FORT LAUDERDALE, Fla. — AutoNation said Wednesday morning that it expects to see an increase in earnings per share and revenue for the first quarter 2010, and also announced that it plans to amend and extend its credit agreement.

Moreover, the company unveiled a senior notes offering and announced a debt tender offer.

As far as projected first-quarter results, AutoNation estimates that earnings per share from continuing operations will be between $0.29 and $0.32, up from the year-ago period, when adjusted EPS from continuing operations was $0.22.

Officials noted that "this press release contains a non-GAAP financial measure, adjusted earnings per share from continuing operations for the first quarter of 2009, which excludes from GAAP earnings per share from continuing operations for the same period the impact of approximately $0.04 per share relating to a gain on senior note repurchases and approximately $0.03 per share relating to a net gain on asset sales and dispositions."

Thus, AutoNation's GAAP earnings per share from continuing operations in the year-ago period were $0.30.

Continuing on, first-quarter revenue is expected to reach roughly $2.8 billion, up from $2.4 billion in the year-ago period.

Used-vehicle sales are projected to climb 12 percent to approximately 38,000 vehicles sold, while new-vehicle sales are expected to total around 45,000 units, roughly an 18-percent year-over-year increase.

"We are pleased with our performance in a recovering but historically weak auto retail market. We saw a continuation of the gradual industry recovery in the first quarter of 2010," shared Mike Jackson, chairman and chief executive officer of AutoNation.

Moving along, AutoNation said it is trying to gain approval from its existing lenders to amend and extend its term loan and revolving credit facility. The slated expiration for this is July 18, 2012.

AutoNation is asking to extend the maturity date to July 18, 2014 for lenders that agree to the extension.

"For the extended commitments, the amended credit facility will offer a new leverage-based pricing grid and an increase in the interest rate on borrowings generally from LIBOR plus 0.875 percent to LIBOR plus 2.25 percent," officials explained.

Meanwhile, it is projected that the term loan facility size is going to be cut from $600 million to approximately $520 million, and the revolving credit facility size is predicted to be reduced to roughly $616 million, down from $700 million.

"The financial covenants contained in the existing credit facility are also expected to be amended in certain respects, including an increase in the maximum leverage ratio from 2.75x to 3.25x," AutoNation explained.

"The company expects the credit facility amendment and extension to be completed on or about April 14, 2010, subject to required lender consents and other standard conditions," officials added. "A majority consent is required to amend the existing credit facility, and the lead and other lenders under the existing credit facility, representing more than 50 percent, have already committed to provide their consents to the amendment."

They continued: "The amendment and extension of the credit facility, together with the senior note offering and debt tender offers announced today, are anticipated to be dilutive to full year 2010 adjusted EPS by approximately $0.06, excluding the effect of non-recurring transaction expenses and any share repurchases or other uses of capital in 2010."

Offering his commentary on the proposed amendment, Jackson said it will bolster the company's financial position.

"When completed, the transactions announced today will significantly enhance our financial strength and flexibility by extending our debt maturities, increasing our available liquidity, lowering our exposure to interest rate increases and providing additional flexibility to manage our business and optimize capital allocation," Jackson stated.

Cash Tender Offers

Continuing on, AutoNation discussed its tender offer in more detail. The company said it has begun tender offers to buy for cash:

—Any and all of its outstanding Floating Rate Senior Notes due 2013 in an aggregate principal amount of $146.1 million;

—Any and all of its outstanding 7 percent Senior Notes due 2014 in an aggregate principal amount of $132.6 million.

"In connection with the offers, holders of the notes are being solicited to provide consents to certain proposed amendments to the indenture for the notes that would eliminate most of the restrictive covenants and certain events of default contained in the indenture and shorten the notice periods required to undertake an optional redemption of either series of Notes," officials explained.

Unless extended by AutoNation, the deadline to consent is 5 p.m. (EST) on April 13, and the offers expire at 11:59 p.m. (EST) on April 27.

The withdrawal deadline is either 5 p.m. (EST) on April 13 (unless extended) "or "the date and time that the applicable supplemental indenture relating to the proposed amendments is executed by the Company, the subsidiary guarantors and the note trustee," whichever one of these happens first.

Obviously, Tendered Notes can be withdrawn any time before or at the withdrawal deadline, but not after.

Officials explained that "as described in more detail in the offer to purchase and consent solicitation statement and related letter of transmittal and consent, which will be distributed to noteholders promptly, the total consideration for each $1,000 principal amount of Floating Rate Notes validly tendered prior to the Consent Deadline and accepted for purchase by AutoNation will be $1,010.00, and the total consideration for each $1,000 principal amount of Fixed Rate Notes validly tendered prior to the Consent Deadline and accepted for purchase by AutoNation will be $1,035.00."

They added: "The foregoing total consideration for the notes includes a consent payment equal to $30 per $1,000 principal amount of the Notes tendered. Holders must validly tender their Notes on or before the Consent Deadline in order to be eligible to receive the total consideration, which includes the consent payment.

"Holders who validly tender their notes after the consent deadline and before the expiration of the offers will only be eligible to receive an amount equal to the applicable total consideration minus the consent payment," AutoNation continued. "Additionally, holders whose notes are purchased pursuant to the offers will receive any accrued but unpaid interest up to, but not including, the applicable payment date for the notes." 

They continued: "If the company elects to exercise the early purchase option with regard to the offers, the company expects the early acceptance date for the offers to be promptly after the later of the applicable consent deadline and withdrawal deadline, provided that the conditions to the offers and the related consent solicitations have been satisfied or waived.

"Upon the terms and subject to the conditions of the offers, the company will pay for notes validly tendered prior to the applicable early acceptance date on the applicable early payment date, which is expected to be promptly following the applicable early acceptance date," AutoNation noted.

"The company expects the applicable final acceptance date for the offers to be promptly after the expiration time, provided that the conditions to the offers and the related consent solicitations have been satisfied or waived," executives pointed out. "Upon the terms and subject to the conditions of the offers being satisfied or waived, the company will pay for notes validly tendered pursuant to the offers prior to the applicable Expiration Time (or if the Company exercises its early purchase option described above, all such Notes validly tendered after the applicable early acceptance date and prior to the applicable Expiration Time) on the applicable final payment date, which is expected to be promptly following the applicable final acceptance date."

They further stated: "Completion of each of the offers and consent solicitations is subject to the satisfaction of certain conditions, including, but not limited to, receipt of valid tenders and consents from at least a majority in principal amount of the notes that are the subject of such offer and receipt of debt financing in an amount that will be sufficient to purchase the notes tendered in the offers. Neither offer is conditioned upon completion of the other offer. The offers and consent solicitations may be amended, extended or, under certain conditions, terminated. The company reserves the right to make changes to one offer without making the corresponding changes to the other offer."

Global Bondholder Services Corp. is serving as the depositary and information agent for the offers and consent solicitations. Banc of America Securities LLC, J.P. Morgan Securities Inc. and Wells Fargo Securities, LLC are the dealer managers.

"The offer to purchase and consent solicitation statement, letter of transmittal and consent and related documents will be distributed to noteholders promptly," officials pointed out. "Noteholders with questions or who would like additional copies of the offer documents may call the information agent, Global Bondholder Services Corporation, toll-free at (866) 470-3900. (Banks and brokers may call collect at (212) 430-3774.)"

Other phone numbers are as follows:

—Banc of America Securities LLC: (888) 292-0070 (toll-free), (980) 388-9217 (collect)

—J.P. Morgan Securities Inc. (866) 834-4666 (toll-free), (212) 834-3424 (collect)

—Wells Fargo Securities, LLC (866) 309-6316 (toll-free), (704) 715-8341 (collect)

Officials emphasized that "this news release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell the company's floating rate notes due 2013 or 7 percent Senior Notes due 2014.

"The offers and the consent solicitations are being made only pursuant to the offer to purchase and consent solicitation statement, letter of transmittal and consent and related materials that the company will be distributing to noteholders promptly," they added. "Noteholders and investors should read carefully the offer to purchase and consent solicitation statement, letter of transmittal and consent and related materials because they contain important information, including the various terms of and conditions to the offers and the consent solicitation."

Senior Notes Offering

Continuing on, AutoNation discussed its senior notes offering in more depth. The company said Wednesday that it plans to start a public offering of $400 million aggregate principal amount of senior unsecured notes.

AutoNation plans to put the net proceeds toward a number of items. These include paying "the consideration required in connection with the Company's cash tender offers, and related consent solicitations, for any and all of its outstanding Floating Rate Notes due 2013 and any and all of its outstanding 7% Senior Notes due 2014, including any applicable accrued and unpaid interest on such notes, to reduce borrowings under the term loan facility of the company's existing credit agreement, to pay transaction fees and expenses and for general corporate purposes."

Serving as joint book-running managers of the debt offering are Banc of America Securities LLC, J.P. Morgan Securities Inc. and Wells Fargo Securities, LLC.

Meanwhile, co-managers will be Comerica Securities, Inc., SunTrust Robinson Humphrey Inc., Santander Investment Securities Inc., Fifth Third Securities, Inc., Mizuho Securities USA Inc. and Mitsubishi UFJ Securities (USA), Inc.

AutoNation emphasized that it is making the offering "solely by means of a prospectus supplement and accompanying prospectus, which has been filed with the SEC."

Visit www.sec.gov to obtain a copy of the prospectus for the offering, or contact:

Banc of America Securities LLC

Attention: Prospectus Department

One Bryant Park, New York, NY, 10036

Phone: (800) 294-1322

e-mail: dg.prospectus_distribution@bofasecurities.com 

J.P. Morgan Securities Inc. 

4 Chase Metrotech Center, CS Level

Brooklyn, NY 11425

Attention: Prospectus Library

Tel: (718) 242-8002 or (866) 430-0686 

Wells Fargo Securities, LLC

301 S College St, 6th Floor, Charlotte, NC 28202

Attention: High Yield Syndicate

Phone: (704) 715-7035. 

"This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, and shall not constitute an offer, solicitation or sale in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful," officials noted.