Monro Muffler Brake Bemoans ‘Lousy’ Start To Current Quarter, Optimistic About Likelihood Of A Rebound
Fiscal 2012 — which, for Monro Muffler Brake, ended March 31, 2012 — was a tough-enough year. But nobody at the Rochester, NY-based service center chain saw the decline in early-spring sales coming. It left management displeased, to say the least, and analysts asking what this means both now and further on down the road.
Chairman and CEO Rob Gross admitted on a May 24 conference call that the sales trends that Monro witnessed in April and up to that point in May were “the worst seven-week sales period since I’ve been with the company.” (Gross joined the Monro in January 1999).
What’s going on, he told analysts on the call, is that the cautious consumer continues to defer and prioritize purchases. And, perhaps, the consumer is a bit worse off than all of us suspected. So, while Monro’s management believes that overall pressure on the consumer is the overriding driver of its poor start to fiscal year 2013, as Gross said: “At the end of the day, people need what we sell and can only defer purchases of our products and services for so long.”
He added that, while atypical weather patterns were a negative factor for Monro in the fiscal third and fourth quarters of 2012, it can be nothing but a positive for the company in the third and fourth quarters of fiscal 2013.
But, how bad was the start of the first quarter of fiscal 2013? Gross called it “lousy.”
Comparable-store sales through the first seven weeks of the quarter were down 7 percent, versus up 1 percent a year ago. Comp-store oil changes were up 1 percent, but the other key sales categories were down. Gross said this indicates that consumers are still visiting Monro for basic maintenance but were deferring larger purchases. “Because consumers eventually have to get these needs addressed, we would expect our traffic and sales trends to improve significantly in the coming months,” he said, noting that sales had improved in the four days prior to the May 24 conference call.
Management expects comps to decrease between 5 percent and 7 percent for the entire quarter ending June 30, 2012. That would be up against a 2-percent gain from the full quarter a year ago.
With the first quarter off to a weaker start, Monro’s comp performance in fiscal 2013 will be dampened. Gross forecast that the first quarter would be the worst, with the second quarter the second-worst. He said that the third and fourth quarters would be the company’s best because they will go up against flat comps and the fact that the previous year had “absolutely no winter and ridiculously weak unit sales of tires.”
For the full fiscal year, management anticipates that the company will produce between $750 million and $775 million in sales, which would top the $686.55 million in sales Monro recorded in fiscal 2012. Comparable-store sales growth — adjusted for days because of a difference in the number of selling days from one year to the next — is expected to come in flat (at the low end of management’s guidance) or up 3 percent (at the high end).
Gross pointed out that, historically, Monro has leveraged its business model to continue to expand its operations and enhance shareholder returns regardless of the economic or operating environment. “As we look forward, we continue to have a positive long-term outlook for our industry and company,” Gross said, “though we are more cautious near-term as we believe that higher gas prices and the macroeconomic environment will continue to weigh on consumer sentiment and purchasing behavior.”
Acquisitions will be a key part of Monro’s effort to build sales in fiscal 2013 and to position the company for stronger results in the years following. The company disclosed that it has a letter of intent on one transaction, which it anticipates closing in the quarter ending in September. The acquisition target generates roughly $25 million in annual sales.
“We are very optimistic about growing our market share further in fiscal 2013 through accelerated, disciplined and accretive acquisitions (even beyond those referred to above) that should allow us to achieve greater economies of scale while positioning the company even more strongly for the long-term.”
Gross said on the call that Monro has non-disclosure agreements (NDAs) in place with seven additional acquisition candidates. Five of those are within the company’s existing geographic footprint and two are in areas adjacent to it.
Gross emphasized to analysts that the tough operating climate for service providers — especially tire shops — makes it a good time for Monro to find good value acquisitions. “We have not seen a better environment for accelerated growth through accretive acquisitions than we’re seeing currently,” he said.
Bret Jordan and David Kelley of BB&T Capital Markets believe that the acquisition pipeline should remain an earnings driver for Monro. “With seven signed NDAs — excluding a roughly $25-million revenue acquisition expected to close in Q2 — and approximately 40 stores purchased in Q1, Monro appears on track to reach double-digit top-line growth from acquisition revenue in calendar year 2012,” the analysts wrote in a May 25 report. “Coupling this with accelerating costs and soft volumes that are likely pressuring independents, we expect the acquisition pipeline could remain robust well in to fiscal year 2014.”
They added later in the report: “As the largest company-owned and -operated car service chain, Monro remains well-positioned to integrate smaller regional chains and to further leverage already-meaningful scale in purchasing and distribution.” — Marc Vincent
Monro’s Fiscal Q4 Tire Comps Rose 2%, Brake Comps Increased 4%
On the surface, Monro Muffler Brake ended fiscal 2012 on a high note with record sales ($171.75 million, up 13.9 percent) and record net income ($10.50 million, up 27.3 percent) for the three months ended March 31, 2012. Additionally, comparable-store sales were up 7.4 percent.
However, when you dig below the surface, you see that Monro’s numbers aren’t all that they appear.
Let’s start with the top line … Sales grew $20.94 million, or 13.9 percent, to $171.75 million. This was largely driven by sales from new stores, accounting for roughly $11.50 million of the $20.94 million year-over-year sales increase. The fact that the fiscal 2012 period had six additional selling days also boosted sales. That’s evident when you analyze Monro’s comparable-store sales.
As we previously stated, comps increased 7.4 percent year-over-year. However, adjusting for days, comps were up only 0.7 percent. This was slightly below management’s guidance calling for comparable-store sales growth between 1 percent and 4 percent, and below analysts’ consensus estimate of 2 percent. Nonetheless, the 0.7-percent increase did top flat growth from the fourth quarter of fiscal 2011.
It’s worth noting that comps (also adjusted for days) increased 4 percent for brakes and 2 percent for tires. Front-end and shocks comps were up 1 percent, while comps were down 8 percent for exhaust and down 1 percent for both maintenance services and alignments.
Moving on … While gross profit increased 10 percent to $66.49 million, gross margin fell from 40.1 percent a year ago to 38.7 percent because of increased tire and oil costs and management’s decision to not pass certain increases along to consumers. This was partially offset by reduced costs from Monro’s direct import purchasing program, as well as improved labor productivity and the leveraging of fixed occupancy costs.
Net income increased 27.3 percent to $10.50 million, and diluted earnings per share (EPS) rose 26.9 percent to $0.33. EPS was below management’s guidance and analysts’ consensus estimate. However, if you add back $0.03 in due diligence costs related to Monro’s unsuccessful pursuit of Midas Inc., you would get EPS of $0.36. That would have beaten analysts’ consensus estimate and been within management’s guidance for the quarter.
Rob Gross, the chairman and CEO of Monro, said on a May 24 conference call that the company’s performance, for the most part, was inline with — if not better than — industry trends.
“We believe these results demonstrate the flexibility of our business model, which allows us to enhance our business in both strong and weak markets,” Gross told analysts on the call. “Low-cost company-owned operations in markets with strong store density allowed us to continue to effectively serve our customers’ needs. Owning both tire and service store chains provided pivotal flexibility, as service stores fared better in a tough year for tire sales across the industry.” — Marc Vincent
Consumers Increasingly Are Responding To Service Specials, Reports NPD
For DIFM auto service consumers, familiarity with a service outlet, convenient location and trust are the top three reasons they select an auto service provider. And, while price ranks lower, consumers are increasingly looking for a good deal, according to research from The NPD Group.
Since the recession, consumer attitudes and behaviors continue to be focused on value, and these deal-driven consumers are exerting their influence in the auto service sector, NPD reports. Automotive retailers and manufacturers have addressed this consumer mindset at the retail level with heavy promotions, including free filter with oil purchase, mail-in rebates, two-for-one pricing, and other deals … and consumers have responded.
According to NPD’s Car Care Track — which monitors purchase behavior details of the DIY and DIFM auto aftermarket and repair consumer — 35 percent of all DIFM auto service transactions were purchased on a deal or at a special price. That’s up from 30 percent in 2007.
And, while familiarity with the outlet, location and trust remain the most important drivers of outlet choice, NPD reports that 14 percent of consumers say a special offer or coupon influenced their decision to choose the outlet on their latest service occasion.
“Consumers will continue to select auto service outlets based on their familiarity with the outlet, its location and their trust of the service. But price matters, too,” explained David Portalatin, NPD’s auto aftermarket industry analyst. “In today’s demanding environment, more do-it-for-me consumers are expecting the best of both worlds: They want to know they are investing in quality service and feel like they got a bargain at the same time.”
Point Of View: ‘Be Car Care Aware’ Campaign Truly An Industry Success Story
In this space, as well as in our sister newsletter, The Greensheet, we explore the many shortcomings of this industry, poking at our soft spots in hopes of making us all better in how we serve the North American vehicle owner. We don’t shy away, though, from pointing out our successes as well, noting where we have made progress, where the consumer is better served.
Fundamentally, one area that has always been of the most serious concern — at least for this writer — is how we are perceived by our service customers, how those who pay the bills feel about the work we do, the service given. Like it or not, our shops are not held in the highest esteem in the minds of most consumers — and I believe this is the one area we need to focus on, the area where improvement can pay dividends throughout all levels of the industry, the place where we can do the most good across the board.
And, for my taste, the work that has been done over the last few years by those associated with the Car Care Council and the “Be Car Care Aware” campaign has made monumental progress in educating the driving public about the value of preventative maintenance, as well as representing what is good about the service sector of the independent aftermarket — the interface where the consumer comes in intimate contact with our industry.
With very limited resources, some of the best and brightest in our industry have come together through the “Be Car Care Aware” campaign and have put together programs and material that positively promote our industry through consumer education and the value of regular vehicle care. Starting with the “Car Care Guide,” this group of industry volunteers crafted a 60-page vehicle maintenance reference guide that is an owner’s manual for service and repair that helps any consumer understand the various vehicle systems and what is needed to keep that car or light truck on the road, efficiently and safely carrying Americans to work or play. The guide comes in English, Spanish and French, plus a metric version, and can be easily obtained by aftermarket parts and service facilities to present to consumers as a guide toward maintaining their vehicles. It is also available at the BCCA website at www.carcare.org.
Also at that website are other resources that can help consumers, including car care tips, resources for finding a repair facility, information to help the consumer communicate effectively with the service provider, and, of course, information for both shop owners and consumers concerning the value of car care events. With National Car Care Month in April and Fall Car Care Month in October, consumers have the opportunity to become even more educated about what their prized vehicle needs while our industry, as a whole, has the chance to educate consumers about who we are and what we can do: the long-term solution to the negative perception that this industry has carried for way too long.
As well, the site has several videos that are well-produced and that educate car owners about the service needed to keep their vehicles on the road. One video in particular, “Auto Service & Repair: What to Expect” does an excellent job of leading any consumer through the steps of choosing the right shop, and then receiving the level of service and professionalism they should expect from our industry. In my mind, this should be required watching for any car owner, young or old, and should be playing in every service center waiting room for vehicle owners to see.
Yes, we have many things to work on in making this a better industry, and much left to accomplish to make this the kind of business we all wish it could be. But, while we focus on the work to be done, let’s make sure we note what we have accomplished and support the work being done by those associated with the Car Care Council and the “Be Car Care Aware” campaign.
Gary A. Molinaro
Northwest Automotive Trades Association Joins AASP
The Northwest Automotive Trades Association (NATA) is now an affiliate member of the Alliance of Automotive Service Providers (AASP). The addition of NATA expands AASP to 12 state and regional associations representing more than 9,000 aftermarket businesses in 24 states around the country.
NATA represents 662 automotive businesses in Oregon and southwest Washington, including collision, repair and transmission shops, as well as auto recyclers, parts suppliers and tow operators.
MAP Canada Moves Under The Administration Of AMRA/MAP
The Automotive Maintenance & Repair Association (AMRA) and the Motorist Assurance Program (MAP) have taken over the administration of the Motorist Assurance Program of Canada. MAP Canada, which has been operated by AIA Canada since 1998, is based on the MAP program in the United States.
MAP Canada offered accreditation to facilities in the Canadian automotive repair and service industry, as well as membership to manufacturing and supply companies that support the industry.
AMRA/MAP intends to absorb MAP Canada members as soon as possible. Canadian service providers, such as Active, Green + Ross, Canadian Tire Corp. and Midas International, will continue to train their employees in a similar fashion, with a few changes, as they make progress toward having their facilities meet MAP participation guidelines.
R.O. Writer Software Gets Integrated With Motorcraft eCounter
Motorcraft’s aftermarket e-commerce technology, eCounter, is now compatible with R.O. Writer shop management software. Linking to eCounter directly from within the R.O. Writer shop management system makes it possible for shops using Epicor data to connect to eCounter from repair orders, allowing them to interact with the electronic catalog, buyer’s guide and interchange to perform stock checks and order parts at their specific pricing from parts distributors who also use eCounter.
Stan Gowisnock, the president and CEO of DST Inc., said product orders will seamlessly transfer onto customer repair orders because both eCounter and R.O. Writer are built around data from Epicor. This will enhance shop operations by helping to reduce costs and improve accuracy.
eCounter is built on DST TurboParts technology.
Mudlick Mail Adds Call-Tracking Service
Acworth, GA-based Mudlick Mail, a provider of direct mail services for the automotive service industry, is adding another new item to its offerings. The company now provides customers with a free call-tracking service that logs and records calls generated by that client’s direct mail program. Using the program, Mudlick Mail clients can track the number of calls received and assess how well their employees are responding to customer inquiries.
Here’s how it works … Mudlick Mail clients receive a local phone number based on the location that is listed on their direct mail offers. Each call that comes into the line is recorded for evaluation. Clients can then log into a website and scan the call counts, listen to individual calls and forward them to staff for review.
CustomerLink Hires New VP Of Marketing
CustomerLink Systems has hired Kennan Bridge as its new vice president of marketing. In addition to overseeing the marketing division at CustomerLink, he has a role in product development. Bridge previously was the owner and president of SmartGrowth Consulting, a business he founded in 2004. Bridge’s background includes executive operations and marketing positions for VSP, Pride Industries and Sierra View General Contracting.
Roseville, CA-based CustomerLink provides automated marketing programs to automotive repair facilities and other service industries.
WLR Automotive Opens Mighty Auto Parts Franchise In Maryland
Mighty Auto Parts of Maryland, a franchise of Mighty Distributing System of America, is open. The business serves customers in Carroll, Frederick, Howard, Montgomery and Washington counties. Mighty Auto Parts of Maryland is owned by WLR Automotive, a Frederick, MD-based company that operates 16 vehicle service centers (The Lube Center), car wash (The Auto Spa) and repair facilities (The Auto Repair) around Maryland and Pennsylvania.
American Tire Distributors Buys Consolidated Tire & Oil
Charlotte-based American Tire Distributors (ATD), one of the nation’s largest independent suppliers of tires to the replacement tire market, has acquired Consolidated Tire & Oil, which services more than 500 customers from three Louisiana distribution centers located in Baton Rouge, Slidell and Lafayette. This acquisition strengthens ATD’s market position in the state.
ATD now operates 97 distribution centers, servicing 45 states.
RMA Survey Underscores Drivers’ Lack Of Tire Care
A phone survey of 1,000 U.S. drivers, sponsored by the Rubber Manufacturers Association (RMA), shows that only 17 percent of vehicles have four properly inflated tires and only 15 percent of drivers know how to properly check tire pressure. Additionally …
• 62 percent of drivers don’t know where to find the correct inflation pressure for their vehicle’s tires;
• 43 percent don’t know that tires should be checked before driving, rather than after driving; and
• 60 percent wash their cars once a month, but only 15 percent properly check tire pressure once a month.
Another RMA-sponsored survey of more than 6,000 vehicles found that 55 percent of vehicles had at least one under-inflated tire and 15 percent had at least one tire under-inflated by 8 psi.
MAP Expanding Brake Safety Awareness Promo To Entire Month Of August
Goodbye, Brake Safety Awareness Week … Hello, Brake Safety Awareness Month. The Motorist Assurance Program (MAP) is expanding this annual promotion starting this August. During Brake Safety Awareness Month, more than 9,200 participating facilities will offer inspections, educate vehicle owners on key undercar systems, provide complimentary automotive troubleshooting material and answer consumers’ preventive maintenance questions. Consumers can find participating shops at the MAP website.
ASA Testifies In Support Of Change In Texas Franchise Tax Law
ASA members testified before the Ways & Means Commission of the Texas House of Representatives earlier this month in support of legislation designed to address inequity in the state’s franchise tax code. The bills — companion pieces of legislation in the House and Senate — would allow automotive repair shops to be taxed at the same rate as dealers, parts stores and tire stores.
ASA points out that new and used car dealerships in Texas are taxed at half the rate of independently owned automotive repair and collision businesses because the tax code classifies dealership sales as “retail” and allows their service and repair business to be included under that banner. Repair shops operated by tire companies, parts stores and mass-merchandisers are treated like dealerships.
Speedemissions Secures $2-Million Credit Line; Promises New Strategic Initiatives
Speedemissions Inc. — a vehicle emissions testing and safety inspections company with locations in Atlanta, Houston, St. Louis and Salt Lake City — has landed a $2-million credit line with TCA Global Credit Master Fund LP. This allows the company to borrow as much as $2 million in order to, among other things, pay trade payables and provide for working capital. This loan agreement replaces an existing $100,000 revolving line of credit loan agreement with Regions Bank.
“This credit line with TCA will allow us to execute the new strategic initiatives, which we expect to announce prior to the end of the second quarter; improve store operations; and move the company toward increasing revenue and profitability,” said Rich Parlontieri, president and CEO of Speedemissions. “What’s also exciting is that we should be able to properly market our CARbonga-SRI app.”
CARbonga is an iPhone/iPad/iPod Touch application designed to test the functionality of a car’s operating systems.
The terms of the loan agreement include an initial maturity date of six months or Dec. 8, 2012, with an automatic six-month extension to June 8, 2013, subject to terms and conditions contained in the agreement. The loan is collateralized by Speedemissions’ inventory, accounts, equipment, general intangibles and fixtures.
Speedemissions has already made an initial draw of $350,000 under the new loan agreement, according to a filing with the SEC.
This comes at a time when the company is working on some new initiatives to deal with increased competition following revisions in emission-testing laws in some of its markets. In attempt to mitigate the plethora of new competitors, Speedemissions has launched a program to cut operating expenses at both the corporate and store level, which is expected to involve the closure of underperforming stores. The company also has stepped up the sale of products such as windshield wipers and light bulbs, and plans to add other automotive services sometime this year.
USA Recycling Industries Expanding Used Oil Filter Recycling Operations
USA Recycling Industries (Reading, PA), a scrap metals recycler, has signed a letter of intent (LOI) to purchase 51 percent of Lucas Lane, a Pennsylvania-based recycler of used oil filters. USA Recycling Industries CEO Vincent Smith stated that adding the collection and disposal of used oil filters will add significant revenue to the company’s operations in the near term. “The Lucas Lane LOI, combined with our direct end-user-consumer relationships with used motor oil re-refiners, solidifies our competitive advantage,” Smith said.
In related news, USA Recycling has entered into an oil filter collection and disposal services agreement with Redwood Recycling of Staten Island, NY. Redwood serves businesses in the New York metropolitan and surrounding areas.
Gates Releases App To Analyze Belt Wear
Gates Corp. has launched a smartphone application called the Parts Image Capture Gauge Belt Wear App that’s designed to deliver accurate measurement and evaluation of serpentine belt wear. Gates PIC Gauge uses a photograph taken with the phone’s built-in camera, which is then analyzed by software to determine the degree of rib wear detected.
The analysis returns one of three results: within specifications (green), wear detected (yellow) or replace belt (red). Gates says belt wear measurements can be captured from any automotive or heavy-duty K-section serpentine belt.
The app is available for the iPhone and can be downloaded from the Apple App Store.
New Bendix Brake App Provides Parts Information, Images
Honeywell Friction Materials, in cooperation with ShowMeTheParts, has released a Bendix catalog application for smartphone users. The app allows users to access images, specs and attributes for brake pads, shoes, drums and rotors. It also has the ability to search Bendix part numbers and provide buyer’s guide information, as well as the Bendix equivalents for other brands of replacement parts.
The Bendix brake parts app is free and available to download in the Apple and Android marketplaces. An HTML5 version also is available for tablets and larger mobile devices at www.showmetheparts.com/bendixmobile.
AASA Seeks Repair Pro Input On ‘Know Your Parts’ Informational Website
“Know Your Parts,” the industry awareness campaign initiated by AASA, has launched a website for repair professionals (www.KnowYourParts.com) and is seeking input from repair pros. AASA is soliciting information about the parts information that is more valuable to them in their businesses, including parts categories, and the most useful format for the information: videos, photos/illustrations/diagrams, technical guides or webinars.
Verizon Reaches Deal To Acquire Hughes Telematics
Verizon Communications has a deal in place to acquire Hughes Telematics for $12 per share in cash, or a total of $612 million. The transaction would expand Verizon’s capabilities in the automotive and fleet telematics marketplace. The merger is expected to close in the third quarter.
Verizon plans to retain the existing management team and operate the new unit as a subsidiary within Verizon and operated as part of its Verizon Enterprise Solutions group. The business will continue to be headquartered in Atlanta.
Mitsubishi Chooses Agero As U.S. Roadside Assistance Provider
Mitsubishi Motors North America has selected Agero (formerly Cross Country Automotive Services and the ATX Group) as the exclusive roadside assistance provider for all new Mitsubishi vehicles purchased in the United States. This gives Mitsubishi owners access to 24-hour emergency roadside assistance for five years from the date of purchase, regardless of mileage. This includes towing to the nearest Mitsubishi retailer, as well as jump-starts, flat-tire service and lockout assistance.
‘Click And Clack’ Are Stepping Away From The Mic
Tom and Ray Magliozzi, the technicians who host the “Car Talk” radio program on National Public Radio (NPR), are calling it quits after 1,200-plus shows. As of this fall, they will no longer record new programs. However, the weekly call-in series will continue to be distributed by NPR drawing on material from show archives.
The Magliozzis — as known as “Click and Clack the Tappet Brothers” — have been taping “Car Talk” at WBUR in Boston for 35 years. The show has been on NPR member stations for the last 25 years.
They will still write their twice-weekly “Dear Tom and Ray” column and stay active online, including on Facebook.
Group 1 Automotive Reports 7.1% Rise In Same-Store Customer-Pay Parts & Service Sales
Houston-based Group 1 Automotive — which operates 112 dealerships and 28 collision centers in the United States and United Kingdom — saw its parts and service sales increase 9.3 percent to $213.10 million in the first quarter of 2012. Gross profit from parts and service sales rose 7.7 percent to $111.29 million.
The sales increase was primarily driven by higher customer-pay parts and service revenue. Group 1 also realized increases in its wholesale parts and collision segments. These increases more than offset a 4.3-percent decline in warranty parts and service revenue.
Same-store parts and service revenue was up 2.3 percent year-over-year. That breaks down as a 7.1-percent increase in customer-pay parts and service sales, a 10.8-percent rise in collision revenue and a 2.6-percent increase in wholesale parts sales, partially offset by a 12.4-percent drop in warranty parts and service revenue. Warranty parts and service revenue was down because of a general decrease in recall activity.
Sonic Automotive’s Q1 Parts Sales Up 5.2%, Service Sales Up 4.4%
Sonic Automotive came though with $301.75 million in parts, service and collision repair (fixed operations) revenue in the first quarter of 2012 — up 5.1 percent over the previous year. Fixed operations gross profit increased 3.9 percent to $147.06 million.
Parts revenue increased 5.2 percent to $160.17 million, with gross profit up 2.5 percent to $50.86 million. Service revenue rose 4.4 percent to $128.91 million, with gross profit up 4.3 percent to $89.19 million. Collision repair revenue increased 11.4 percent to $12.67 million, with gross profit up 10.4 percent to $7.01 million.
Overall customer-pay revenue was up 8.6 percent, and wholesale parts revenue rose 12.9 percent. Warranty revenue was down 12.5 percent.
Charlotte-based Sonic Automotive is one of the largest automotive retailers in the United States with 118 dealerships across 15 states, as well as 24 collision repair centers.
Lithia Motors’ Wholesale Parts Revenue Grew 23.6%, Customer-Pay Revenue Up 20.6% In Q1
Lithia Motors of Medford, OR saw its service, body and parts sales rise 17.2 percent to $86.45 million in the first quarter of 2012. Wholesale parts revenue increased 23.6 percent to $16.61 million, while customer-pay revenue grew 20.6 percent to $48.09 million. Body shop revenue rose 13 percent to $8.43 million, and warranty revenue increased 2.6 percent to $13.32 million.
Same-store service, body and parts sales were up 4.7 percent on a year-over-year basis. Same-store customer-pay sales were up 6.3 percent as Lithia focused on retaining customers through competitively priced routine maintenance offerings and increased marketing efforts. Same-store wholesale parts sales were up 11 percent, while body shop was up 12.9 percent.
Same-store warranty sales were down 11.8 percent. Management attributed the drop to declining units in operation from 2008, 2009 and 2010, as well as increased warranty work a year ago associated with Toyota recalls.
Service, body and parts gross profit increased 16.3 percent to $41.59 million.
Lithia is the ninth largest automotive retailer in the United States with 83 locations across 11 states.
AutoNation’s Customer-Pay Revenue Rose 7% In Q1
AutoNation Inc. saw its parts and service sales increase 5.2 percent to $599.90 million and parts and service gross profit rise 2.3 percent to $250.20 million in the first quarter of 2012. Same-store parts and service sales were up 4 percent.
Customer-pay revenue was up 7 percent, representing the largest year-over-year percentage increase in recent years and the seventh consecutive quarter of year-over-year increases in customer-pay revenue. Warranty revenue was down 9 percent.
Billed as America’s largest automotive retailer, AutoNation operates 260 new vehicle franchises, which sell 32 brands across 15 states.
Asbury Automotive’s Customer-Pay Revenue Up 7% In Q1
The Asbury Automotive Group, which operates 79 dealerships across 10 states, saw its parts and service gross profit increase 6.7 percent in the first quarter of 2012. Parts and service revenue came in at $145.10 million — up 2.5 percent year-over-year. The sales increase was primarily due to a 7-percent increase in customer-pay revenue, partially offset by a 15-percent decrease in warranty revenue.
OnStar RemoteLink Passes 14 Million Interactions
Since its debut in 2010, more than 821,000 active users of OnStar’s RemoteLink mobile phone application have had more than 14 million interactions for such services as checking a vehicle’s tire pressure, remote-starting a vehicle and getting updates on a vehicle’s oil level. The app, which has been available to iPhone and Android users, is now available for select Blackberry users as well.
Kansas Team Claims Ford/AAA Auto Skills Competition Crown
A two-student team from Newton High School in Kansas, consisting of Bryce Banks and Jedediah Redger, won the 2012 Ford/AAA Student Auto Skills competition. Coming in second was Evan Fischbach and Thomas Michaluk of Saline High School in Michigan. The 2012 competition boasted a record number of students, instructors and schools participating, as well as the highest number of female competitors in event history.
Car Care Council Partners With Dartmouth’s Big Green Bus
The Car Care Council is partnering with Dartmouth College for the Dartmouth Big Green Bus 2012 cross-country road trip this summer. Thirteen Dartmouth students are touring the nation on a veggie-powered coach bus in an effort to build enthusiasm for community involvement through environmental action. This student-run initiative will travel 12,000 miles through 30 states. More than 40 stops are planned.
The council’s car care guide will be distributed to motorists during stops.
News Briefs 06/20/12
• The Bosch Car Service program in Canada has reached 100 members. The program was revitalized in Canada last year.
• The International Automotive Technicians Network (IATN) waveform and file library has exceeded 30,000 vehicle-specific files. The items are uploaded by IATN members based on their real-world automotive repair experiences. The library includes waveforms, scan data images and component photos.
• Registration is now open for Automotive Service & Repair Week (ASRW), which is comprised of the CARS and NACE shows. ASRW is scheduled for Oct. 10-13 at the Morial Convention Center in New Orleans. Discounts on Super Passes and Expo Passes are available through June 30. For more information, click here.
• Spectra Premium Industries has released a seven-video series on radiator installation on YouTube at www.youtube.com/spectrapremiumvideos.
• A bill is before the North Carolina senate seeking to eliminate annual motor vehicle safety inspections in the state. MEMA has come forward in opposition to the proposed legislation.
• OTC is partnering with its distributors to provide local training and simulations to technicians wanting to learn more about the latest J2534 reprogramming (reflash) and coding techniques.
• Mitchell 1 has launched a new website for its ProDemand repair information software at www.ProsDemandIt.com.
• Carstar Auto Body Repair Experts has added eight independent collision centers to its multi-store operator (MSO) network since the start of the year.
• Chief Automotive Technologies is celebrating its 40th anniversary this year. The company makes vehicle frame-pulling equipment, computerized measuring systems and frame specifications.
• New Shockwave-equipped Rotary Lift SmartLift in-ground lifts and two-post surface lifts have been approved by such vehicle manufacturers as Chrysler, Ford, General Motors, Honda, Hyundai, Nissan, Toyota and VW. These OEMs have included the Shockwave-equipped lifts in their official equipment programs.
• Nissan North America has opened a 31,000-square-foot service training center in Somerset, NJ. The facility will train dealership techs from across the Northeast on both Nissan and Infiniti products. Nissan plans to open similar facilities in Washington, DC and Chicago later this year.