AutoNation Inc. (AN, Financial) filed Annual Report for the period ended 2011-12-31.
has a market cap of $5.05 billion; its shares were traded at around $35.9 with a P/E ratio of 18.6 and P/S ratio of 0.4. had an annual average earning growth of 3.9% over the past 10 years.
Same store parts and service gross profit increased during 2010, as compared to 2009, primarily due to increases in gross profit associated with the preparation of vehicles for sale and service work outsourced to third-parties of $23.8 million, warranty of $2.5 million, and wholesale and retail counter parts of $2.5 million.
SG&A expenses increased in 2011, as compared to 2010, due to a volume-driven increase in compensation expense, an increase in store and corporate overhead expenses, including a $4.9 million increase associated with hail-storm related losses, and a $7.8 million increase in gross advertising expenditures, partially offset by a $3.8 million increase in advertising reimbursements from manufacturers. As a percentage of total gross profit, SG&A expenses decreased to 71.6% in 2011 from 73.0% in 2010 resulting from our continued effective management of our cost structure and improved gross profit.
SG&A expenses increased in 2010, as compared to 2009, primarily due to a volume-driven increase in compensation expense and a $20.0 million increase in gross advertising expenditures, partially offset by a $9.8 million increase in advertising reimbursements from manufacturers. As a percentage of total gross profit, SG&A expenses decreased to 73.0% in 2010 from 75.8% in 2009 resulting from our continued effective management of our cost structure and improved gross profit.
Under our prior credit agreement we were, and under our new credit agreement we are, required to remain in compliance with a maximum leverage ratio and maximum capitalization ratio. The leverage ratio is a contractually defined amount principally reflecting non-vehicle debt divided by a contractually defined measure of earnings with certain adjustments. The capitalization ratio is a contractually defined amount principally reflecting vehicle floorplan payable and non-vehicle debt divided by our total capitalization including vehicle floorplan payable. Under the new credit agreement, the maximum capitalization ratio is 65.0%, compared to 60.0% under the prior credit agreement, and the maximum leverage ratio is 3.75x, compared to 3.25x under the prior credit agreement. In calculating our leverage ratio, we are not required to include letters of credit in the definition of debt (except to the extent of letters of credit in excess of $150.0 million), and, in calculating our capitalization ratio, we are permitted to add back to shareholders equity all goodwill, franchise rights, and long-lived asset impairment charges subsequent to September 30, 2011 plus $1.52 billion. The specific terms of these covenants can be found in our new credit agreement, which we filed with our Current Report on Form 8-K on December 8, 2011.
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has a market cap of $5.05 billion; its shares were traded at around $35.9 with a P/E ratio of 18.6 and P/S ratio of 0.4. had an annual average earning growth of 3.9% over the past 10 years.
Highlight of Business Operations:
We had net income from continuing operations of $284.2 million and diluted earnings per share of $1.93 in 2011, as compared to net income from continuing operations of $235.3 million and diluted earnings per share of $1.48 in 2010, and net income from continuing operations of $233.1 million and diluted earnings per share of $1.31 in 2009.Same store parts and service gross profit increased during 2010, as compared to 2009, primarily due to increases in gross profit associated with the preparation of vehicles for sale and service work outsourced to third-parties of $23.8 million, warranty of $2.5 million, and wholesale and retail counter parts of $2.5 million.
SG&A expenses increased in 2011, as compared to 2010, due to a volume-driven increase in compensation expense, an increase in store and corporate overhead expenses, including a $4.9 million increase associated with hail-storm related losses, and a $7.8 million increase in gross advertising expenditures, partially offset by a $3.8 million increase in advertising reimbursements from manufacturers. As a percentage of total gross profit, SG&A expenses decreased to 71.6% in 2011 from 73.0% in 2010 resulting from our continued effective management of our cost structure and improved gross profit.
SG&A expenses increased in 2010, as compared to 2009, primarily due to a volume-driven increase in compensation expense and a $20.0 million increase in gross advertising expenditures, partially offset by a $9.8 million increase in advertising reimbursements from manufacturers. As a percentage of total gross profit, SG&A expenses decreased to 73.0% in 2010 from 75.8% in 2009 resulting from our continued effective management of our cost structure and improved gross profit.
Under our prior credit agreement we were, and under our new credit agreement we are, required to remain in compliance with a maximum leverage ratio and maximum capitalization ratio. The leverage ratio is a contractually defined amount principally reflecting non-vehicle debt divided by a contractually defined measure of earnings with certain adjustments. The capitalization ratio is a contractually defined amount principally reflecting vehicle floorplan payable and non-vehicle debt divided by our total capitalization including vehicle floorplan payable. Under the new credit agreement, the maximum capitalization ratio is 65.0%, compared to 60.0% under the prior credit agreement, and the maximum leverage ratio is 3.75x, compared to 3.25x under the prior credit agreement. In calculating our leverage ratio, we are not required to include letters of credit in the definition of debt (except to the extent of letters of credit in excess of $150.0 million), and, in calculating our capitalization ratio, we are permitted to add back to shareholders equity all goodwill, franchise rights, and long-lived asset impairment charges subsequent to September 30, 2011 plus $1.52 billion. The specific terms of these covenants can be found in our new credit agreement, which we filed with our Current Report on Form 8-K on December 8, 2011.
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