	-60	bps				10.8	%		10.7	%	+10	bps
Fleet and Wholesale			4.9	%		5.7	%	-80	bps				5.4	%		5.8	%	-40	bps
Total			100.0	%		100.0	%						100.0	%		100.0	%
Retail Automotive Gross Profit Mix Percentages:
New Vehicles			22.7	%		22.0	%	+70	bps				21.9	%		22.4	%	-50	bps
Used Vehicles			16.9	%		12.0	%	+490	bps				14.3	%		12.4	%	+190	bps
Finance and Insurance, Net			20.5	%		22.2	%	-170	bps				20.9	%		21.5	%	-60	bps
Service and Parts			37.9	%		43.0	%	-510	bps				41.5	%		43.0	%	-150	bps
Fleet and Wholesale			2.0	%		0.8	%	+120	bps				1.4	%		0.7	%	+70	bps
Total			100.0	%		100.0	%						100.0	%		100.0	%

 

 

PENSKE AUTOMOTIVE GROUP, INC. Retail Automotive Operations Same-Store (Unaudited)
		Three Months Ended										Nine Months Ended
		September 30,										September 30,
		2020			2019			Change				2020			2019			Change
Retail Automotive Same-Store Units:
New Retail			52,502			55,752		(5.8)	%				126,298			161,575		(21.8)	%
Used Retail			69,766			72,336		(3.6)	%				173,104			212,535		(18.6)	%
Total			122,268			128,088		(4.5)	%				299,402			374,110		(20.0)	%
Retail Automotive Same-Store Revenue: (Amounts in Millions)
New Vehicles		$	2,349.8		$	2,288.1		2.7	%			$	5,596.3		$	6,720.4		(16.7)	%
Used Vehicles			1,938.2			1,788.0		8.4	%				4,681.8			5,391.9		(13.2)	%
Finance and Insurance, Net			173.1			163.5		5.9	%				411.9			482.6		(14.6)	%
Service and Parts			521.5			534.1		(2.4)	%				1,378.4			1,619.1		(14.9)	%
Fleet and Wholesale			255.6			283.6		(9.9)	%				680.7			871.2		(21.9)	%
Total Revenue		$	5,238.2		$	5,057.3		3.6	%			$	12,749.1		$	15,085.2		(15.5)	%
Retail Automotive Same-Store Gross Profit: (Amounts in Millions)
New Vehicles		$	192.7		$	160.6		20.0	%			$	437.4		$	498.7		(12.3)	%
Used Vehicles			142.3			88.5		60.8	%				281.9			281.6		0.1	%
Finance and Insurance, Net			173.1			163.5		5.9	%				411.9			482.6		(14.6)	%
Service and Parts			321.8			316.0		1.8	%				825.1			960.5		(14.1)	%
Fleet and Wholesale			17.2			5.8		196.6	%				28.1			15.2		84.9	%
Total Gross Profit		$	847.1		$	734.4		15.3	%			$	1,984.4		$	2,238.6		(11.4)	%
Retail Automotive Same-Store Revenue Per Vehicle Retailed:
New Vehicles		$	44,757		$	41,040		9.1	%			$	44,310		$	41,593		6.5	%
Used Vehicles			27,782			24,717		12.4	%				27,046			25,369		6.6	%
Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:
New Vehicles		$	3,670		$	2,881		27.4	%			$	3,463		$	3,086		12.2	%
Used Vehicles			2,040			1,224		66.7	%				1,628			1,325		22.9	%
Finance and Insurance			1,416			1,277		10.9	%				1,376			1,290		6.7	%
Retail Automotive Same-Store Gross Margin:
New Vehicles			8.2	%		7.0	%	+120	bps				7.8	%		7.4	%	+40	bps
Used Vehicles			7.3	%		4.9	%	+240	bps				6.0	%		5.2	%	+80	bps
Service and Parts			61.7	%		59.2	%	+250	bps				59.9	%		59.3	%	+60	bps
Fleet and Wholesale			6.7	%		2.0	%	+470	bps				4.1	%		1.7	%	+240	bps
Total Gross Margin			16.2	%		14.5	%	+170	bps				15.6	%		14.8	%	+80	bps
Retail Automotive Revenue Mix Percentages:
New Vehicles			44.9	%		45.2	%	-30	bps				43.9	%		44.5	%	-60	bps
Used Vehicles			37.0	%		35.4	%	+160	bps				36.7	%		35.7	%	+100	bps
Finance and Insurance, Net			3.3	%		3.2	%	+10	bps				3.2	%		3.2	%	---	bps
Service and Parts			10.0	%		10.6	%	-60	bps				10.8	%		10.7	%	+10	bps
Fleet and Wholesale			4.8	%		5.6	%	-80	bps				5.4	%		5.9	%	-50	bps
Total			100.0	%		100.0	%						100.0	%		100.0	%
Retail Automotive Gross Profit Mix Percentages:
New Vehicles			22.7	%		21.9	%	+80	bps				22.0	%		22.3	%	-30	bps
Used Vehicles			16.8	%		12.1	%	+470	bps				14.2	%		12.6	%	+160	bps
Finance and Insurance, Net			20.4	%		22.3	%	-190	bps				20.8	%		21.6	%	-80	bps
Service and Parts			38.0	%		43.0	%	-500	bps				41.6	%		42.9	%	-130	bps
Fleet and Wholesale			2.1	%		0.7	%	+140	bps				1.4	%		0.6	%	+80	bps
Total			100.0	%		100.0	%						100.0	%		100.0	%

 

 

PENSKE AUTOMOTIVE GROUP, INC. Retail Commercial Truck Operations (Unaudited)
		Three Months Ended										Nine Months Ended
		September 30,										September 30,
		2020			2019			Change				2020			2019			Change
Retail Commercial Truck Units:
New Retail			3,196			4,154		(23.1)	%				8,070			8,688		(7.1)	%
Used Retail			1,284			578		122.1	%				2,755			1,435		92.0	%
Total			4,480			4,732		(5.3)	%				10,825			10,123		6.9	%
Retail Commercial Truck Revenue: (Amounts in Millions)
New Vehicles		$	376.6		$	476.2		(20.9)	%			$	930.4		$	979.6		(5.0)	%
Used Vehicles			63.9			36.1		77.0	%				135.4			87.8		54.2	%
Finance and Insurance, Net			4.1			3.1		32.3	%				10.5			9.0		16.7	%
Service and Parts			122.1			154.6		(21.0)	%				358.1			340.7		5.1	%
Wholesale and Other			24.2			22.3		8.5	%				47.1			34.3		37.3	%
Total Revenue		$	590.9		$	692.3		(14.6)	%			$	1,481.5		$	1,451.4		2.1	%
Retail Commercial Truck Gross Profit: (Amounts in Millions)
New Vehicles		$	12.3		$	21.8		(43.6)	%			$	34.4		$	43.8		(21.5)	%
Used Vehicles			0.8			3.3		(75.8)	%				(4.5)			8.9		(150.6)	%
Finance and Insurance, Net			4.1			3.1		32.3	%				10.5			9.0		16.7	%
Service and Parts			52.9			55.2		(4.2)	%				155.4			128.6		20.8	%
Wholesale and Other			3.0			3.2		(6.3)					6.3			9.2		(31.5)
Total Gross Profit		$	73.1		$	86.6		(15.6)	%			$	202.1		$	199.5		1.3	%
Retail Commercial Truck Revenue Per Vehicle Retailed:
New Vehicles		$	117,825		$	114,636		2.8	%			$	115,286		$	112,746		2.3	%
Used Vehicles			49,735			62,460		(20.4)	%				49,141			61,248		(19.8)	%
Retail Commercial Truck Gross Profit Per Vehicle Retailed:
New Vehicles		$	3,856		$	5,244		(26.5)	%			$	4,265		$	5,038		(15.3)	%
Used Vehicles			626			5,684		(89.0)	%				(1,645)			6,211		(126.5)	%
Finance and Insurance			923			658		40.3	%				973			888		9.6	%
Retail Commercial Truck Gross Margin:
New Vehicles			3.3	%		4.6	%	-130	bps				3.7	%		4.5	%	-80	bps
Used Vehicles			1.3	%		9.1	%	-780	bps				(3.3)	%		10.1	%	-1,340	bps
Service and Parts			43.3	%		35.7	%	+760	bps				43.4	%		37.7	%	+570	bps
Total Gross Margin			12.4	%		12.5	%	-10	bps				13.6	%		13.7	%	-10	bps
Retail Commercial Truck Revenue Mix Percentages:
New Vehicles			63.7	%		68.8	%	-510	bps				62.8	%		67.5	%	-470	bps
Used Vehicles			10.8	%		5.2	%	+560	bps				9.1	%		6.0	%	+310	bps
Finance and Insurance, Net			0.7	%		0.4	%	+30	bps				0.7	%		0.6	%	+10	bps
Service and Parts			20.7	%		22.3	%	-160	bps				24.2	%		23.5	%	+70	bps
Wholesale and Other			4.1	%		3.3	%	+80	bps				3.2	%		2.4	%	+80	bps
Total			100.0	%		100.0	%						100.0	%		100.0	%
Retail Commercial Truck Gross Profit Mix Percentages:
New Vehicles			16.8	%		25.2	%	-840	bps				17.0	%		22.0	%	-500	bps
Used Vehicles			1.1	%		3.8	%	-270	bps				(2.2)	%		4.5	%	-670	bps
Finance and Insurance, Net			5.6	%		3.6	%	+200	bps				5.2	%		4.5	%	+70	bps
Service and Parts			72.4	%		63.7	%	+870	bps				76.9	%		64.5	%	+1,240	bps
Wholesale and Other			4.1	%		3.7	%	+40	bps				3.1	%		4.5	%	-140	bps
Total			100.0	%		100.0	%						100.0	%		100.0	%

 

 

 

PENSKE AUTOMOTIVE GROUP, INC. Retail Commercial Truck Operations Same-Store (Unaudited)
		Three Months Ended										Nine Months Ended
		September 30,										September 30,
		2020			2019			Change				2020			2019			Change
Retail Commercial Truck Same-Store Units:
New Retail			2,032			2,406		(15.5)	%				5,142			6,940		(25.9)	%
Used Retail			834			398		109.5	%				1,849			1,255		47.3	%
Total			2,866			2,804		2.2	%				6,991			8,195		(14.7)	%
Retail Commercial Truck Same-Store Revenue: (Amounts in Millions)
New Vehicles		$	240.1		$	269.3		(10.8)	%			$	595.3		$	772.6		(22.9)	%
Used Vehicles			41.9			24.9		68.3	%				91.1			76.7		18.8	%
Finance and Insurance, Net			3.2			2.5		28.0	%				8.0			8.4		(4.8)	%
Service and Parts			86.9			98.6		(11.9)	%				248.8			284.4		(12.5)	%
Wholesale and Other			10.1			5.0		102.0	%				20.0			16.9		18.3	%
Total Revenue		$	382.2		$	400.3		(4.5)	%			$	963.2		$	1,159.0		(16.9)	%
Retail Commercial Truck Same-Store Gross Profit: (Amounts in Millions)
New Vehicles		$	8.3		$	10.9		(23.9)	%			$	21.8		$	32.8		(33.5)	%
Used Vehicles			1.9			1.9		—	%				1.2			7.5		(84.0)	%
Finance and Insurance, Net			3.2			2.5		28.0	%				8.0			8.4		(4.8)	%
Service and Parts			35.3			39.1		(9.7)	%				100.7			112.4		(10.4)	%
Wholesale and Other			3.2			3.1		nm	%				12.4			9.0		37.8	%
Total Gross Profit		$	51.9		$	57.5		(9.7)	%			$	144.1		$	170.1		(15.3)	%
Retail Commercial Truck Same-Store Revenue Per Vehicle Retailed:
New Vehicles		$	118,167		$	111,913		5.6	%			$	115,765		$	111,326		4.0	%
Used Vehicles			50,229			62,674		(19.9)	%				49,270			61,142		(19.4)	%
Retail Commercial Truck Same-Store Gross Profit Per Vehicle Retailed:
New Vehicles		$	4,090		$	4,514		(9.4)	%			$	4,242		$	4,732		(10.4)	%
Used Vehicles			2,252			4,680		(51.9)	%				623			5,968		(89.6)	%
Finance and Insurance			1,116			902		23.7	%				1,145			1,025		11.7	%
Retail Commercial Truck Same-Store Gross Margin:
New Vehicles			3.5	%		4.0	%	-50	bps				3.7	%		4.2	%	-50	bps
Used Vehicles			4.5	%		7.6	%	-310	bps				1.3	%		9.8	%	-850	bps
Service and Parts			40.6	%		39.7	%	+90	bps				40.5	%		39.5	%	+100	bps
Total Gross Margin			13.6	%		14.4	%	-80	bps				15.0	%		14.7	%	+30	bps
Retail Commercial Truck Revenue Mix Percentages:
New Vehicles			62.8	%		67.3	%	-450	bps				61.8	%		66.7	%	-490	bps
Used Vehicles			11.0	%		6.2	%	+480	bps				9.5	%		6.6	%	+290	bps
Finance and Insurance, Net			0.8	%		0.6	%	+20	bps				0.8	%		0.7	%	+10	bps
Service and Parts			22.7	%		24.6	%	-190	bps				25.8	%		24.5	%	+130	bps
Wholesale and Other			2.7	%		1.3	%	+140	bps				2.1	%		1.5	%	+60	bps
Total			100.0	%		100.0	%						100.0	%		100.0	%
Retail Commercial Truck Gross Profit Mix Percentages:
New Vehicles			16.0	%		19.0	%	-300	bps				15.1	%		19.3	%	-420	bps
Used Vehicles			3.7	%		3.3	%	+40	bps				0.8	%		4.4	%	-360	bps
Finance and Insurance, Net			6.2	%		4.3	%	+190	bps				5.6	%		4.9	%	+70	bps
Service and Parts			68.0	%		68.0	%	---	bps				69.9	%		66.1	%	+380	bps
Wholesale and Other			6.1	%		5.4	%	+70	bps				8.6	%		5.3	%	+330	bps
Total			100.0	%		100.0	%						100.0	%		100.0	%

 

PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Non-GAAP Reconciliations
(Unaudited)

The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three and nine months ended September 30, 2020 and 2019:

 

Income from Continuing Operations:
		Three Months Ended										Nine Months Ended
(Amounts in Millions)		September 30,										September 30,
		2020				2019			% Change			2020				2019			% Change
Income from Continuing Operations		$	246.5			$	116.1		112.3	%		$	343.1			$	333.9		2.8	%
Less: Income tax benefit (1)			(15.4)				—		nm				(15.4)				—		nm
Adjusted Income from Continuing Operations		$	231.1			$	116.1		99.1	%		$	327.7			$	333.9		(1.9)	%

 

Earnings Per Share:
		Three Months Ended										Nine Months Ended
		September 30,										September 30,
		2020				2019			% Change			2020				2019			% Change
Earnings Per Share from Continuing Operations		$	3.07			$	1.42		116.2	%		$	4.27			$	4.02		6.2	%
Less: Income tax benefit (1)			(0.19)				—		nm				(0.19)				—		nm
Adjusted Earnings Per Share from Continuing Operations		$	2.87	(2)		$	1.42		102.1	%		$	4.08			$	4.02		1.5	%

(1)	During the third quarter of 2020, we recorded a net income tax benefit of $15.4 million, or $0.19 per share, from various U.S. and foreign tax legislation changes.
(2)	Earnings per share amounts may not sum due to rounding.

 

The following tables reconcile reported net income to earnings before interest, taxes, depreciation, and amortization ("EBITDA") for the three and nine months ended September 30, 2020 and 2019:

		Three Months Ended
		September 30,						2020 vs. 2019
(Amounts in Millions)		2020			2019			Change			% Change
Net Income		$	247.6		$	116.1		$	131.5		113.3	%
Add: Depreciation			29.0			27.5			1.5		5.5	%
Other Interest Expense			30.8			32.9			(2.1)		(6.4)	%
Income Taxes			64.1			42.4			21.7		51.2	%
Income from Discontinued Operations, net of tax			(0.1)			(0.1)			—		nm
EBITDA		$	371.4		$	218.8		$	152.6		69.7	%

 

		Nine Months Ended
		September 30,						2020 vs. 2019
(Amounts in Millions)		2020			2019			Change			% Change
Net Income		$	343.9		$	333.8		$	10.1		3.0	%
Add: Depreciation			85.4			81.0			4.4		5.4	%
Other Interest Expense			90.9			93.2			(2.3)		(2.5)	%
Income Taxes			100.7			118.6			(17.9)		(15.1)	%
Income from Discontinued Operations, net of tax			(0.3)			(0.3)			—		nm
EBITDA		$	620.6		$	626.3		$	(5.7)		(0.9)	%

nm – not meaningful

 

 

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SOURCE Penske Automotive Group, Inc.

FAQ

What were Penske Automotive Group's earnings in Q3 2020?

Penske Automotive Group reported earnings from continuing operations of $246.5 million, or $3.07 per share, in Q3 2020.

How did Penske Automotive Group perform compared to last year?

The company saw a 112% increase in income from continuing operations and a 116% increase in earnings per share year-over-year.

What was the revenue for Penske Automotive Group in Q3 2020?

Revenue for Q3 2020 was flat at $6 billion.

What dividend did Penske Automotive Group announce?

Penske Automotive Group reinstated a cash dividend of $0.42 per share payable on December 1, 2020.

How much did Penske Automotive Group reduce its SG&A expenses?

SG&A expenses declined by $29 million, a 1,010 basis point reduction as a percent of gross profit.