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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 17, 2000
GROUP 1 AUTOMOTIVE, INC.
(Exact name of Registrant as specified in its charter)
Delaware 76-0506313
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
950 Echo Lane, Suite 100
Houston, Texas 77024
(Address of principal executive offices) (Zip code)
(713) 647-5700
(Registrant's telephone number including area code)
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ITEM 5. OTHER EVENTS
On February 17, 2000, Group 1 Automotive, Inc., a Delaware corporation
(the "Company"), announced its financial results for the three months and twelve
months ended December 31, 1999. On February 17, 2000, the Company issued a press
release relating to such financial results. A copy of the press release is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
ITEM 7. EXHIBITS
(c) 99.1 Press Release of Group 1 Automotive, Inc., dated as of
February 17, 2000, reporting on financial results.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Group 1 Automotive, Inc.
March 10, 2000 By: /s/ Scott L. Thompson
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Date Scott L. Thompson, Senior Vice President, Chief
Financial Officer and Treasurer
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NEWS BULLETIN GROUP 1 AUTOMOTIVE INC
From:
The Financial Relations Board Inc 950 Echo Lane, Suite 100 Houston, TX 77024
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AT GROUP 1: Chairman, President and CEO B. B. Hollingsworth, Jr. (713) 647-5700
Sr. VP, CFO and Treasurer Scott L. Thompson (713) 647-5700
AT FRB: General Inquiries Marilyn Windsor (312) 640-6692
Analyst Inquiries Bill Schmidle (312) 640-6753
Media Inquiries Bob Schwaller (972) 450-6562
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FOR IMMEDIATE RELEASE
THURSDAY, FEBRUARY 17, 2000
GROUP 1 POSTS DOUBLE-DIGIT GAINS IN REVENUES, EARNINGS FOR 1999 FOURTH
QUARTER, FULL YEAR
Highlights:
. Q4 DILUTED EPS UP 21% TO $0.35; 1999 DILUTED EPS $1.55, A 34% INCREASE
. NET INCOME UP 40% FOR Q4, 62% FOR YEAR
. FULL-YEAR REVENUES TOP $2.5 BILLION
. GROSS AND OPERATING MARGINS CONTINUE TO EXPAND
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Summary Results of Operations (Unaudited)
(In millions, except per share amounts)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
----------------------------------- -------------------------------------
1999 1998 1999 1998
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REVENUES $691.8 $472.5 $2,508.3 $1,630.1
GROSS PROFIT $101.4 $ 69.2 $ 376.4 $ 236.5
INCOME FROM OPERATIONS $ 21.9 $ 14.4 $ 86.0 $ 52.0
NET INCOME $ 7.7 $ 5.5 $ 33.5 $ 20.7
DILUTED EARNINGS PER SHARE $ 0.35 $ 0.29 $ 1.55 $ 1.16
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HOUSTON, February 17, 2000--Group 1 Automotive, Inc. (NYSE: GPI), a leading
operator in the highly fragmented automotive retailing industry, today reported
double-digit gains in revenues, operating income and net income for the fourth
quarter and year ended December 31, 1999. Revenue growth in all categories and
continued improvement in operating margins drove the company's strong
performance.
ENHANCED MARGINS, STRONG NEW VEHICLE MARKET, ACQUISITIONS BOOST EARNINGS
For the fourth quarter ended December 31, 1999, revenues grew 46 percent to
$691.8 million from $472.5 million for the same period last year. Net income
increased 40 percent to $7.7 million from $5.5 million, while earnings per
diluted share grew 21 percent to $0.35 from $0.29 a year ago. Cash flow per
share (net income plus depreciation and amortization) increased to $0.49 from
$0.40 in the 1998 period. The
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Group 1 Automotive
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increases in earnings and cash flow per share were achieved despite being
calculated on 22.2 million shares compared with 19.0 million shares last year, a
17 percent higher number of shares outstanding.
Gross margin for the quarter was 14.7 percent compared with 14.6 percent during
the year-ago period. Income from operations rose to $21.9 million from $14.4
million, a 52 percent increase, resulting in the operating margin expanding to
3.2 percent from 3.0 percent in last year's period. Group 1 has achieved year-
over-year improvements in operating margin since going public.
"I am pleased to announce another exceptionally strong quarter," said B.B.
Hollingsworth Jr., Group 1's chairman, president and chief executive officer.
"Our dealerships, including those acquired during the year, turned in solid
performances. We benefited from a record-setting new vehicle market and synergy
from the successful execution of our acquisition and operating strategies."
Hollingsworth noted that strong vehicle sales for the quarter were driven by
modest new vehicle price increases, innovative new products and continued high
consumer confidence.
1999 EARNINGS GROWTH OUTPACES REVENUE INCREASE
For the year, revenues increased 54 percent to $2.5 billion from $1.6 billion in
1998. Net income increased 62 percent to $33.5 million, or $1.55 per diluted
share, compared with $20.7 million, or $1.16 per diluted share. Cash flow per
share was $2.05 compared with $1.52. Per-share amounts for the 1999 period were
calculated on 21.6 million shares compared with 17.9 million shares last year.
Gross margin for 1999 was 15.0 percent compared with 14.5 percent a year ago.
Income from operations rose 65 percent to $86.0 million from $52.0 million. The
operating margin expanded to 3.4 percent from 3.2 percent last year.
"We are very proud of our achievements," Hollingsworth noted. "Our operating
leverage has been significant and demonstrates that we have been successful in
integrating our acquisitions. We have proven that select acquisitions executed
under a disciplined strategy can produce earnings growth."
RECENT ACQUISITIONS EXPECTED TO CONTRIBUTE TO 2000 RESULTS
Group 1 recently announced that it had completed six acquisitions, including
platforms in three new markets. Hollingsworth confirmed that the company would
continue to seek acquisitions that enhance brand and geographic diversity, as
well as provide synergy and add value. According to Hollingsworth, Group 1's
target is to acquire approximately $600 million in revenues during 2000. The
company has already completed transactions with $290 million in revenues during
2000.
Group 1 is a leading operator in the highly fragmented $600 billion automotive
retailing industry. The company has an annualized revenue run rate of over $3.4
billion, and owns 98 dealership franchises comprised of 30 different brands, and
19 collision service centers located in Texas, Oklahoma, Florida, New Mexico,
Colorado, Georgia, Louisiana and Massachusetts. Through its dealerships and
Internet sites, the company sells new and used cars and light trucks, provides
maintenance and repair services, sells replacement parts and arranges related
financing, vehicle service and insurance contracts.
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This press release contains certain forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934,
which are subject to known and unknown risks, uncertainties or other factors not
under Group 1's control that may cause the actual results, performance or
achievements of Group 1 to be materially different from the results, performance
or other expectations implied by these forward-looking statements. Some of
these risks, uncertainties and other factors include those disclosed in Group
1's filings with the Securities and Exchange Commission.
FOR ADDITIONAL INFORMATION REGARDING GROUP 1 AUTOMOTIVE FREE OF CHARGE VIA FAX,
DIAL 1-800-PRO-INFO AND USE THE COMPANY'S STOCK SYMBOL, "GPI."
GROUP 1 AUTOMOTIVE, INC. CAN BE REACHED ON THE INTERNET AT www.group1auto.com
FINANCIAL TABLES TO FOLLOW...
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GROUP 1 AUTOMOTIVE, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)
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THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
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1999 1998 1999 1998
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REVENUES:
New vehicles $ 414,988 $ 268,883 $ 1,465,759 $ 931,205
Used vehicles 196,409 147,097 750,807 510,192
Parts & service 59,510 41,879 212,970 139,144
Other dealership revenue, net 20,877 14,683 78,788 49,516
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Total revenues 691,784 472,542 2,508,324 1,630,057
COST OF SALES:
New vehicles 380,891 247,191 1,344,120 857,109
Used vehicles 182,644 136,730 691,499 471,910
Parts & service 26,837 19,448 96,348 64,528
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Total cost of sales 590,372 403,369 2,131,967 1,393,547
Gross Profit 101,412 69,173 376,357 236,510
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
76,334 52,756 279,791 178,038
DEPRECIATION EXPENSE 1,456 1,133 4,853 3,783
AMORTIZATION EXPENSE 1,735 918 5,763 2,643
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Income from operations 21,887 14,366 85,950 52,046
OTHER INCOME (EXPENSE):
Floorplan interest expense (6,772) (3,842) (20,395) (12,837)
Other interest expense, net (2,347) (1,322) (10,052) (4,027)
Other income (expense), net (23) 46 186 39
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INCOME BEFORE INCOME TAXES 12,745 9,248 55,689 35,221
PROVISION FOR INCOME TAXES 5,082 3,779 22,174 14,502
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NET INCOME $ 7,663 $ 5,469 $ 33,515 $ 20,719
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Basic earnings per share $ 0.36 $ 0.30 $ 1.62 $ 1.20
Diluted earnings per share $ 0.35 $ 0.29 $ 1.55 $ 1.16
Diluted cash flow per share $ 0.49 $ 0.40 $ 2.05 $ 1.52
Weighted average shares outstanding:
Basic 21,574,440 18,242,118 20,683,308 17,281,165
Diluted 22,150,246 18,992,225 21,558,920 17,904,878
OTHER DATA:
Gross margin 14.7% 14.6% 15.0% 14.5%
Operating margin 3.2% 3.0% 3.4% 3.2%
Pretax income margin 1.8% 2.0% 2.2% 2.2%
Retail new vehicles sold 16,755 11,182 60,384 39,822
Retail used vehicles sold 11,504 8,817 45,630 31,248
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Total retail sales 28,259 19,999 106,014 71,070
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GROUP 1 AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
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DECEMBER 31, DECEMBER 31,
1999 1998
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(UNAUDITED) (AUDITED)
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ASSETS
Current assets:
Cash and cash equivalents $ 118,824 $ 66,443
Inventories, net 386,255 219,176
Other assets, net 48,344 41,303
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Total current assets 553,423 326,922
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Property and equipment, net 46,711 21,960
Goodwill, net 235,312 123,587
Other assets 7,464 5,241
Total assets $ 842,910 $ 477,710
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Floorplan notes payable $ 363,489 $ 193,405
Other interest-bearing liabilities 1,076 2,966
Accounts payable and accrued expenses 108,730 82,300
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Total current liabilities 473,295 278,671
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Debt 113,174 42,821
Other liabilities 24,412 20,034
Total stockholders' equity 232,029 136,184
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Total liabilities and stockholders' equity $ 842,910 $ 477,710
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OTHER DATA:
Working capital $ 80,128 $ 48,251
Current ratio 1.17 1.17
Long-term debt to capitalization 33% 25%
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