Grow Strategically

Percent of Total Store Gross Margin Contributed by Each Department 58 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 Ethington ADP Lightspeed

Percent of Total Store Gross Margin Contributed by Each Department 58 Dealerships, $479 million in sales, January 2010 to July 2011 Ordered by Parts Department Contribution Margin Rate Grow Strategically by Hal Ethington ADP Lightspeed

Percent of Total Store Gross Margin Contributed by Each Department 58 Dealerships, $479 million in sales, January 2010 to July 2011 Ordered by Service Department Contribution Margin Rate Grow Strategically by Hal Ethington ADP Lightspeed

Grow Strategically by Hal Ethington ADP Lightspeed Average $ Parts Counter Ticket 109 Dealerships, 19 months ended July % of dealers average $58 per Ticket 48% of dealers average $81 per ticket 40% of dealers average $144 per Ticket

Grow Strategically by Hal Ethington ADP Lightspeed Average Gross Margin % Parts Counter Tickets 109 Dealerships, 19 months ended July % of Dealers above 60% Gross Margin 27% of Dealers between 40 – 60 % Gross Margin 53% of Dealers between 25 – 40 % Gross Margin

Recast Ticket Count Avg Sale Avg GM $ Sales$ Margin Per Store Low at Low327,000$ 5829%$ 18,898,000$ 5,403,000$ 50,000 Low at High327,000$ 14454%$ 47,251,000$ 25,318,000$ 232,000 Difference$ 8725%$ 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…

Average Hours per Repair Order 84 Dealers, 132,000 Repair Orders, $82 million in Sales January August 2011 Grow Strategically by Hal Ethington ADP Lightspeed

RO CountHrs/ROLab SalesLab $ GM$ GM/Store Low at Low37,3272.2$12,300,000$6,745,000$80,300 Low at High37,3276.1$34,000,000$18,700,000$223,000 Difference3.9$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 Marine Dealers Parts to Labor Ratio 84 Dealers, 132,000 RO’s, $82 million in Sales January 2010 to August 2011

Ratio Pts to Lab Lab SalesParts Sales Parts Margin Pts Margin Per Dealer Low at Low.59 to 1$10,500,000$6,200,000$2,500,000$ 29,400 Low at High1.7 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.

New Major Unit Gross Margin % 94 Dealers, $365 million in Sales January 2010 to August 2011 Grow Strategically by Hal Ethington ADP Lightspeed

Unit Count Tot SalesTot CGSTot MarginGM % Low at Low7,653$98,200,000$90,600,000$7,600,0007.8% Low at High7,653$118,300,000$90,600,000$27,700, % Difference$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

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 Ethington ADP Lightspeed

Grow Strategically by Hal Ethington ADP 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 Ethington ADP Lightspeed In Major Units, from improvement in Gross Margin %, you get $11,200 more Margin Per month

Grow Strategically by Hal Ethington ADP Lightspeed Do The Math: Parts $ 9,600 Service 4,500 Unit Sales 11,200 Total Store: $ 25,300 In additional Gross Margin per Month.

Session Title …and take it home.Do the math,