Penske Automotive Group, Inc. (NYSE:PAG) Q1 2016 Earnings Conference Call - Final Transcript

Apr 26, 2019 • 02:00 pm ET


Penske Automotive Group, Inc. (NYSE:PAG) Q1 2016 Earnings Conference Call - Final Transcript


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Good afternoon, ladies and gentlemen. Welcome to the Penske Automotive Group First Quarter 2016 Earnings Conference Call.

[Operator Instructions]

I'll now introduce Tony Pordon, the company's Executive Vice President of Investor Relations and Corporate Development. Sir, please go ahead.

Tony Pordon

Thank you Lori and good afternoon everyone. A press release detailing Penske Automotive Group's first quarter 2016 financial results was issued this morning and is posted on our website, along with a presentation designed to assist you in understanding our performance.

Joining me for today's call is Roger Penske, our Chairman; J.D. Carlson, our Chief Financial Officer; and Shelley Hulgrave, our Controller.

On this call, we'll be discussing certain non-GAAP financial measures, such as earnings before interest, taxes, depreciation and amortization or EBITDA. We have reconciled these measures in this morning's press release and investor presentation, which is available on our website to the most directly comparable GAAP measures. Also, we may make forward-looking statements. Our actual results may vary because of risks and uncertainties outlined in today's press release, which may cause the actual results to differ materially from expectations. Additional discussion and factors that could cause results to differ materially are contained in our public SEC filings, including our Form 10-K.

I'll now turn the call over to Roger.

Roger Penske

Thank you, Tony. Good afternoon everyone and thank you for joining us today. We reported another outstanding financial performance, including record first quarter results. This follows record financial performance posted by our Company in 2015.

For the first quarter, income from continuing operations increased 4.2% to $79.3 million and related earnings per share increased 7.1% to $0.90 per share. Foreign exchange rates negatively impacted earnings per share by $0.03 during the first quarter. The resiliency of the US and UK markets drove solid performance from our truck dealership operations and drove our business to another quarter of record results.

During the quarter, we increased our dividend to $0.26 reflecting the continued strength of our business. PAG offers shareholders a current yield of 2.9%, the highest in the automotive retail space.

During the quarter, we acquired a 49% ownership interest in the Nicole Group, located in Japan that operates nine dealerships, including four BMW, three MINI, a Rolls-Royce and a Ferrari, along with two standalone service centers and 2 pre-owned showrooms. We increased our ownership in our Germany-based Jacobs Group from 60% to 68% and we divested of three non-core dealerships. We repurchased 4.5 million shares of common stock for approximately $168 million. Additionally, in April, our Premier Truck Group subsidiary acquired Harper Truck Centres located in Ontario, Canada, with five dealership locations in Greater Toronto. The acquisition is expected to generate approximately $130 million in annualized revenue.

Now, let's turn to the details of our first quarter performance. Revenue increased 7.6% to $4.8 billion and same-store retail revenue increased 2.5%. The revenue increase was driven by acquisitions, along with a 9.9% increase in retail units sold. Excluding foreign exchange, revenue increased 10% to $4.9 billion. Approximately 94% of our total revenue