USA: Group 1 Automotive posts increase in revenues for Q1 2003
Group 1 Automotive, Inc., a specialty retailer, today reported more than $1.0 billion in revenues and an 11.8 percent increase in gross profit for the first quarter ended March 31, 2003.
The company reported diluted earnings per share of $0.64 for the quarter, equal to the record first quarter of 2002.
"This quarter's performance demonstrates the flexibility of our business model," said B.B. Hollingsworth Jr., Group 1's chairman, president and chief executive officer. "We dealt with the uncertainty of the marketplace and delivered solid financial performance."
For the first quarter ended March 31, 2003, revenues grew 8.8 percent to $1.0 billion from $946.1 million during the same period last year. As the overall automobile market declined, same store revenues fell 7.8 percent, compared with a 0.4 percent decline in the first quarter of 2002. Revenues contributed by dealerships acquired during 2002 and 2003 offset the decline.
New vehicle retail sales expanded 7.5 percent, on a unit sales increase of 6.8 percent. Used vehicle retail sales rose 3.3 percent, with retail unit sales 0.9 percent higher. Parts and service and finance and insurance revenues grew 21.2 percent and 17.8 percent, respectively.
Gross margin for the quarter increased to 16.5 percent compared with 16.0 percent during the year-ago period, as revenues increased in each category and the Company benefited from rapid growth in its higher-margin businesses -- parts and service and finance and insurance. Income from operations was $31.4 million versus $31.8 million, a 1.4 percent decrease. Operating margin was 3.0 percent compared with 3.4 percent during the year-ago period.
Net income decreased 4.4 percent to $14.8 million from $15.5 million, and diluted average shares outstanding decreased 4.7 percent to 23.0 million. This resulted in diluted earnings per share of $0.64 for the first quarter of 2003 which is consistent with the same period last year.
"This performance, during a less vigorous economic period, keeps us on track to achieve our goal of growing earnings per share for the sixth consecutive year," said Hollingsworth, who noted that from a brand standpoint Toyota/Lexus and Honda were among the strongest performers. "We had an outstanding performance from our Los Angeles platform, acquired in the third quarter last year," he added.
"We expect a solid vehicle market in 2003, although volatile at times and less robust than 2002. Earnings growth is expected to emanate from a combination of acquisitions and improved dealership performance, as well as common stock repurchases, as warranted," commented Hollingsworth.