AutoNation Management Discusses Q2 2012 Results - Earnings Call Transcript

AutoNation is well positioned to capitalize on recovery with an optimal brand and market mix and a disciplined cost structure. We continue to demonstrate our ability to drive strong shareholder returns during the multiyear recovery in auto retail.

I'll now turn the call over to our Chief Financial Officer, Mike Short.

Mike Short

Thank you, Mike, and good morning, ladies and gentlemen. For the second quarter, we reported adjusted net income from continuing operations of $82 million or $0.66 per share versus $73 million or $0.49 per share during the second quarter of 2011, a 35% improvement on a per-share basis. Our second quarter results for the year excluded $2.6 million or $0.02 per share related to our franchise impairment. There were no other adjustments to net income in the prior-year period. Adjustments to net income are included in the reconciliations provided in our press release.

In the second quarter, revenue increased $568 million or 17% compared to the prior year and gross profit improved by $45 million or 8%. SG&A, as a percentage of gross profit, was 69.8% for the quarter, which represents 180-basis-point improvement compared to the year-ago period. We're pleased with these results and continue to focus on improving operating leverage across our business.

Net new vehicle floorplan was a benefit of $8.2 million, an improvement of $4.8 million from the second quarter of 2011, primarily due to higher floorplan assistance, driven by increased vehicle sales as well as negotiated -- as well as lower negotiated floorplan interest rates compared to the year -- to the prior-year period.

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