<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER: 0-9787
REPUBLIC INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 73-1105145
(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NO.)
450 EAST LAS OLAS BOULEVARD
FT. LAUDERDALE, FLORIDA 33301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (954) 713-5200
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No[ ]
On August 11, 1997, the registrant had 385,021,207 outstanding shares
of common stock, par value $.01 per share.
<PAGE> 2
REPUBLIC INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
PAGE
----
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
Unaudited Condensed Consolidated Balance Sheets as
of June 30, 1997 and December 31, 1996 (Restated).......................... 3
Unaudited Condensed Consolidated Statements of Operations
for the Three and Six Months Ended June 30, 1997 and 1996 (Restated)...... 4
Unaudited Condensed Consolidated Statement of Shareholders'
Equity for the Six Months Ended June 30, 1997............................. 5
Unaudited Condensed Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 1997 and 1996 (Restated)................. 6
Notes to Unaudited Condensed Consolidated Financial Statements.............. 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................................. 16
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES....................................................... 25
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......................... 25
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................................ 26
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REPUBLIC INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---- ----
(Restated)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents....................................................... $ 130.1 $ 326.0
Receivables, net................................................................. 616.1 560.7
Revenue earning vehicles, net.................................................... 4,524.9 3,583.0
Inventory........................................................................ 758.2 310.3
Other current assets............................................................. 124.9 398.6
-------- --------
Total current assets......................................................... 6,154.2 5,178.6
Property and equipment, net......................................................... 1,758.0 1,113.9
Intangible assets, net.............................................................. 870.6 262.0
Investment in subscriber accounts, net.............................................. 120.3 92.4
Other assets........................................................................ 21.8 42.4
-------- --------
$8,924.9 $6,689.3
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................................. $ 241.3 $ 287.0
Accrued liabilities.............................................................. 405.0 224.7
Estimated liability insurance claims............................................. 209.0 208.1
Revenue earning vehicle debt..................................................... 3,212.6 2,535.6
Notes payable and current maturities of long-term debt........................... 344.0 306.5
Other current liabilities........................................................ 370.5 292.9
-------- --------
Total current liabilities.................................................... 4,782.4 3,854.8
Long-term debt, net of current maturities........................................... 240.8 371.7
Long-term revenue earning vehicle debt.............................................. 799.6 844.8
Other liabilities................................................................... 434.0 241.0
Commitments and contingencies
Shareholders' equity:
Preferred stock, par value $.01 per share;
5,000,000 shares authorized; none issued....................................... -- --
Common stock, par value $.01 per share; 1,500,000,000
and 500,000,000, shares authorized,
respectively; 373,614,443 and 308,619,292
shares issued and outstanding, respectively.................................... 3.7 3.1
Additional paid-in capital....................................................... 2,583.2 1,369.2
Retained earnings................................................................ 81.2 4.7
-------- --------
Total shareholders' equity............................................ 2,668.1 1,377.0
-------- --------
$8,924.9 $6,689.3
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
REPUBLIC INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ --------------------
1997 1996 1997 1996
---- ---- ---- ----
(Restated) (Restated)
<S> <C> <C> <C> <C>
Revenue:
Automotive sales.................................. $1,347.1 $ 637.9 $2,246.1 $1,168.9
Automotive rentals................................ 739.5 671.0 1,380.8 1,255.1
Solid waste services.............................. 263.0 170.3 466.2 307.1
Electronic security services...................... 28.0 22.1 54.6 37.6
-------- -------- -------- --------
2,377.6 1,501.3 4,147.7 2,768.7
Expenses:
Cost of automotive sales.......................... 1,204.6 571.8 1,998.5 1,036.3
Automotive rental operating expenses.............. 561.6 516.6 1,075.2 977.0
Cost of solid waste services...................... 193.5 118.9 341.6 216.3
Cost of electronic security services ............. 12.8 11.0 24.4 17.2
Selling, general and administrative............... 301.8 226.7 560.0 431.4
Restructuring and non-recurring
expenses...................................... 94.1 -- 94.1 --
-------- -------- -------- --------
Operating income...................................... 9.2 56.3 53.9 90.5
Interest income....................................... 3.8 6.9 11.2 12.0
Interest expense...................................... (5.9) (11.5) (9.4) (19.9)
Other income, net..................................... 102.3 2.9 105.8 6.0
-------- -------- -------- --------
Income before income taxes............................ 109.4 54.6 161.5 88.6
Provision for income taxes............................ 39.9 24.6 59.2 41.1
-------- -------- -------- --------
Net income............................................ $ 69.5 $ 30.0 $ 102.3 $ 47.5
======== ======== ======== ========
Net income per common and common
equivalent share.............................. $ .17 $ .09 $ .26 $ .15
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
REPUBLIC INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In millions)
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained
Stock Capital Earnings
------ ------- --------
<S> <C> <C> <C>
Balance at December 31, 1996 (Restated)...................... $3.1 $1,369.2 $ 4.7
Sale of common stock..................................... .2 552.5 --
Exercise of stock options and warrants................... -- 19.0 --
Stock issued in acquisitions............................. .4 610.3 --
Other.................................................... -- 32.2 (25.8)
Net income............................................... -- -- 102.3
---- -------- ------
Balance at June 30, 1997..................................... $3.7 $2,583.2 $ 81.2
==== ======== ======
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE> 6
REPUBLIC INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------------
1997 1996
---- ----
(Restated)
<S> <C> <C>
CASH PROVIDED BY OPERATING ACTIVITIES:
Net income................................................................ $ 102.3 $ 47.5
Adjustments to reconcile net income to net cash
provided by operating activities:
Restructuring and non-recurring expenses.............................. 94.1 --
Depreciation and amortization......................................... 455.8 383.0
Gain on sale of marketable securities................................. (102.3) --
Changes in assets and liabilities, net of effects
from business combinations:
Receivables....................................................... 53.8 25.4
Inventory......................................................... (66.6) 12.2
Other assets...................................................... 85.3 9.3
Accounts payable and accrued liabilities.......................... (115.0) 46.8
Other liabilities................................................. 68.1 66.9
--------- ---------
575.5 591.1
--------- ---------
CASH USED IN INVESTING ACTIVITIES:
Purchases of revenue earning vehicles..................................... (3,220.6) (2,879.5)
Sales of revenue earning vehicles......................................... 1,882.1 1,477.5
Purchases of property and equipment....................................... (255.5) (108.3)
Purchase of marketable securities......................................... (300.0) --
Sale of marketable securities............................................. 402.3 --
Cash used in business combinations........................................ (29.3) (16.9)
Other..................................................................... (78.3) (82.0)
--------- ---------
(1,599.3) (1,609.2)
--------- ---------
CASH PROVIDED BY FINANCING ACTIVITIES:
Payments of revenue earning vehicle financing............................. (7,488.6) (9,845.7)
Proceeds from revenue earning vehicle financing........................... 8,325.6 10,789.7
Payments of notes payable and long-term debt.............................. (2,869.5) (80.0)
Proceeds from notes payable and long-term debt............................ 2,323.7 148.0
Sale of common stock,,.................................................... 552.7 197.6
Exercise of stock options and warrants.................................... 19.0 5.6
Other..................................................................... (35.0) (28.6)
--------- ---------
827.9 1,186.6
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............................. (195.9) 168.5
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............................. 326.0 365.5
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................................... $ 130.1 $ 534.0
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE> 7
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(TABLES IN MILLIONS, EXCEPT PER SHARE DATA)
1. INTERIM FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements
include the accounts of Republic Industries, Inc. and its subsidiaries (the
"Company") and have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. All significant
intercompany accounts and transactions have been eliminated. Certain information
related to the Company's organization, significant accounting policies and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. These unaudited condensed consolidated financial statements reflect, in
the opinion of management, all material adjustments (which include only normal
recurring adjustments) necessary to fairly state the financial position and the
results of operations for the periods presented and the disclosures herein are
adequate to make the information presented not misleading. Operating results for
interim periods are not necessarily indicative of the results that can be
expected for a full year. These interim financial statements should be read in
conjunction with the Company's audited consolidated financial statements and
notes thereto.
In order to maintain consistency and comparability between periods
presented, certain amounts have been reclassified from the previously reported
financial statements in order to conform with the financial statement
presentation of the current period.
The accompanying financial statements also include the financial
position and results of operations of The Pierce Corporation ("Pierce"), which
the Company acquired in June 1997; Flemington Car and Truck Country and certain
related dealerships ("Flemington"), Spirit Rent-A-Car, Inc. ("Spirit"), Chesrown
Automotive Group ("Chesrown") and Bledsoe Dodge, Inc. ("Bledsoe"), all of which
the company acquired in May 1997; National Car Rental System, Inc. ("National"),
Maroone Automotive Group ("Maroone"), Wallace Automotive Group ("Wallace") and
Taormina Industries, Inc. ("Taormina"), all of which the Company acquired in
February 1997; and Carlisle Motors, Inc. ("Carlisle") which the Company acquired
in January 1997. These business combinations have been accounted for under the
pooling of interests method of accounting and, accordingly, the financial
statements and notes thereto for the periods prior to the acquisition dates have
been restated as if the Company and Pierce, Flemington, Spirit, Chesrown,
Bledsoe, National, Maroone, Wallace, Taormina and Carlisle had operated as one
entity since inception. See Note 2 for a further discussion of business
combinations.
2. BUSINESS COMBINATIONS
PENDING ACQUISITIONS
In August 1997, the Company announced an offer to acquire EuroDollar
Holdings plc ("EuroDollar"), which operates an automotive rental business
primarily in the United Kingdom. The Company will pay approximately $150.0
million in cash or notes in this transaction, which will be accounted for under
the purchase method of accounting. The closing of the transaction is subject to
customary conditions, including regulatory approval and approval by the
requisite number of EuroDollar shareholders.
In July 1997, the Company signed a definitive agreement to acquire
Dobbs Automotive Group ("Dobbs"), which owns and operates twenty franchised
automotive dealerships. The Company will issue shares of its common stock, par
value $.01 per share ("Common Stock"), valued at approximately $200.0 million in
this transaction which will be accounted for under the purchase method of
accounting. The closing of the transaction is subject to customary conditions,
including manufacturer and regulatory approvals.
In July 1997, the Company signed a definitive agreement to acquire the
Anderson Dealership Group ("Anderson"), which owns and operates nine franchised
automotive dealerships. The Company will issue Common Stock valued at
approximately $40.0 million in this transaction which will be accounted for
under the pooling of interests method of accounting. The closing of the
transaction is subject to customary conditions, including manufacturer and
regulatory approvals.
In July 1997, the Company signed a definitive agreement to acquire the
assets of Silver State Disposal Service, Inc. ("Silver State"), which provides
waste collection services. The Company will issue Common Stock valued at
approximately $378.0 million in this transaction which will be accounted for
under the pooling of interests method of accounting. The closing of the
transaction is subject to customary conditions, including regulatory approvals.
In June 1997, the Company signed a definitive agreement to acquire the
Appleway Automotive Group ("Appleway"), which owns and operates eight franchised
automotive dealerships. The Company will issue Common Stock valued at
approximately $42.6 million in this transaction, which will be accounted for
under the purchase method of accounting. The closing of the transaction is
subject to customary conditions, including manufacturer and regulatory
approvals.
7
<PAGE> 8
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
In May 1997, the Company signed a definitive agreement to acquire
Desert Buick-GMC Automotive Group ("Desert"), which owns and operates four
franchised automotive dealerships. The Company will issue Common Stock valued at
approximately $38.0 million in this transaction, which will be accounted for
under the pooling of interests method of accounting. The closing of the
transaction is subject to customary conditions, including manufacturer and
regulatory approvals.
In May 1997, the Company signed a definitive agreement to acquire Gulf
Management, Inc. ("Gulf"), which owns and operates two franchised automotive
dealerships. The Company will issue Common Stock valued at approximately $45.0
million in this transaction, which will be accounted for under the purchase
method of accounting. The closing of the transaction is subject to customary
conditions, including manufacturer and regulatory approvals.
Additionally, the Company has signed definitive agreements to acquire
various other businesses in the automotive retail and solid waste services
industries which are not material to the Company. The Company will issue Common
Stock and/or cash valued in the aggregate at approximately $50.6 million in such
transactions which will be accounted for under the purchase method of
accounting, and will issue Common Stock valued in the aggregate at approximately
$90.9 million in such transactions which will be accounted for under the pooling
of interests method of accounting. These transactions are subject to customary
conditions, including manufacturer and regulatory approvals, as applicable.
ACQUISITIONS COMPLETED SUBSEQUENT TO JUNE 30, 1997
In August 1997, the Company acquired Snappy Car Rental, Inc.
("Snappy"), which operates an automotive rental business. The Company issued
approximately 1.0 million shares of Common Stock in this transaction which has
been accounted for under the purchase method of accounting.
In July 1997, the Company acquired Value Rent-A-Car ("Value"), which
operates an automotive rental business. The Company issued approximately 3.4
million shares of Common Stock in this transaction which has been accounted for
under the purchase method of accounting.
In July 1997, the Company acquired Courtesy Auto Group ("Courtesy"),
which owns and operates eleven franchised automotive dealerships. The Company
issued approximately 1.4 million shares of Common Stock in this transaction
which has been accounted for under the purchase method of accounting.
In July 1997, the Company acquired De La Cruz Auto Group ("De La
Cruz"), which owns and operates four franchised automotive dealerships. The
Company issued approximately 1.8 million shares of Common Stock in this
transaction, which has been accounted for under the pooling of interests method
of accounting.
Additionally, subsequent to June 30, 1997, the Company has acquired
various other businesses in the automotive retail and solid waste services
industries which were not material to the Company. The Company issued an
aggregate of approximately 2.2 million shares of Common Stock and paid
approximately $45.7 million in cash in such transactions which have been
accounted for under the purchase method of accounting and issued an aggregate of
approximately .7 million shares in such transactions which have been accounted
for under the pooling of interests method of accounting.
ACQUISITIONS COMPLETED DURING THE SIX MONTHS ENDED JUNE 30, 1997
Significant businesses acquired through June 30, 1997 and accounted for
under the pooling of interests method of accounting have been included
retroactively in the financial statements as if the companies had operated as
one entity since inception. Businesses acquired through June 30, 1997 and
accounted for under the purchase method of accounting are included in the
financial statements from the date of acquisition.
In June 1997, the Company acquired Pierce which owns and operates one
franchised automotive dealership and two used automotive dealerships. The
Company issued approximately 2.3 million shares of Common Stock in this
transaction, which has been accounted for under the pooling of interests method
of accounting.
In May 1997, the Company acquired Flemington, which owns and operates
twenty-four franchised automotive dealerships. The Company issued approximately
2.3 million shares of Common Stock in this transaction, which has been accounted
for under the pooling of interests method of accounting.
8
<PAGE> 9
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
In May 1997, the Company acquired Spirit, which operates an automotive
rental business. The Company issued approximately 3.1 million shares of Common
Stock in this transaction, which has been accounted for under the pooling of
interests method of accounting.
In May 1997, the Company acquired Chesrown, which owns and operates
seven franchised automotive dealerships. The Company issued approximately 2.5
million shares of Common Stock in this transaction, which has been accounted for
under the pooling of interests method of accounting.
In May 1997, the Company acquired Bledsoe, which owns and operates
three franchised automotive dealerships. The Company issued approximately 1.7
million shares of Common Stock in this transaction, which has been accounted for
under the pooling of interests method of accounting.
In May 1997, the Company acquired Bankston Automotive Group
("Bankston"), which owns and operates four franchised automotive dealerships.
The Company issued approximately 1.4 million shares of Common Stock in this
transaction, which has been accounted for under the purchase method of
accounting.
In February 1997, the Company acquired National, which operates an
automotive rental business. The Company issued approximately 21.7 million shares
of Common Stock in this transaction, which has been accounted for under the
pooling of interests method of accounting.
In February 1997, the Company acquired Maroone, which owns and operates
seven franchised automotive dealerships. The Company issued approximately 6.1
million shares of Common Stock in this transaction, which has been accounted for
under the pooling of interests method of accounting.
In February 1997, the Company acquired Wallace, which owns and operates
six franchised automotive dealerships. The Company issued approximately 1.7
million shares of Common Stock in this transaction, which has been accounted for
under the pooling of interests method of accounting.
In February 1997, the Company acquired Taormina, which provides waste
collection services and owns and operates a materials recycling facility. The
Company issued approximately 7.4 million shares of Common Stock in this
transaction, which has been accounted for under the pooling of interests method
of accounting.
In February 1997, the Company acquired Kendall Automotive Group
("Kendall"), which owns and operates three franchised automotive dealerships.
The Company issued approximately 1.2 million shares of Common Stock in this
transaction, which has been accounted for under the purchase method of
accounting.
In January 1997, following approval by the Company's stockholders at a
special meeting, the Company acquired AutoNation Incorporated ("AutoNation"),
which is developing a chain of used vehicle megastores. The Company issued
approximately 17.5 million shares of Common Stock in this transaction, which has
been accounted for under the purchase method of accounting.
In January 1997, the Company acquired Carlisle which owns and operates
three franchised automotive dealerships. The Company issued approximately 1.0
million shares of Common Stock in this transaction, which has been accounted for
under the pooling of interests method of accounting.
In January 1997, the Company acquired Grubb Automotive ("Grubb"), which
owns and operates eight franchised automotive dealerships. The Company issued
approximately 4.0 million shares of Common Stock in this transaction, which has
been accounted for under the purchase method of accounting.
In January 1997, the Company acquired Ed Mullinax, Inc. and
subsidiaries ("Mullinax"), which owns and operates five franchised automotive
dealerships. The Company issued approximately 3.6 million shares of Common Stock
in this transaction, which has been accounted for under the purchase method of
accounting.
In addition, during the six months ended June 30, 1997, the Company
acquired various other businesses in the automotive retail, solid waste services
and electronic security services industries which were not material to the
Company. The Company issued an aggregate of approximately 6.4 million shares of
Common Stock and paid approximately $29.3 million of cash in such transactions
which have been accounted for under the purchase method of accounting, and
issued an aggregate of approximately 9.1 million shares of Common Stock in such
transactions which have been accounted for under the pooling
9
<PAGE> 10
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
of interests method of accounting. These acquisitions accounted for under the
pooling of interests method of accounting were not material in the aggregate
and, consequently, prior period financial statements were not restated for such
acquisitions.
Details of the results of operations of the Company and Pierce,
Flemington, Spirit, Chesrown, Bledsoe, National, Maroone, Wallace, Taormina and
Carlisle (the "Pooled Entities") for the periods before the pooling of interests
business combinations were consummated are as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------
1997 1996
---- ----
<S> <C> <C>
Revenue:
The Company......................................... $3,021.5 $1,031.5
Pooled Entities..................................... 1,126.2 1,737.2
-------- --------
$4,147.7 $2,768.7
======== ========
Net income:
The Company......................................... $ 71.0 $ 17.3
Pooled Entities..................................... 31.3 30.2
-------- --------
$ 102.3 $ 47.5
======== ========
</TABLE>
The following summarizes the preliminary purchase price allocations for
business combinations (including historical accounts of immaterial acquisitions
accounted for under the pooling of interests method of accounting) consummated
during the six months ended June 30:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Property and equipment.................................... $ 452.0 $117.5
Investment in subscriber accounts......................... 6.9 16.3
Intangible assets......................................... 606.2 79.1
Working capital (deficiency), net of cash acquired........ 75.6 (7.7)
Long-term debt assumed.................................... (454.7) (94.8)
Other liabilities, net.................................... (46.0) (12.5)
Common stock issued....................................... (610.7) (81.0)
------- ------
Cash used in business combinations........................ $ 29.3 $ 16.9
======= ======
</TABLE>
The Company's unaudited pro forma consolidated results of operations
assuming the acquisitions of Bankston, Kendall, AutoNation, Grubb and Mullinax,
all of which have been accounted for under the purchase method of accounting,
had occurred on January 1, 1996 are as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------
1997 1996
---- ----
<S> <C> <C>
Revenue.................................................... $4,360.5 $3,652.7
Net income................................................. $ 96.5 $ 50.6
Fully diluted net income per common and common
equivalent share......................................... $ .24 $ .15
</TABLE>
The unaudited pro forma results of operations are presented for
informational purposes only and may not necessarily reflect the future results
of operations of the Company or what the results of operations would have been
had the Company owned and operated these businesses as of January 1, 1996.
10
<PAGE> 11
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
3. RECEIVABLES
The components of receivables, net of allowance for doubtful accounts
are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------ ------
<S> <C> <C>
Trade................................................... $341.6 $295.2
Vehicle................................................. 153.0 227.2
Contracts in transit.................................... 69.3 28.9
Other................................................... 78.2 26.9
------ ------
642.1 578.2
Less: allowance for doubtful accounts................... (26.0) (17.5)
------ ------
$616.1 $560.7
====== ======
</TABLE>
4. REVENUE EARNING VEHICLES
Revenue earning vehicles consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- --------
<S> <C> <C>
Revenue earning vehicles................................ $4,958.3 $4,011.2
Less: accumulated depreciation.......................... (433.4) (428.2)
-------- --------
$4,524.9 $3,583.0
======== ========
</TABLE>
5. PROPERTY AND EQUIPMENT
A summary of property and equipment is shown below:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- --------
<S> <C> <C>
Land, landfills and improvements........................ $ 817.3 $ 510.2
Furniture, fixtures and equipment....................... 815.9 599.3
Buildings and improvements.............................. 621.9 416.6
-------- --------
2,255.1 1,526.1
Less: accumulated depreciation and depletion............ (497.1) (412.2)
-------- --------
$1,758.0 $1,113.9
======== ========
</TABLE>
6. INTANGIBLE ASSETS
Intangible assets consist primarily of the cost of acquired businesses
in excess of the fair value of net tangible assets acquired. The cost in excess
of the fair value of net tangible assets is amortized over forty years on a
straight-line basis.
Accumulated amortization of intangible assets at June 30, 1997 and
December 31, 1996 was $68.6 million and $47.6 million, respectively.
7. INVESTMENT IN SUBSCRIBER ACCOUNTS
Investment in subscriber accounts consists of capitalized costs
associated with new monitoring systems installed by the Company's electronic
security services business and the cost of acquired subscriber accounts. These
costs are amortized over ten years (based on historical customer attrition
rates) on a straight-line basis.
Accumulated amortization of investment in subscriber accounts at June
30, 1997 and December 31, 1996 was $33.5 million and $20.7 million,
respectively.
11
<PAGE> 12
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
8. REVENUE EARNING VEHICLE DEBT
Revenue earning vehicle debt consists of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- ------------
<S> <C> <C>
Amounts under $1.4 billion commercial paper
program terminating March 1998; secured by
eligible vehicle collateral; interest based on market
dictated commercial paper rates.............................. $1,394.5 $1,396.8
Amounts under $1.1 billion commercial paper program
terminating May 1998; secured by eligible vehicle
collateral; interest based on market dictated commercial
paper rates.................................................. 1,071.6 856.3
Medium term notes payable; secured by eligible vehicle
collateral; interest payable monthly at floating or
fixed rates; due 1999-2003................................... 799.6 799.6
Amounts under $500.0 million credit agreement
terminating September 1997; secured by eligible
vehicle collateral; interest based on LIBOR.................. 500.0 --
Amounts under various uncommitted revolving lease
facilities with financing institutions in the
United Kingdom; secured by eligible vehicle
collateral; interest based on prevailing market rates;
no stated expiration dates, reviewed annually................ 200.6 143.5
Other secured financings ...................................... 45.9 184.2
-------- --------
4,012.2 3,380.4
Less: long-term portion........................................ (799.6) (844.8)
-------- --------
$3,212.6 $2,535.6
======== ========
</TABLE>
9. LONG-TERM DEBT AND NOTES PAYABLE
Long-term debt and notes payable consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- ------------
<S> <C> <C>
$1.0 billion unsecured revolving credit facility; interest
payable monthly using either a competitive bid
feature or LIBOR based rate; matures 2002.................... $ 100.0 $ 150.0
Vehicle inventory credit facilities secured by the
Company's vehicle inventory; interest at
varying rates................................................ 305.9 225.7
Bonds payable under loan agreements with California
Pollution Control Financing Authority; interest at
prevailing market rates ..................................... 43.8 44.0
Other notes to banks and financial institutions at
varying rates; maturing through 2015......................... 135.1 258.5
-------- -------
584.8 678.2
Less: current maturities....................................... (344.0) (306.5)
-------- -------
$ 240.8 $ 371.7
======== =======
</TABLE>
12
<PAGE> 13
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
In April 1997, the Company replaced its existing $250.0 million credit
facility with a new $1.0 billion unsecured revolving credit facility (the
"Credit Facility") with certain banks for a term of five years. Outstanding
advances, if any, are payable at the expiration of the five year term. The
Credit Facility requires, among other items, that the Company maintain certain
financial ratios and comply with certain financial covenants. Interest is
determined using either a competitive bid feature or a LIBOR based rate.
10. ACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments as a tool to manage
the impact of interest rate changes on the Company's indebtedness. The Company
does not use derivative financial instruments for trading purposes. The Company
has entered into several interest rate protection agreements with various
counterparties in order to fix the interest rates on a portion of the Company's
variable-rate revenue earning vehicle debt obligations. Under interest rate
swaps, the Company agrees with other parties to exchange, at specified
intervals, the difference between fixed-rate and floating-rate interest
amounts calculated by reference to an agreed notional principal amount. Income
or expense on derivative financial instruments used to manage interest rate
exposure is recorded on an accrual basis, as an adjustment to the interest
expense recorded on the underlying debt exposure for the periods covered by
the interest rate protection agreements. If an interest rate swap is terminated
early, any resulting gain or loss is deferred and amortized as an adjustment
of the yield on the underlying interest rate exposure position over the
remaining periods originally covered by the terminated swap. If all or part
of an underlying position is terminated, the related pro-rata portion of any
unrecognized gain or loss on the swap is recognized in income at that time as
part of the gain or loss on the termination.
11. INCOME TAXES
Income taxes have been provided for based upon the Company's
anticipated annual effective income tax rate.
12. STOCK OPTIONS AND WARRANTS
The Company has various stock option plans under which shares of Common
Stock may be granted to key employees and directors of the Company. Options
granted under the plans are non-qualified and are granted at a price equal to
the fair market value of the Common Stock at the date of grant. Generally,
options granted will have a term of ten years from the date of grant, and will
vest in increments of 25% per year over a four year period on the yearly
anniversary of the grant date.
A summary of stock option and warrant transactions for the six months
ended June 30, 1997 is as follows:
<TABLE>
<CAPTION>
Weighted-
Average
Exercise
Shares Price
------ ---------
<S> <C> <C>
Options and warrants outstanding at beginning of year............. 52.5 $ 7.63
Granted........................................................... 12.8 28.64
Exercised......................................................... (4.9) 3.98
Canceled.......................................................... (.5) 21.37
----
Options and warrants outstanding at June 30, 1997.................. 59.9 12.29
====
Options and warrants exercisable at June 30, 1997.................. 37.2 5.67
Options available for future grants at June 30, 1997............... 16.1 --
</TABLE>
13
<PAGE> 14
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The following table summarizes information about outstanding and
exercisable stock options and warrants at June 30, 1997:
<TABLE>
<CAPTION>
OUTSTANDING EXERCISABLE
------------------------------------ ----------------------
Weighted-
Average
Remaining Weighted- Weighted-
Contractual Average Average
Range of Exercise Life Exercise Exercise
Prices Shares (Years) Price Shares Price
----------------- ------ ------- --------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
$ 1.13 - $ 2.75 21.6 .72 $ 2.39 21.3 $ 2.40
2.95 - 16.13 21.2 5.86 9.36 13.7 7.33
16.25 - 41.88 17.1 9.47 28.40 2.2 26.52
---- ----
59.9 5.04 12.29 37.2 5.67
==== ====
</TABLE>
13. INCOME PER COMMON AND COMMON EQUIVALENT SHARE
Income per common and common equivalent share is based on the combined
weighted average number of common shares and common share equivalents
outstanding which include, where appropriate, the assumed exercise or conversion
of warrants and options. In computing income per common and common equivalent
share, the Company utilizes the treasury stock method.
The computation of weighted average common and common equivalent shares
used in the calculation of fully diluted income per share, which is
substantially the same as the computation used to calculate primary income per
share, is shown below:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Common shares outstanding.......................... 373.6 286.6 373.6 286.6
Common equivalent shares........................... 47.5 51.5 62.2 52.8
Weighted average treasury shares purchased......... (15.1) (12.8) (23.5) (12.0)
Effect of using weighted average common and
common equivalent shares outstanding........... (6.8) (6.7) (17.3) (14.8)
----- ------ ----- -----
399.2 318.6 395.0 312.6
===== ===== ===== =====
</TABLE>
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share" which establishes standards for computing and presenting earnings per
share ("EPS"). This Statement replaces primary and fully diluted EPS with basic
and diluted EPS. Basic EPS excludes dilution and is computed by dividing net
income by the weighted average common shares outstanding during the period.
Diluted EPS is computed similarly to fully diluted EPS pursuant to Accounting
Principles Board Opinion No. 15. SFAS No. 128 is effective for both interim and
annual periods ending after December 15, 1997. Earlier application is not
permitted. The Company's pro forma basic and diluted EPS computed under SFAS No.
128 are as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Basic...................................... $.19 $.11 $.28 $.17
Diluted.................................... .17 .09 .26 .15
</TABLE>
14. RESTRUCTURING AND NON-RECURRING EXPENSES
During the three months ended June 30, 1997, the Company recorded a
pre-tax $94.1 million provision for restructuring and non-recurring expenses
related to the integration of the Company's automotive rental operations. The
provision includes
14
<PAGE> 15
REPUBLIC INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
costs related to fleet consolidation, closure or sale of duplicate facilities,
elimination of redundant information systems and certain other non-recurring
expenses. The Company expects that the integration activities associated with
this provision will be substantially completed within one year.
15. OTHER INCOME, NET
Other income for the three and six months ended June 30, 1997 includes
a $102.3 million pre-tax gain from the May 1997 sale of the Company's 15.0
million shares of ADT Limited common stock, net of fees and expenses.
16. SHAREHOLDERS' EQUITY
In May 1997, the Company's Certificate of Incorporation was amended to
increase the number of authorized shares of Common Stock from 500.0 million to
1.5 billion shares.
In January 1997, the Company sold 15.8 million shares of Common Stock
in a private placement transaction resulting in net proceeds of $552.7 million.
17. LEGAL MATTERS
The Company is subject to various lawsuits, claims and other legal
matters arising in the ordinary course of conducting its business. The Company
believes that such lawsuits, claims and other legal matters should not have a
material adverse effect on the Company's consolidated results of operations,
financial condition or cash flows.
15
<PAGE> 16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
unaudited condensed consolidated financial statements and notes thereto included
under Item 1. In addition, reference should be made to the Company's audited
consolidated financial statements and notes thereto and related Management's
Discussion and Analysis of Financial Condition and Results of Operations. The
historical unaudited condensed consolidated financial statements of the Company
include the financial position and results of operations of The Pierce
Corporation ("Pierce"), Flemington Car and Truck Country and certain related
dealerships ("Flemington"), Spirit Rent-A-Car, Inc. ("Spirit"), Chesrown
Automotive Group ("Chesrown"), Bledsoe Dodge, Inc. ("Bledsoe"), National Car
Rental System, Inc. ("National"), Maroone Automotive Group ("Maroone"), Wallace
Automotive Group ("Wallace"), Taormina Industries, Inc. ("Taormina") and
Carlisle Motors, Inc. ("Carlisle") which the Company acquired during the six
months ended June 30, 1997. These transactions have been accounted for under the
pooling of interests method of accounting and, accordingly, the Company's
historical financial statements have been restated as if the companies had
operated as one entity since inception.
BUSINESS COMBINATIONS
The Company makes its decisions to acquire or invest in businesses
based on financial and strategic considerations.
PENDING ACQUISITIONS
In August 1997, the Company announced an offer to acquire EuroDollar
Holdings plc ("EuroDollar"), which operates an automotive rental business
primarily in the United Kingdom. The Company will pay approximately $150.0
million in cash or notes in this transaction, which will be accounted for under
the purchase method of accounting. The closing of the transaction is subject to
customary conditions, including regulatory approval and approval by the
requisite number of EuroDollar shareholders.
In July 1997, the Company signed a definitive agreement to acquire
Dobbs Automotive Group ("Dobbs"), which owns and operates twenty franchised
automotive dealerships. The Company will issue shares of its common stock, par
value $.01 per share ("Common Stock"), valued at approximately $200.0 million in
this transaction which will be accounted for under the purchase method of
accounting. The closing of the transaction is subject to customary conditions,
including manufacturer and regulatory approvals.
In July 1997, the Company signed a definitive agreement to acquire the
Anderson Dealership Group ("Anderson"), which owns and operates nine franchised
automotive dealerships. The Company will issue Common Stock valued at
approximately $40.0 million in this transaction which will be accounted for
under the pooling of interests method of accounting. The closing of the
transaction is subject to customary conditions, including manufacturer and
regulatory approvals.
In July 1997, the Company signed a definitive agreement to acquire the
assets of Silver State Disposal Service, Inc. ("Silver State"), which provides
waste collection services. The Company will issue its Common Stock valued at
approximately $378.0 million in this transaction which will be accounted for
under the pooling of interests method of accounting. The closing of the
transaction is subject to customary conditions, including regulatory approvals.
In June 1997, the Company signed a definitive agreement to acquire the
Appleway Automotive Group ("Appleway"), which owns and operates eight franchised
automotive dealerships. The Company will issue Common Stock valued at
approximately $42.6 million in this transaction, which will be accounted for
under the purchase method of accounting. The closing of the transaction is
subject to customary conditions, including manufacturer and regulatory
approvals.
In May 1997, the Company signed a definitive agreement to acquire
Desert Buick-GMC Automotive Group ("Desert"), which owns and operates four
franchised automotive dealerships. The Company will issue Common Stock valued at
approximately $38.0 million in this transaction, which will be accounted for
under the pooling of interests method of accounting. The closing of the
transaction is subject to customary conditions, including manufacturer and
regulatory approvals.
In May 1997, the Company signed a definitive agreement to acquire Gulf
Management, Inc. ("Gulf"), which owns and operates two franchised automotive
dealerships. The Company will issue Common Stock valued at approximately $45.0
million in this transaction, which will be accounted for under the purchase
method of accounting. The closing of the transaction is subject to customary
conditions, including manufacturer and regulatory approvals.
Additionally, the Company has signed definitive agreements to acquire
various other businesses in the automotive retail and solid waste services
industries which are not material to the Company. The Company will issue Common
Stock and/or cash valued in the aggregate at approximately $50.6 million in such
transactions which will be accounted for under the purchase
16
<PAGE> 17
method of accounting, and will issue Common Stock valued in the aggregate at
approximately $90.9 million in such transactions which will be accounted for
under the pooling of interests method of accounting. These transactions are
subject to customary conditions, including manufacturer and regulatory
approvals, as applicable.
ACQUISITIONS COMPLETED SUBSEQUENT TO JUNE 30, 1997
In August 1997, the Company acquired Snappy Car Rental, Inc.
("Snappy"), which operates an automotive rental business. The Company issued
approximately 1.0 million shares of Common Stock in this transaction which has
been accounted for under the purchase method of accounting.
In July 1997, the Company acquired Value Rent-A-Car ("Value"), which
operates an automotive rental business. The Company issued approximately 3.4
million shares of Common Stock in this transaction which has been accounted for
under the purchase method of accounting.
In July 1997, the Company acquired Courtesy Auto Group ("Courtesy"),
which owns and operates eleven franchised automotive dealerships. The Company
issued approximately 1.4 million shares of Common Stock in this transaction
which has been accounted for under the purchase method of accounting.
In July 1997, the Company acquired De La Cruz Auto Group ("De La
Cruz"), which owns and operates four franchised automotive dealerships. The
Company issued approximately 1.8 million shares of Common Stock in this
transaction, which has been accounted for under the pooling of interests method
of accounting.
Additionally, subsequent to June 30, 1997, the Company has acquired
various other businesses in the automotive retail and solid waste services
industries which were not material to the Company. The Company issued an
aggregate of approximately 2.2 million shares of Common Stock and paid
approximately $45.7 million in cash in such transactions which have been
accounted for under the purchase method of accounting and issued an aggregate of
approximately .7 million shares in such transactions which have been accounted
for under the pooling of interests method of accounting.
ACQUISITIONS COMPLETED DURING THE SIX MONTHS ENDED JUNE 30, 1997
Significant businesses acquired through June 30, 1997 and accounted for
under the pooling of interests method of accounting have been included
retroactively in the financial statements as if the companies had operated as
one entity since inception. Businesses acquired through June 30, 1997 and
accounted for under the purchase method of accounting are included in the
financial statements from the date of acquisition.
In June 1997, the Company acquired Pierce which owns and operates one
franchised automotive dealership and two used automotive dealerships. The
Company issued approximately 2.3 million shares of Common Stock in this
transaction, which has been accounted for under the pooling of interests method
of accounting.
In May 1997, the Company acquired Flemington, which owns and operates
twenty-four franchised automotive dealerships. The Company issued approximately
2.3 million shares of Common Stock in this transaction, which has been accounted
for under the pooling of interests method of accounting.
In May 1997, the Company acquired Spirit, which operates an automotive
rental business. The Company issued approximately 3.1 million shares of Common
Stock in this transaction, which has been accounted for under the pooling of
interests method of accounting.
In May 1997, the Company acquired Chesrown, which owns and operates
seven franchised automotive dealerships. The Company issued approximately 2.5
million shares of Common Stock in this transaction, which has been accounted for
under the pooling of interests method of accounting.
In May 1997, the Company acquired Bledsoe, which owns and operates
three franchised automotive dealerships. The Company issued approximately 1.7
million shares of Common Stock in this transaction, which has been accounted for
under the pooling of interests method of accounting.
In May 1997, the Company acquired Bankston Automotive Group
("Bankston"), which owns and operates four franchised automotive dealerships.
The Company issued approximately 1.4 million shares of Common Stock in this
transaction, which has been accounted for under the purchase method of
accounting.
In February 1997, the Company acquired National, which operates an
automotive rental business. The Company issued approximately 21.7 million shares
of Common Stock in this transaction, which has been accounted for under the
pooling of interests method of accounting.
17
<PAGE> 18
In February 1997, the Company acquired Maroone, which owns and operates
seven franchised automotive dealerships. The Company issued approximately 6.1
million shares of Common Stock in this transaction, which has been accounted for
under the pooling of interests method of accounting.
In February 1997, the Company acquired Wallace, which owns and operates
six franchised automotive dealerships. The Company issued approximately 1.7
million shares of Common Stock in this transaction, which has been accounted for
under the pooling of interests method of accounting.
In February 1997, the Company acquired Taormina, which provides waste
collection services and owns and operates a materials recycling facility. The
Company issued approximately 7.4 million shares of Common Stock in this
transaction, which has been accounted for under the pooling of interests method
of accounting.
In February 1997, the Company acquired Kendall Automotive Group
("Kendall"), which owns and operates three franchised automotive dealerships.
The Company issued approximately 1.2 million shares of Common Stock in this
transaction, which has been accounted for under the purchase method of
accounting.
In January 1997, following approval by the Company's stockholders at a
special meeting, the Company acquired AutoNation Incorporated ("AutoNation"),
which is developing a chain of used vehicle megastores. The Company issued
approximately 17.5 million shares of Common Stock in this transaction, which has
been accounted for under the purchase method of accounting.
In January 1997, the Company acquired Carlisle which owns and operates
three franchised automotive dealerships. The Company issued approximately 1.0
million shares of Common Stock in this transaction, which has been accounted for
under the pooling of interests method of accounting.
In January 1997, the Company acquired Grubb Automotive ("Grubb"), which
owns and operates eight franchised automotive dealerships. The Company issued
approximately 4.0 million shares of Common Stock in this transaction, which has
been accounted for under the purchase method of accounting.
In January 1997, the Company acquired Ed Mullinax, Inc. and
subsidiaries ("Mullinax"), which owns and operates five franchised automotive
dealerships. The Company issued approximately 3.6 million shares of Common Stock
in this transaction, which has been accounted for under the purchase method of
accounting.
In addition, during the six months ended June 30, 1997, the Company
acquired various other businesses in the automotive retail, solid waste services
and electronic security services industries which were not material to the
Company. The Company issued an aggregate of approximately 6.4 million shares of
Common Stock and paid approximately $29.3 million of cash in such transactions
which have been accounted for under the purchase method of accounting, and
issued an aggregate of approximately 9.1 million shares of Common Stock in such
transactions which have been accounted for under the pooling of interests method
of accounting. These acquisitions accounted for under the pooling of interests
method of accounting were not material in the aggregate and, consequently, prior
period financial statements were not restated for such acquisitions.
18
<PAGE> 19
BUSINESS SEGMENT INFORMATION
The following table sets forth revenue with percentages of total
revenue, and sets forth cost of operations, selling, general and administrative
expenses, restructuring and non-recurring expenses and operating income (loss)
with percentages of the applicable segment revenue, for each of the Company's
various business segments for the periods indicated (in millions):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- ----------------------------
1997 % 1996 % 1997 % 1996 %
---- - ---- - ---- - ---- -
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Automotive retail........................ $1,347.1 57 $ 637.9 43 $2,246.1 54 $1,168.9 42
Automotive rental........................ 739.5 31 671.0 45 1,380.8 34 1,255.1 45
Solid waste services..................... 263.0 11 170.3 11 466.2 11 307.1 11
Electronic security services............. 28.0 1 22.1 1 54.6 1 37.6 2
-------- --- -------- --- -------- --- -------- ---
2,377.6 100 1,501.3 100 4,147.7 100 2,768.7 100
Cost of Operations:
Automotive retail........................ 1,204.6 89 571.8 90 1,998.5 89 1,036.3 88
Automotive rental........................ 561.6 76 516.6 77 1,075.2 78 977.0 78
Solid waste services..................... 193.5 73 118.9 70 341.6 73 216.3 70
Electronic security services............. 12.8 46 11.0 50 24.4 45 17.2 45
-------- -------- -------- --------
1,972.5 1,218.3 3,439.7 2,246.8
Selling, General and Administrative:
Automotive retail........................ 129.9 10 58.6 9 220.9 10 112.6 10
Automotive rental........................ 131.4 18 137.0 20 259.4 19 261.3 21
Solid waste services..................... 23.2 9 21.3 12 45.6 10 38.5 13
Electronic security services............. 9.8 35 7.4 33 20.4 37 13.8 37
Corporate................................ 7.5 -- 2.4 -- 13.7 -- 5.2 --
-------- -------- -------- --------
301.8 226.7 560.0 431.4
Restructuring and
Non-Recurring Expenses:
Automotive rental........................ 94.1 12 -- -- 94.1 7 -- --
Operating Income (Loss):
Automotive retail........................ 12.6 1 7.5 1 26.7 1 20.0 2
Automotive rental........................ (47.6) (6) 17.4 3 (47.9) (4) 16.8 1
Solid waste services..................... 46.3 18 30.1 18 79.0 17 52.3 17
Electronic security services............. 5.4 19 3.7 17 9.8 18 6.6 18
Corporate................................ (7.5) -- (2.4) -- (13.7) -- (5.2) --
-------- ------- -------- --------
$ 9.2 $ 56.3 $ 53.9 $ 90.5
======== ======= ======== ========
</TABLE>
CONSOLIDATED RESULTS OF OPERATIONS
The Company's consolidated revenue increased 58% and 50% to $2.4
billion and $4.1 billion for the three and six months ended June 30, 1997,
respectively, due to growth in all four of the Company's business segments.
Consolidated operating income was $9.2 million and $53.9 million for the three
and six months ended June 30, 1997, respectively, versus $56.3 million and $90.5
million for the comparable 1996 periods. Net income was $69.5 million and $102.3
million for the three and six months ended June 30, 1997, respectively, versus
$30.0 million and $47.5 million for the comparable 1996 periods. Net income per
common and common equivalent share was $.17 and $.26 for the three and six
months ended June 30, 1997, respectively, versus $.09 and $.15 for the
comparable 1996 periods. During the three months ended June 30, 1997, the
Company recorded a $102.3 million pre-tax gain from the sale of its 15.0 million
shares of ADT Limited ("ADT") common stock. Additionally, the Company recorded a
$94.1 million pre-tax provision for restructuring and non-recurring expenses
related to the integration of the Company's automotive rental businesses.
Excluding this provision, each of the Company's business segments experienced
significant improvements over 1996. The operating results for each of the
Company's various business segments are discussed below.
AUTOMOTIVE RETAIL
The Company currently operates 106 franchised automotive dealerships
granted by various vehicle manufacturers, and has contracted to acquire 49
additional franchised automotive dealerships. The Company also operates 14 used
vehicle megastores under the name AutoNation USA(sm).
19
<PAGE> 20
Revenue from the Company's automotive retail operations consists of
sales of new and used vehicles and related automotive services and products.
Automotive retail revenue was $1.3 billion and $2.2 billion for the three and
six months ended June 30, 1997, respectively, versus $637.9 million and $1.2
billion for the comparable 1996 periods. Such increases are a result of
acquisitions during the periods which have been accounted for under the purchase
method of accounting and due to additional openings of AutoNation USA
megastores. The Company has signed definitive agreements to acquire several
additional franchised automotive dealerships and currently plans to continue
this expansion.
Cost of operations of the Company's automotive retail operations
consists primarily of the cost of new and used vehicles sold, the cost of
related automotive services and products sold and interest expense related to
vehicle inventory financing. Cost of operations was $1.2 billion and $2.0
billion for the three and six months ended June 30, 1997, respectively, versus
$571.8 million and $1.0 billion for the comparable 1996 periods. The increases
in aggregate dollars are due primarily to acquisitions and the opening of
AutoNation USA megastores as described above.
Selling, general and administrative expenses consist primarily of
salaries and marketing expenses. Such expenses were $129.9 million and $220.9
million for the three and six months ended June 30, 1997, respectively, versus
$58.6 million and $112.6 million for the comparable 1996 periods. The increases
in aggregate dollars are due to acquisitions and the opening of additional
AutoNation USA megastores as described above.
AutoNation incurred operating losses of $18.0 million and $26.1 million
during the three and six months ended June 30, 1997. Such operating losses are
attributed to start-up costs associated with the Company's development of these
operations. AutoNation is in the process of acquiring and/or developing numerous
additional sites. As the Company opens AutoNation USA megastores and
reconditioning centers during the remainder of 1997 and beyond, such operations
will incur fixed operating and administrative costs immediately while revenue
volume will tend to grow more gradually. Consequently, the Company anticipates
it will take approximately nine months for an average AutoNation USA megastore
to generate operating income.
AUTOMOTIVE RENTAL
Revenue from the Company's automotive rental operations consists
primarily of rental fees and sales of related rental products. Rental revenue
was $739.5 million and $1.4 billion for the three and six months ended June 30,
1997, respectively, versus $671.0 million and $1.3 billion for the comparable
1996 periods. The increases for the three and six months ended June 30, 1997
versus the same periods in 1996 are due to higher rental volume and increases
in average daily rental rates.
Automotive rental operating expenses consist primarily of vehicle
depreciation, interest and lease expenses and other direct operating expenses
including personnel, insurance, fleet maintenance and rental location occupancy
costs. Such expenses were $561.6 million and $1.1 billion for the three and six
months ended June 30, 1997, respectively, versus $516.6 million and $977.0
million for the comparable 1996 periods. The increases in aggregate dollars are
attributed to the increases in rental volume during the periods.
Selling, general and administrative expenses related to the Company's
automotive rental operations consist primarily of administrative personnel
salaries, marketing costs and agent and tour operator commissions. Such expenses
were 18% and 19% of automotive rental revenue for the three and six months ended
June 30, 1997, respectively, versus 20% and 21% for the comparable 1996 periods.
The decreases in selling, general and administrative expenses as percentages of
rental revenue are due to lower administrative expenses and overall growth in
revenue.
During the three months ended June 30, 1997, the Company recorded a
$94.1 million pre-tax provision for restructuring and non-recurring expenses
related to the integration of the Company's automotive rental operations. The
provision includes costs related to fleet consolidation, closure or sale of
duplicate facilities, elimination of redundant information systems and certain
other non-recurring expenses. The Company expects that the integration
activities associated with this provision will be substantially completed within
one year.
SOLID WASTE SERVICES
Revenue from the Company's solid waste services operations consists of
collection fees from residential, commercial and industrial customers and
landfill disposal fees charged to third parties. Solid waste revenue was $263.0
million and $466.2 million for the three and six months ended June 30, 1997,
respectively, versus $170.3 million and $307.1 million for the comparable 1996
periods. Such increases are a result of acquisitions as well as the expansion of
the Company's existing business.
Cost of solid waste services was $193.5 million and $341.6 million for
the three and six months ended June 30, 1997, respectively, versus $118.9
million and $216.3 million for the comparable 1996 periods. The increases in
aggregate dollars are a result of the expansion of the Company's solid waste
services operations through acquisitions and internal growth. Such
20
<PAGE> 21
expenses were 73% of solid waste services revenue for both the three and six
months ended June 30, 1997, versus 70% for both comparable 1996 periods. The
increases in cost of solid waste services as percentages of solid waste revenue
are primarily a result of certain of the Company's acquired collection companies
which had higher levels of operating costs than the Company's historical
operations.
Selling, general and administrative expenses related to the Company's
solid waste services operations were $23.2 million and $45.6 million for the
three and six months ended June 30, 1997, respectively, versus $21.3 million and
$38.5 million for the comparable 1996 periods. The increases in aggregate
dollars primarily reflect the growth of the Company's business through
acquisitions. Selling, general and administrative expenses were 9% and 10% of
solid waste services revenue for the three and six months ended June 30, 1997,
respectively, versus 12% and 13% for the comparable 1996 periods. The decreases
in selling, general and administrative expenses as percentages of solid waste
services revenue are primarily due to the reduction of administrative expenses
for acquired businesses and growth in revenue.
ELECTRONIC SECURITY SERVICES
Revenue from the Company's electronic security services operations
results from monitoring contracts for security systems and fees charged for the
sale and installation of such systems. Electronic security revenue was $28.0
million and $54.6 million for the three and six months ended June 30, 1997,
respectively, versus $22.1 million and $37.6 million for the comparable 1996
periods. The increases are primarily a result of expansion of the Company's
existing business as well as acquisitions during the periods.
Cost of electronic security services was $12.8 million and $24.4
million for the three and six months ended June 30, 1997, respectively, versus
$11.0 million and $17.2 million for the comparable 1996 periods. The increases
in aggregate dollars are a result of the installation of new monitoring systems.
Cost of electronic security services was 46% and 50% of electronic security
revenue for the three months ended June 30, 1997 and 1996, respectively. This
decrease is a result of certain of the Company's acquired security companies
which had higher levels of operating costs than the Company's historical
operations.
Selling, general and administrative expenses related to the Company's
electronic security services operations were $9.8 million and $20.4 million for
the three and six months ended June 30, 1997, respectively, versus $7.4 million
and $13.8 million for the comparable 1996 periods. The increases in aggregate
dollars primarily reflects the Company's expanded operations through the growth
of its existing business. Selling, general and administrative expenses were 35%
and 33% of electronic security revenue for the three months ended June 30, 1997
and 1996, respectively. The increase in such costs as a percentage of revenue is
primarily due to increased advertising costs associated with the Company's
implementation of mass marketing practices at acquired companies accounted for
under the pooling of interests method of accounting.
CORPORATE
Corporate selling, general and administrative expenses were $7.5
million and $13.7 million for the three and six months ended June 30, 1997,
respectively, versus $2.4 million and $5.2 million for the comparable 1996
periods. The increases are a result of the overall growth experienced by the
Company.
21
<PAGE> 22
INTEREST INCOME
Interest income was $3.8 million and $11.2 million for the three and
six months ended June 30, 1997, respectively, versus $6.9 million and $12.0
million for the comparable 1996 periods. Such decreases are primarily due to
lower average cash balances on hand during the periods.
INTEREST EXPENSE
Interest expense was incurred primarily on borrowings under the
Company's revolving credit facility as well as debt assumed in acquisitions.
Interest expense was $5.9 million and $9.4 million for the three and six months
ended June 30, 1997, respectively, versus $11.5 million and $19.9 million for
the comparable 1996 periods. Such decreases are primarily due to the repayment
of debt assumed in acquisitions. Interest expense related to revenue earning
vehicle financing in the Company's automotive rental operations is included in
automotive rental operating expenses. Interest expense related to the vehicle
inventory financing in the Company's automotive retail operations is included in
cost of automotive sales.
OTHER INCOME, NET
Other income for the three and six months ended June 30, 1997 includes
a $102.3 million pre-tax gain from the May 1997 sale of the Company's 15.0
million shares of ADT common stock, net of fees and expenses.
INCOME TAXES
Income tax expense was $39.9 million and $59.2 million for the three
and six months ended June 30, 1997, respectively, versus $24.6 million and $41.1
million for the comparable 1996 periods. The effective income tax rates were 37%
for both the three and six months ended June 30, 1997, respectively, versus 45%
and 46% for the comparable 1996 periods. The decreases in the effective income
tax rates for the three and six months ended June 30, 1997 are primarily due to
varying historical effective income tax rates of acquired businesses accounted
for under the pooling of interests method of accounting.
LANDFILL AND ENVIRONMENTAL MATTERS
The Company provides for accrued landfill and environmental costs which
include landfill site closure and post-closure costs. Landfill site closure and
post-closure costs include estimated costs to be incurred for final closure of
the landfills and estimated costs for providing required post-closure monitoring
and maintenance of landfills. These costs are accrued based on consumed
airspace. The Company estimates its future cost requirements for closure and
post-closure monitoring and maintenance for its solid waste facilities based on
its interpretation of the technical standards of the EPA's Subtitle D
Regulations. These estimates do not take into account discounts for the present
value of such total estimated costs.
Environmental costs are accrued by the Company through a charge to
income in the period such liabilities become probable and can be reasonably
estimated.
The Company periodically reassesses its methods and assumptions used to
estimate such accruals for landfill and environmental costs and adjusts such
accruals accordingly. Such factors considered are changing regulatory
requirements, the effects of inflation, changes in operating climates in regions
in which the Company's facilities are located and the expectations regarding
costs of securing environmental services.
FINANCIAL CONDITION
At June 30, 1997, the Company had $130.1 million in cash and
approximately $813.4 million of availability under its $1.0 billion unsecured
revolving credit facility which may be used for general corporate purposes. The
Company believes that it has sufficient operating cash flow and other financial
resources available to meet its anticipated capital requirements and obligations
as they come due.
In connection with the Company's automotive rental operations, Alamo
and National, through separate special purpose entities, may issue up to $1.4
billion and $1.1 billion of commercial paper, respectively, the proceeds of
which may be used solely to purchase or finance rental fleet vehicles that are
subject to manufacturer repurchase programs. National has also issued $800.0
million of medium term notes, the proceeds of which were used to finance rental
fleet vehicles. In June 1997, the Company entered into a 90-day $500.0 million
revolving credit facility to fund purchases of revenue earning vehicles under
eligible manufacturer repurchase programs during the peak summer season in the
leisure travel segment of the Company's automotive rental operations. The
Company has various other credit facilities to finance its current vehicle
rental operations in Europe and other foreign markets. In connection with the
development of the AutoNation USA megastores, the Company is the lessee under a
$500.0 million operating lease facility established to acquire and develop
properties used in its business. The Company has
22
<PAGE> 23
guaranteed the residual value of the properties under this facility which
guarantee totaled approximately $153.1 million at June 30, 1997.
WORKING CAPITAL
Working capital was $1.4 billion at June 30, 1997 as compared to $1.3
billion at December 31, 1996. The increase in working capital primarily results
from the sale of Common Stock in January 1997 in a private placement transaction
and the sale of the ADT shares in May 1997 resulting in aggregate net proceeds
to the Company of approximately $965.2 million. Such proceeds were used to repay
a portion of revenue earning vehicle debt, borrowings under the revolving credit
facility and other debt assumed in acquisitions. The Company believes working
capital may decline during the remainder of 1997 and beyond to lower levels as
additional capital is used for the continued expansion of the Company's
businesses including acquisitions and the development of the AutoNation
business.
Revenue earning vehicles, net consist of the Company's vehicle rental
fleet, net of accumulated depreciation, and were $4.5 billion at June 30, 1997
as compared to $3.6 billion at December 31, 1996. The increase is primarily due
to seasonality of fleet requirements.
Inventory was $758.2 million at June 30, 1997 as compared to $310.3
million at December 31, 1996. Inventory consists primarily of retail vehicles
held for sale valued using the specific identification method. The increase is
primarily attributed to various acquisitions related to the Company's automotive
retail business completed during the six months ended June 30, 1997 accounted
for under the purchase method of accounting as well as the opening of new
AutoNation USA megastores.
Accounts payable and accrued liabilities at June 30, 1997 were $646.3
million as compared to $511.7 million at December 31, 1996. The increase is
primarily attributed to various business acquisitions and expansion of the
Company's existing businesses.
Revenue earning vehicle debt consists of the Company's obligations to
various financial institutions secured by the Company's vehicle rental fleet.
The current maturities of such debt were $3.2 billion at June 30, 1997 and $2.5
billion at December 31, 1996. The Company expects to continue to fund its
purchases of revenue earning vehicles with secured vehicle financings.
PROPERTY AND EQUIPMENT
Property and equipment increased $729.0 million during the six months
ended June 30, 1997 as a result of various business acquisitions and increased
capital expenditures resulting from expansion of the Company's existing
businesses.
INTANGIBLE ASSETS
Intangible assets increased $629.6 million during the six months ended
June 30, 1997 as a result of the acquisition of various businesses accounted for
under the purchase method of accounting during the period.
SHAREHOLDERS' EQUITY
Shareholders' equity increased $1.3 billion during the six months ended
June 30, 1997 primarily due the acquisition of various businesses accounted for
under the purchase method of accounting as well as the January 1997 sale of
approximately 15.8 million shares of Common Stock which resulted in aggregate
net proceeds of approximately $552.7 million.
CASH FLOWS
Cash and cash equivalents decreased by $195.9 million during the six
months ended June 30, 1997 and increased by $168.5 million during the six months
ended June 30, 1996. The major components of these changes are discussed below.
CASH USED IN INVESTING ACTIVITIES
Purchases of revenue earning vehicles (net of sales) were approximately
$1.3 billion and $1.4 billion during the six months ended June 30, 1997 and
1996, respectively. Capital additions were $255.5 million and $108.3 million
during the six months ended June 30, 1997 and 1996, respectively. The increase
in capital additions is attributed primarily to the development of AutoNation
USA megastores, various business acquisitions and increased capital expenditures
resulting from expansion of the Company's existing businesses.
In March 1997, the Company exercised its warrant to acquire 15.0
million common shares of ADT for $20 per share. The purchase of the ADT shares
was financed through borrowings under a $300.0 million unsecured credit
facility. In April 1997,
23
<PAGE> 24
the Company refinanced this debt with borrowings under the Company's revolving
credit facility. In May 1997, the Company sold the 15.0 million ADT common
shares for $27.50 per share to certain institutional investors.
The Company expects capital expenditures to increase substantially
during the remainder of 1997 and in the foreseeable future due to the
development of the AutoNation business as well as continued internal growth of
existing businesses and future acquisitions. The Company intends to finance
capital expenditures through cash on hand, revolving credit facilities, lease
facilities and other financings.
CASH PROVIDED BY FINANCING ACTIVITIES
Cash provided by financing activities during the six months ended June
30, 1997 and 1996 resulted from revenue earning vehicle financings, commercial
bank borrowings, repayments of debt and issuances of Common Stock. In January
1997, the Company sold 15.8 million shares of Common Stock in a private
placement transaction resulting in net proceeds of approximately $552.7 million.
In May 1996, the Company sold 9.9 million shares of Common Stock in a private
placement transaction resulting in net proceeds of approximately $197.6 million.
Proceeds from private placements combined with cash provided by operating
activities were used to fund capital additions, to repay debt assumed in
acquisitions and to expand the Company's business during the periods.
SEASONALITY
The Company's automotive rental operations and particularly the leisure
travel segment is highly seasonal. In these operations, the third quarter, which
includes the peak summer travel months, has historically been the strongest
quarter of the year. During the peak season, the Company increases its rental
fleet and workforce to accommodate increased rental activity. As a result, any
occurrence that disrupts travel patterns during the summer period could have a
material adverse effect on the annual performance of this segment. The first and
fourth quarters for the Company's automotive rental operations are generally the
weakest, when there is limited leisure family travel and a greater potential for
adverse weather conditions. Many of the operating expenses such as rent, general
insurance and administrative personnel are fixed and cannot be reduced during
periods of decreased rental demand.
ACCOUNTING CHANGES
Statement of Financial Accounting Standards No. 130 ("SFAS 130"),
"Reporting Comprehensive Income", was issued by the Financial Accounting
Standards Board in June 1997. This Statement requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. The Company will adopt SFAS
130 beginning January 1, 1998. The effect of adopting this standard is not
expected to be material.
Statement of Financial Accounting Standards No. 131 ("SFAS 131"),
"Disclosures about Segments of an Enterprise and Related Information", was
issued by the Financial Accounting Standards Board in June 1997. This Statement
establishes standards for reporting information about operating segments in
annual financial statements and requires reporting of selected information about
operating segments in interim financial reports issued to stockholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. The Company will adopt SFAS 131 beginning
January 1, 1998. The effect of adopting this standard is not expected to be
material.
FORWARD-LOOKING STATEMENTS
Certain statements and information included herein constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance, or achievements of the Company to be materially
different from any future results, performance, or achievements expressed or
implied by such forward-looking statements. Such factors include, among other
things, the ability to develop and implement operational and financial systems
to manage rapidly growing operations; competition in the Company's lines of
business; the ability to integrate and successfully operate acquired businesses
and the risks associated with such businesses; the ability to obtain financing
on acceptable terms to finance the Company's growth strategy and for the Company
to operate within the limitations imposed by financing arrangements; the
Company's limited history of operations in automotive retailing; the dependence
on vehicle manufacturers to approve dealership acquisitions; the possibility of
unfavorable changes to the cost or financing of the Company's vehicle rental
fleet; the Company's dependence on key personnel; and other factors referenced
herein. The Company is currently engaged in legal and administrative proceedings
in several states with Toyota Motor Sales USA, Inc. and American Honda Co. Inc.,
arising out of such vehicle manufacturers' attempts to limit the number and
timing of the Company's acquisitions of automotive dealerships operating under
their franchises. Although the Company believes that it will ultimately prevail
in these proceedings, such proceedings could delay the expansion of the
Company's automotive retailing operations with respect to Toyota and Honda
franchises.
24
<PAGE> 25
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
(a) On May 13, 1997, the Company's Second Amended and Restated
Certificate of Incorporation was amended to increase the number of authorized
shares of Common Stock from 500,000,000 to 1,500,000,000.
(c) Sales of unregistered shares during the three months ended June 30,
1997:
All transactions listed below involve the issuance of shares of Common
Stock by the Company in reliance upon Section 4(2) of the Securities Act of
1933, as amended.
On May 8, 1997, in connection with the acquisition of Bledsoe Dodge,
Inc. ("Bledsoe"), the Company issued 1,653,543 shares of Common Stock to the
shareholders of Bledsoe in exchange for all of the issued and outstanding stock
of Bledsoe.
On May 9, 1997, in connection with the acquisition of Spirit
Rent-A-Car, Inc. ("Spirit"), the Company issued 3,099,029 shares of Common Stock
to the shareholders of Spirit in exchange for all of the issued and outstanding
stock of Spirit.
On May 12, 1997, in connection with the acquisition of Chesrown
Automotive Group ("Chesrown"), the Company issued 2,457,657 shares of Common
Stock to the shareholders of Chesrown in exchange for all of the issued and
outstanding stock of Chesrown.
On May 29, 1997, in connection with the acquisition of Flemington
Automotive Group ("Flemington"), the Company issued 2,297,021 shares of Common
Stock to the shareholders of Flemington in exchange for all of the issued and
outstanding stock of Flemington.
On May 30, 1997, in connection with the acquisition of National
Serv-All, Inc. and related entities ("National Serv-All"), the Company issued
1,683,695 shares of Common Stock to the shareholders of National Serv-All in
exchange for all of the issued and outstanding stock of National Serv-All.
On June 23, 1997, in connection with the acquisition of The Pierce
Corporation and related entities ("Pierce"), the Company issued 2,282,988 shares
of Common Stock to the shareholders of Pierce in exchange for all of the issued
and outstanding stock of Pierce.
From time to time throughout the three months ended June 30, 1997, the
Company issued an aggregate of 197,173 shares of Common Stock to certain warrant
holders in connection with the exercise of warrants to purchase shares of Common
Stock at exercise prices ranging from $1.13 to $3.78.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's 1997 Annual Meeting of Stockholders on May 13, 1997,
the stockholders of the Company voted upon and elected the following directors
and approved and adopted the following proposals:
(A) DIRECTOR NOMINEE VOTES CAST FOR VOTES WITHHELD
---------------- -------------- --------------
H. Wayne Huizenga 299,472,131 2,657,108
Steven R. Berrard 299,518,262 2,610,977
Harris W. Hudson 299,482,042 2,647,197
J.P. Bryan 299,485,431 2,643,808
Rick L. Burdick 299,484,856 2,644,383
Michael G. DeGroote 299,484,023 2,645,216
George D. Johnson, Jr. 299,523,251 2,605,988
John J. Melk 299,479,411 2,649,828
(B) To approve and adopt an amendment to the Company's Second
Amended and Restated Certificate of Incorporation to increase
the number of authorized shares of common stock of the Company
from 500,000,000 shares to 1,500,000,000 shares (266,037,481
votes were cast for this matter, 35,734,290 votes were cast
against this matter and there were 357,468 abstentions and
broker non-votes).
25
<PAGE> 26
(C) To approve and adopt the Company's 1997 Employee Stock Option
Plan (263,854,204 votes were cast for this matter, 7,261,118
votes were cast against this matter and there were 30,993,917
abstentions and broker non-votes).
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3.1 Third Amended and Restated Certificate of Incorporation of
Republic Industries, Inc. (incorporated by reference to
Exhibit 99 to Registrant's Current Report on Form 8-K, dated
May 14, 1997)
4.1 Credit Facilities and Reimbursement Agreement, dated as of
April 23, 1997, by and among Republic Industries, Inc. and
Republic Resources Company, as Borrowers, NationsBank National
Association (South), as agent, and the lenders named therein
(incorporated by reference to Exhibit 4.22 to Registrant's
Current Report on Form 8-K, dated June 13, 1997).
27.1 Financial Data Schedule for the Six Months Ended June 30, 1997
(For SEC use only)
27.2 Financial Data Schedule for the Six Months Ended June 30, 1996
(Restated) (For SEC use only)
(b) Reports on Form 8-K:
Form 8-K dated April 10, 1997 reporting the appointment of Robert J.
Brown to the Board of Directors.
Form 8-K dated May 14, 1997 reporting the Third Amended and Restated
Certificate of Incorporation of Republic Industries, Inc.
Form 8-K/A dated February 27, 1997 reporting financial information for
consummated acquisitions.
Form 8-K dated June 13, 1997 reporting certain financial information
for consummated acquisitions and certain other information.
26
<PAGE> 27
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant, Republic Industries, Inc., has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
REPUBLIC INDUSTRIES, INC.
By: /s/ MICHAEL S. KARSNER
----------------------
Michael S. Karsner
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL OFFICER)
Date: August 14, 1997
27
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