AutoNation Reports All-Time Record Quarterly EPS From Continuing Operations

Automotive retailer AutoNation, Inc. reported on April 25 2012 first quarter net income from continuing operations of $74 million, or $0.56 per share, compared to net income from continuing operations of $70 million, or $0.46 per share, for the same period in the prior year, a twenty-two percent improvement on a per-share basis.

2012 first quarter revenue totaled $3.7 billion, compared to $3.3 billion in the year-ago period, an increase of ten percent, driven primarily by stronger retail new vehicle unit sales. AutoNation's new vehicle unit sales increased eight percent on a same store basis and ten percent overall. According to CNW Research data, total U.S. industry retail new vehicle unit sales increased seven percent.

2012 first quarter gross profit totaled $603 million, compared to $566 million in the year-ago period, an increase of six percent, primarily due to an increase in finance and insurance gross profit, as well as an increase in retail new vehicle gross profit. In the first quarter of 2011, gross profit was favorably impacted by $4.6 million, or $82 on a per new vehicle retailed basis, related to additional incentives on premium luxury vehicles previously sold.

Mike Jackson, Chairman and Chief Executive Officer, said, "The renaissance in auto retail is well underway, reflected in a seasonally adjusted U.S. industry annual selling rate of 14.5 million units for the first quarter of 2012. The American consumer has more choices than ever with improved fuel efficiency, better technology, and accelerated product offerings. We have increased our 2012 U.S. industry new vehicle sales forecast to mid-14 million units, as we see continued momentum in U.S. auto sales."

During the first quarter of 2012, the retailer repurchased 11.7 million shares of common stock, or nine percent of the shares outstanding as of December 31, 2011, for an aggregate purchase price of $405.4 million, and, from April 1 through April 24, 2012, the company repurchased 2.1 million shares for an aggregate purchase price of $70.8 million. As of April 24, 2012, there were approximately 122 million shares outstanding.

AutoNation has three operating segments: Domestic, Import, and Premium Luxury. The Domestic segment is comprised of stores that sell vehicles manufactured by General Motors, Ford, and Chrysler; the Import(2) segment is comprised of stores that sell vehicles manufactured primarily by Toyota, Honda, and Nissan; and the Premium Luxury(2) segment is comprised of stores that sell vehicles manufactured primarily by Mercedes, BMW, and Lexus. Segment results for the first quarter of 2012 were as follows:

Domestic - Domestic segment income(3) was $50 million compared to year-ago segment income of $43 million. First quarter Domestic retail new vehicle unit sales increased sixteen percent
Import - Import segment income(3) was $62 million compared to year-ago segment income of $55 million. First quarter Import retail new vehicle unit sales increased six percent
Premium Luxury - Premium Luxury segment income(3) was $59 million compared to year-ago segment income of $58 million. First quarter Premium Luxury retail new vehicle unit sales increased fourteen percent

(1) As compared to adjusted EPS from continuing operations in prior periods.
(2) As of March 31, 2012, the basis of segment reporting for our Import and Premium Luxury segments was revised to reclassify five Audi franchises from the Import segment to the Premium Luxury segment. In connection with this change, historical amounts were reclassified to conform to current segment presentation.
(3) Segment income is defined as operating income less floorplan interest expense.

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