GrowStrategically

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% Svc

% Parts

% Units & F&I

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Low Focus on Major Unit Sales--->

4% of dealers greater than 80% Sales

12% of dealers less than 10% Sales

Percent of Total Store Gross Margin Contributed by Each Department58 Dealerships, $479 million in sales, January 2010 to August 2011

Ordered by Units + F&I Departments Contribution Margin Rate

High focus on Major Unit Sales

Grow Strategically

by

Hal EthingtonADP Lightspeed

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% Units & F&I

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Low Focus on Parts Sales--->

1 dealer at 70% of Total Margin from Parts

5 Dealers less than 14% of Total Margin from Parts

<---High Focus on Parts Sales

Percent of Total Store Gross Margin Contributed by Each Department58 Dealerships, $479 million in sales, January 2010 to July 2011

Ordered by Parts Department Contribution Margin Rate

Grow Strategically

by

Hal EthingtonADP Lightspeed

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% Units & F&I

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Low Focus on Service Sales--->

1 dealer at 65% of Total Margin from Service

3 Dealers less than 10% of Total Margin from Service

<---High Focus on Service Sales

Percent of Total Store Gross Margin Contributed by Each Department58 Dealerships, $479 million in sales, January 2010 to July 2011

Ordered by Service Department Contribution Margin Rate

Grow Strategically

by

Hal EthingtonADP Lightspeed

Grow Strategically

by

Hal EthingtonADP Lightspeed

Average $ Parts Counter Ticket109 Dealerships, 19 months ended July 2011

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

6% of dealers over $200 per Ticket

6 % of dealers average $58 per Ticket

48% of dealers average $81 per ticket

40% of dealers average $144 per Ticket

<------ Dealerships ranked high to low ------>

Grow Strategically

by

Hal EthingtonADP Lightspeed

0%

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10% of Dealers below 25% Gross Margin

Average Gross Margin % Parts Counter Tickets

109 Dealerships, 19 months ended July 2011

10% of Dealers above 60% Gross Margin

27% of Dealers between 40 – 60 % Gross Margin

53% of Dealers between25 – 40 % Gross Margin

<------ Dealerships ranked high to low ------>

Recast Ticket Count Avg Sale Avg GM $ Sales $ Margin $ Margin

Per Store

Low at Low 327,000 $ 58 29% $ 18,898,000 $ 5,403,000 $ 50,000

Low at High 327,000 $ 144 54% $ 47,251,000 $ 25,318,000 $ 232,000

Difference $ 87 25% $ 28,353,000 $ 19,915,000 $ 183,000

Recast Low Group at High Group Rates for Average Parts Ticket and Gross Margin %

(What If…?)

Or, $9,600 per month per store.

Session Title

Low stores, selling at the average rate of High stores, would (with no new customers) each produce

$9,600 More per Store Per

Month.

in Gross Margin for the 19 months.

Hmm…

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43.9

9.6

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7 Coastal Dealers, Ocean-going Vessels Avg 23.8 hrs/ro

15 inland dealers, top per-formers. Avg 6.1 hrs/RO

40 Mid-range inland dealers. Avg 3.3 hrs/RO 21 dealers at

2.2 hrs/RO

Average Hours per Repair Order84 Dealers, 132,000 Repair Orders, $82 million in Sales

January 2010 - August 2011

Grow Strategically

by

Hal EthingtonADP Lightspeed

RO Count Hrs/RO Lab Sales Lab $ GM $ GM/Store

Low at Low 37,327 2.2 $12,300,000 $6,745,000 $80,300

Low at High 37,327 6.1 $34,000,000 $18,700,000 $223,000

Difference 3.9 $21,739,000 $12,000,000 $142,000

Recast Low Group at High Group Rates for Average Hours sold per Repair Order

(What If…?)

Or, $7,500 per month per store.

Grow Strategically

by

Hal Ethington ADP Lightspeed

-

0.5

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r

Oce

an G

oing

Dea

lers

20 top Dlrs avg ratio 1.7 : 1

36 Mid Dlrsavg ratio 1:1

20 Low Dlrsavg

ratio .59:1

Marine Dealers Parts to Labor Ratio84 Dealers, 132,000 RO’s, $82 million in Sales

January 2010 to August 2011

RatioPts to Lab

Lab Sales Parts SalesParts

MarginPts MarginPer Dealer

Low at Low .59 to 1 $10,500,000 $6,200,000 $2,500,000 $ 29,400

Low at High 1.7 to 1 $10,500,000 $17,900,000 $9,700,000 $ 115,000

Difference $11,700,000 $7,200,000 $ 85,700

Recast Low Group at High Group Rates for Parts to Labor Ratio on Repair Orders

(What if…?)

Session Title

Low Stores are currently selling 59¢ in parts for each $1 in labor. High stores are

selling $1.70 in parts for each Labor dollar.

If Low stores can improve to the High Store rate, they will sell $11.7 million more

in parts, and earn $7.2 million more in margin.

That’s $85,700 in 19 months per store, or $4,500

in margin per month.

Hmm.

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0.434

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Mid Group31 dlrs, avg 13% GM

Low Group28 dlrs, avg 8% GM

<--- Dealership GM % from High to Low --->

Top Group20 Dlrs, Avg 23% GM

New Major Unit Gross Margin %94 Dealers, $365 million in Sales

January 2010 to August 2011

Grow Strategically

by

Hal EthingtonADP Lightspeed

Unit Count

Tot Sales Tot CGS Tot Margin GM %

Low at Low 7,653 $98,200,000 $90,600,000 $7,600,000 7.8%

Low at High 7,653 $118,300,000 $90,600,000 $27,700,000 23.4%

Difference $20,100,000 $20,100,000

Recast Low Group at High Group Rates for New Major Unit Gross Margin

(What if…?)

Per Dealership Gross Margin up $11,200 per Month

Low stores, selling at the average rate of High stores, would (with no new customers) each produce

$11,200 More per

Store

in Gross Margin each month.

Session Title

Do the math…

In Parts, from improvement in Average Ticket and Gross Margin %, you get

$9,600 more Margin

Per month

Grow Strategically

by

Hal EthingtonADP Lightspeed

Grow Strategically

by

Hal EthingtonADP Lightspeed

In Service, from improvement in Hours per RO and Parts to Labor ratio, you get

$4,500 more Margin

Per month

Grow Strategically

by

Hal EthingtonADP Lightspeed

In Major Units, from improvement in Gross Margin %, you get

$11,200 more Margin

Per month

Grow Strategically

by

Hal EthingtonADP Lightspeed

Do The Math:

Parts $ 9,600Service 4,500Unit Sales 11,200

Total Store: $ 25,300

In additional Gross Margin per Month.

Session Title

…and take it home.Do the math,