Group 1 Automotive Inc 8-K, filed Oct 7, 2020
Group 1 Automotive Inc (GPI)
About this 8-K
Group 1 Automotive Inc filed this 8-K on October 7, 2020, reporting on events of October 6, 2020.
Items reported
- Item 2.02: Financial results
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On October 6, 2020, Group 1 Automotive, Inc., a Delaware corporation (the “Company”), issued a press release announcing its revised outlook for its expected earnings per diluted share for the third quarter ended September 30, 2020.
A copy of the press release is attached as Exhibit 99.1, the contents of which are incorporated in this Item 2.02 by reference.
As provided in General Instructions B.2. of Form 8-K, the information in this Item 2.02 (including the portion of the press release attached as Exhibit 99.1 incorporated by reference in this Item 2.02) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 8.01 Other Events.
Additionally, on October 6, 2020, the Company announced that its Board of Directors approved a new common share repurchase in the amount of $200 million. Purchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or in privately negotiated transactions.
The Company also announced that it expects to reinstate a quarterly cash dividend following the mid-November 2020 meeting of its Board of Directors.
A copy of the press release announcing the share repurchase authorization and anticipated dividend reinstatement is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits
Exhibit Index
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Exhibit Number |
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Description |
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99.1 |
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Press Release of Group 1 Automotive, Inc., dated as of October 6, 2020. |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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.
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Group 1 Automotive, Inc. |
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Date: October 7, 2020 |
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By: |
/s/ Darryl M. Burman |
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Name: Darryl M. Burman |
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Title: Sr. Vice President |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Group 1 Automotive Reports Preliminary Third Quarter 2020 Results, New Share Repurchase Authorization, and Intention to Reinstate Dividend
HOUSTON, October 6, 2020 — Group 1 Automotive, Inc. (NYSE: GPI), an international, Fortune 500 automotive retailer, today reported preliminary financial results for the three months ended September 30, 2020. Group 1 expects diluted earnings per common share to be between $6.25 and $6.65, and adjusted diluted earnings per common share between $6.40 and $6.80. Adjusted earnings per share reflects the exclusion of the $3.3 million pre-tax expense or approximately $0.15 EPS impact of redeeming all previously issued 5.00% bonds due June 2022. This represents a 206% to 226% increase on a GAAP basis and a 112% to 125% increase on an adjusted basis as compared to third quarter 2019 results of $2.04 and $3.02, respectively.
This earnings increase represents a continuation of the solid profit performance of May and June 2020. Group 1 believes that new and used vehicle gross margins in the U.S. have more than offset reduced vehicle sales volumes stemming from low inventory levels, resulting in year-over-year gross profit growth. U.S. SG&A expense as a percentage of gross profit continues to be well below historical levels and was generally consistent with second quarter 2020 reported non-GAAP results. Group 1 expects a material percentage of these cost reductions to be permanent.
Group 1’s U.K. operations also contributed to the significant third quarter profit improvement with vehicle sales and service levels recovering from the extensive lockdowns that occurred over April and May. U.K. new vehicle same store sales increased approximately 20 percent over 2019 and used vehicle sales were up mid-single digits. U.K. SG&A expense as a percentage of gross profit will be well below 2019 levels, and we expect a significant portion of those cost reductions to be permanent as well. Additionally, Group 1’s Brazilian operations were profitable for the quarter despite severe traffic reductions in Sao Paulo due to the pandemic.
The foregoing estimated results are based on preliminary information as of this date and are subject to change following completion of the quarter-end review process and other developments arising between now and the time financial results are finalized. In addition, these preliminary unaudited results are not comprehensive financial results for the quarter ending September 30, 2020, should not be viewed as a substitute for complete GAAP financial statements or more comprehensive financial information, and are not indicative of the results for any future period.
Additionally, Group 1 is announcing a new $200 million share repurchase authorization. Purchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or in privately negotiated transactions. The company expects that any repurchase of shares will be funded from cash from operations. Repurchased shares will be held in treasury. Furthermore, the company expects to reinstate a quarterly cash dividend following its board meeting in mid-November payable in mid-December.
About Group 1 Automotive, Inc.
Group 1 Automotive, Inc.
Group 1 owns and operates 186 automotive dealerships, 242 franchises, and 49 collision centers in the United States, the United Kingdom and Brazil that offer 31 brands of automobiles. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service contracts; provides automotive maintenance and repair services; and sells vehicle parts.
Investors please visit www.group1corp.com, www.group1auto.com, www.group1collision.com, www.facebook.com/group1auto, and www.twitter.com/group1auto, where Group 1 discloses additional information about the Company, its business, and its results of operations.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our strategic investments, goals, plans, projections and guidance regarding our financial position, results of operations, business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should," "foresee," "may" or "will" and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, (i) our ability to retain key personnel, (j) the impacts of COVID-19 on our business, (k) the impacts of any potential global recession and (l) our ability to maintain sufficient liquidity to operate. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
SOURCE: Group 1 Automotive, Inc.
Investor contacts:
Sheila Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | sroth@group1auto.com
Media contacts:
Pete DeLongchamps
Senior V.P. Manufacturer Relations, Financial Services and Public Affairs
Group 1 Automotive, Inc.
713-647-5770 | pdelongchamps@group1auto.com
or
Clint Woods
Pierpont Communications, Inc.
713-627-2223 | cwoods@piercom.com