AutoNation returns $ 79 million in P3 funds
The same day AutoNation, the Florida auto retailer, reported a net loss of $ 232 million from operations in the first quarter, its CEO said it had repaid $ 79 million in paycheck protection program loans ( PPP).
Mike jackson Told CNBC’s “Squawk on the Street” movement was due to the fact that a few weeks after the launch of the loan-forgivable initiative, the Treasury Department and Secretary Steven Mnuchin revised the P3 rules after the company had received his forgivable loan.
“As can happen with the government … they changed their minds and basically Treasury and Mnuchin said if you are above a certain height even though you put all i’s and crossed all t and given all the money to your employees, we will. don’t forgive, ”Jackson said. “Well that is a game changer and you can see a lot of companies rethinking P3s.”
Later, in a conference call with analysts, Jackson said AutoNation was clearly eligible for the loan and publicly traded companies were not excluded.
“We are not in a position to go this route,” he said, referring to the refund of the money. “I applaud the original program, but once they turned it into a small business loan program with no clear path to loan cancellation, we took our pending applications back and returned the money we had received so far. ”
Founded in 1996, the company has more than 360 points of sale. As of January 1, AutoNation had 26,000 employees. Jackson said the pandemic forced the company to lay off 7,000 employees, or 27% of its workforce, in March.
In his income report, the company declared $ 1.4 billion in cash, including over $ 750 million in cash and approximately $ 650 million in availability on our May 8 revolving credit facility.
Year over year, comparable store sales are down 52% in the first 10 days of April and 19% in the last 10 days of the month. When the entire month of April is compared to the same month a year ago, sales are down 37%.
First quarter adjusted net operating income was $ 82 million, or $ 0.91 per share, compared to adjusted net income from continuing operations of $ 86 million, or $ 0.95 per share , during the period of the previous financial year.
Comparable store sales for the first quarter of 2020 were $ 4.7 billion, down 5% from the same period a year ago.
“The COVID-19 pandemic has had a negative impact and is expected to continue to have a negative impact on AutoNation’s operations,” the company said in a statement.
AutoNation joins a handful of companies that have returned P3 same day loans. California shoe company Allbirds was the last major company to return on Friday its PPP loan. Other companies that have repay PPP loans include the Los Angeles Lakers (who grossed $ 4.4 million), Taco Cabana and parent company Pollo Tropical Fiesta Restaurant Group ($ 15 million) and Shake Shack ($ 10 million), among others.