Group 1 Automotive Reports Record Profits For First Quarter 2012

First-Quarter 2012 Highlights

Total revenues of $1.66 billion were the best reported first quarter and second-best all-time quarter in the history of the company.

Total gross margin was 15.6 percent, as gross profit grew 17.4 percent from the prior year to an all-time record of $260.4 million.

New vehicle gross profit increased 23.5 percent on 16.3 percent higher revenues, as the company retailed 13.1 percent more units and the average selling price expanded 2.9 percent, to $32,674.

Retail used vehicle unit sales surged 24.0 percent and the average selling price increased 3.4 percent, to $20,000, driving gross profit growth of 25.9 percent on 28.3 percent higher revenues.

Parts and service revenues increased 9.3 percent from the prior year, reflecting continued growth in customer-pay, wholesale parts and collision businesses.

Finance and insurance gross profit per retail unit of $1,175 was also a record first-quarter result.

Further demonstrating the improving cost leverage, selling, general and administrative expenses as a percent of gross profit improved 280 basis points, to 76.5 percent, from the prior-year period.

Operating margin expanded to 3.2 percent, a 40 basis-point improvement from the prior-year period.

"Group 1's strong, first-quarter operating and financial results included record-setting revenues, gross profit and earnings for our shareholders," said Earl J. Hesterberg, Group 1's president and chief executive officer. "In addition, I am delighted with our operating margin expansion, which reflects the improvements and efficiencies we have implemented during the last several years. Based on the first-quarter results, we now expect new vehicle industry sales of 14.5 million units in 2012."

Corporate Development Recap As previously announced during the first quarter, Group 1 added three franchises to its portfolio including Volkswagen, BMW and Hyundai franchises that are expected to add $143.5 million in annual revenues.

First-Quarter Earnings Conference Call Group 1's senior management will host a conference call today at 10 a.m. ET to discuss the first-quarter financial results and the company's outlook and strategy.