netrashetty
Netra Shetty
Antec, Inc. is an American-based maker of PC components and accessories.[1] Antec's principal products are computer cases and power supplies. Antec also offers PC cooling products and notebook accessories.[1] Founded in 1986, the company is headquartered in Fremont, California, U.S.A., with additional offices in Rotterdam, the Netherlands.[1] Antec products are sold in over 40 countries.[1
VCA Antech (WOOF) is the leading provider of pet health care services in the US with a nationwide clinical laboratory system and over 435 free-standing animal hospitals. VCA Antech achieved its current reputation in animal health care industry by acquiring and managing high quality veterinary practices and providing preeminent diagnostic laboratory services for animal hospitals across the country.
The Company provides veterinary services and diagnostic testing to support veterinary care. It also sells diagnostic imaging equipment, and other medical technology products and related services. Its network of veterinary diagnostic laboratories provides testing and consulting services used by veterinarians in the detection, diagnosis, evaluation, monitoring, treatment and prevention of diseases and other conditions affecting animals. In addition, it provides pharmaceutical products and performs a variety of pet wellness programs, including health examinations, diagnostic testing, routine vaccinations, spaying, neutering and dental care. Its medical technology business sells ultrasound and digital radiography imaging equipment. It also provides education and training on the use of that equipment, and consulting and mobile imaging services.
VCA Antech was founded in 1986 under the name "Veterinary Centers of America" in Los Angeles. The founders, Bob L. Antin, Arthur J. Antin, Neil Tauber are all on the board of directors. In 2001 VCA Antech became a publicly owned company. VCA Antech stock is traded on NASDAQ under the symbol "WOOF". WOOF has been growing consistently since its IPO.
Competition
Although WOOF excells in the niche market of animal health care, it also competes in the larger diagnostic testing and diagnostic device markets.
Its mid-size competitors are IDEXX Laboratories (IDXX) and Core Laboratories N.V. (CLB). The larger competitors are Siemens AG (SI), Koninklijke Philips Electronics, N.V. (PHG), Canon (CAJ).
AutoNation, Inc. (NYSE:AN) is the largest automotive retailer in the United States as of December 31, 2009.[1] The company sells new and used cars through its 246 franchises located primarily in U.S. metropolitan areas of the Sunbelt region (Southeast and Southwest United States). The company sells 33 different brands of new cars, including Toyota Motor (TM), Ford Motor Company (F), Honda Motor Company (HMC), General Motors (GMGMQ), Mercedes, BMW, and Nissan Motor (NSANY) made up 96% of its new cars sales.[1]
The company markets its stores under various local brand names, and due to its size relative to a fragmented competitor base (aside from competitor CARMAX (KMX)), AutoNation can leverage its size and scale to achieve cost efficiencies across its stores. However, the company operates in a mature industry and has experienced limited ability to grow via acquisitions, its primary method of growth. Furthermore, the company is negatively affected by rising oil prices as consumers drive less frequently and demand fewer new and used cars and fewer parts for their existing cars.
Company Overview
History
AutoNation was founded in 1996 by billionaire entrepreneur Wayne Huizenga, who also founded Blockbuster (BBI) and Waste Management (WMI). The company initially marketed itself under the AutoNation USA brand, but switched to the local branding strategy around 1999, after years of intense and unsuccessful rivalry with CARMAX (KMX). The company approached the brink of bankruptcy during its race with CarMax to open stores, but survived and began to prosper as competition slowed down and strategies diverged slightly.
Contents
1 Company Overview
1.1 History
1.2 Financials
1.3 Business Segments
1.3.1 New Vehicles (53% of 2009 Total Revenue)
1.3.2 Used Vehicles (23%)
1.3.3 Parts and Services (20%)
1.3.4 Financing and Insurance (3%)
2 Company Specific Trends/Risks
2.1 Dependence on continued financial viability of Auto Makers
2.2 Highly fragmented and very mature market
2.2.1 Economies of Scale and Competitive Advantages
3 Macro Trends Affecting AutoNation
3.1 Rising Oil Prices
3.2 Travel & Hurricanes in the South
3.3 Subprime Delinquencies on Auto Loans
4 Competition and Market Share
4.1 Market Share for Used/New Autos
4.2 Market Share for Auto Parts & Services
5 Footnotes
Financials
For the year 2009, new vehicle sales accounted for 53% of its total revenues, while used vehicle sales accounted for 23%.[1] Autonation sold parts and services, which accounted for 20% of total revenue, while financing and insurance products accounted for the remaining 3%.
For 2009, AutoNation earned a total revenue of $10.76 billion, enabling it to earn a net income of $198 million. Compared to 2008, AutoNation's total revenues declined, due largely to the tougher economic climate in 2009. This is evidenced by the fact that in 2009, only 10.4 million new cars were sold in the entire United States compared to 13.2 million in 2008.[2]
Business Segments
The company earns revenues through four different ways. They are: i) Sale of new vehicles, ii) Sale of used vehicles, iii) Parts and services for vehicles, and iv) Financing and insurance for vehicles.
New Vehicles (53% of 2009 Total Revenue)
This segment earned total revenues of $5.7 billion in 2009, a significant decline from its 2008 revenues of $7.4 billion.[3] However, despite earning the majority of its revenues from new car sales, this segment actually has low margins. In 2009, New Vehicles only earned 20% of its gross profit.[3]
Used Vehicles (23%)
AutoNation's used vehicle sales totaled $2.5 billion in 2009, a decline from its 2008 sales of $3.1 billion.[3] This segment earns higher margins than new vehicles, as it posted 11.9% of the company's gross profit despite only accounting for 23% of total revenues.
Parts and Services (20%)
AutoNation's parts and services segment is its highest earner in terms of gross profit, accounting for 48.5% of its gross profit. In 2009, this segment posted $2.1 billion in revenues, earning $935 million in gross profofits.[3]
Financing and Insurance (3%)
The financing and insurance segment earned total revenues of $351 million in 2009.
Company Specific Trends/Risks
Dependence on continued financial viability of Auto Makers
Vehicles made by General Motors (GM) and Ford Motor Company (F) constitute 33% of the AN's sales, and as American automakers struggle to remain competitive and financially viable, AutoNation is at risk of materially adverse after-effects.[4] Each of the "Big Three" (Ford, GM, and Daimler Chrysler) face substantial on and off-balance sheet liabilities, significant losses, and stiff competition from more cost-effective and successful competitors abroad, like Toyota Motor (TM) and Honda Motor Company (HMC). If any of these companies enter bankruptcy, raises prices, cut back production, or otherwise shift their business strategy, AN may experience store closings, drops in revenue at locations carrying GM and Ford brands, or otherwise strained margins or contracted business.
Highly fragmented and very mature market
The automotive retail industry is highly competitive, very fragmented, and mature. Nonetheless, the market (and aftermarket) for cars, parts, and service has steadily, albeit modestly, increasing demand. In the U.S., increases in the number and age of vehicles, number of miles driven annually, licensed drivers, and total number of light trucks (which generally require greater upkeep) provide for a relatively steady and growing automotive market.[5] The American market, however, is mature and unlikely to experience significantly higher rates of growth. Also, increases in the quality of cars may offset the need for secondary purchases of repair equipment and parts, which constitute the majority of AN gross profits.
Economies of Scale and Competitive Advantages
That the automotive retail market is so fragmented is both a challenge and an opportunity for AutoNation. The fragmentation makes for intense price competition for all dealers. However, because of AutoNation's relatively large size, store network, ability to command volume discounts, and ability to market its local brands in unison, the company enjoys something of a cost advantage over competitors. Furthermore, though barriers to entry are small, AN's scale is not easily duplicated in the industry; therefore, competitors may have a difficult time competing with the company's prices.
Macro Trends Affecting AutoNation
Rising Oil Prices
When oil prices increase, drivers limit their mileage and time on the road. In the long run, with sustained high oil prices, cars will assume less wear-and-tear and drivers will replace vehicles less frequently. Furthermore, less wear-and-tear on the road means less business for AN's parts and services segments (their most profitable business).
Travel & Hurricanes in the South
Increased travel and natural disasters like hurricanes can dramatically affect pricing for the company. When Americans travel more, rental companies like Hertz Global Holdings (HTZ) and Avis Budget Group (CAR) demand greater numbers of wholesale used-cars from AutoNation, and bidding intensifies. Similarly, hurricanes, such as those of the magnitude of Katrina and Rita, destroy large quantities of vehicles in the South/Sun Belt, a key market for the company. When replacements are sought in mass, demand drives car prices upward. Positive hurricane pricing is somewhat offset by the fact that the company operates a number of stores in storm-prone regions, placing them at risk of damage and necessitating pricey insurance coverage.
Subprime Delinquencies on Auto Loans
As many auto buyers finance their purchases with loans, there exists a risk of spillover from the subprime lending crisis into the auto-loan business. As homeowners/car buyers struggle to pay both their mortgages and auto-loans, the company may assume losses due to loan delinquencies as well as hampered demand for auto loans going forward.[6]
Competition and Market Share
The domestic industry for automotive new vehicle retail is fragmented and includes approximately 21,500 franchised dealerships and 17 million units sold annually. Similarly, the used vehicle retail industry includes some 45,000 independent used car dealerships and 45 million units sold annually.[7][8] Most are independently owned and operated, mom-and-pop type operations, as opposed to the AutoNation and CARMAX (KMX) roll-up, large-scale, parent company model.
Market Share for Used/New Autos
AutoNation's largest used-car competitor is CARMAX (KMX), which operates 77 retail superstores in 36 metropolitan markets and focuses on the highly fragmented used car market instead of the new vehicle market.
Market Share for Auto Parts & Services
In the parts market, the company competes with do-it-yourself and do-it-for-me outlets, including AutoZone (AZO), Advance Auto Parts (AAP), O'Reilly Automotive (ORLY), and CSK Auto (CAO).
VCA Antech (WOOF) is the leading provider of pet health care services in the US with a nationwide clinical laboratory system and over 435 free-standing animal hospitals. VCA Antech achieved its current reputation in animal health care industry by acquiring and managing high quality veterinary practices and providing preeminent diagnostic laboratory services for animal hospitals across the country.
The Company provides veterinary services and diagnostic testing to support veterinary care. It also sells diagnostic imaging equipment, and other medical technology products and related services. Its network of veterinary diagnostic laboratories provides testing and consulting services used by veterinarians in the detection, diagnosis, evaluation, monitoring, treatment and prevention of diseases and other conditions affecting animals. In addition, it provides pharmaceutical products and performs a variety of pet wellness programs, including health examinations, diagnostic testing, routine vaccinations, spaying, neutering and dental care. Its medical technology business sells ultrasound and digital radiography imaging equipment. It also provides education and training on the use of that equipment, and consulting and mobile imaging services.
VCA Antech was founded in 1986 under the name "Veterinary Centers of America" in Los Angeles. The founders, Bob L. Antin, Arthur J. Antin, Neil Tauber are all on the board of directors. In 2001 VCA Antech became a publicly owned company. VCA Antech stock is traded on NASDAQ under the symbol "WOOF". WOOF has been growing consistently since its IPO.
Competition
Although WOOF excells in the niche market of animal health care, it also competes in the larger diagnostic testing and diagnostic device markets.
Its mid-size competitors are IDEXX Laboratories (IDXX) and Core Laboratories N.V. (CLB). The larger competitors are Siemens AG (SI), Koninklijke Philips Electronics, N.V. (PHG), Canon (CAJ).
AutoNation, Inc. (NYSE:AN) is the largest automotive retailer in the United States as of December 31, 2009.[1] The company sells new and used cars through its 246 franchises located primarily in U.S. metropolitan areas of the Sunbelt region (Southeast and Southwest United States). The company sells 33 different brands of new cars, including Toyota Motor (TM), Ford Motor Company (F), Honda Motor Company (HMC), General Motors (GMGMQ), Mercedes, BMW, and Nissan Motor (NSANY) made up 96% of its new cars sales.[1]
The company markets its stores under various local brand names, and due to its size relative to a fragmented competitor base (aside from competitor CARMAX (KMX)), AutoNation can leverage its size and scale to achieve cost efficiencies across its stores. However, the company operates in a mature industry and has experienced limited ability to grow via acquisitions, its primary method of growth. Furthermore, the company is negatively affected by rising oil prices as consumers drive less frequently and demand fewer new and used cars and fewer parts for their existing cars.
Company Overview
History
AutoNation was founded in 1996 by billionaire entrepreneur Wayne Huizenga, who also founded Blockbuster (BBI) and Waste Management (WMI). The company initially marketed itself under the AutoNation USA brand, but switched to the local branding strategy around 1999, after years of intense and unsuccessful rivalry with CARMAX (KMX). The company approached the brink of bankruptcy during its race with CarMax to open stores, but survived and began to prosper as competition slowed down and strategies diverged slightly.
Contents
1 Company Overview
1.1 History
1.2 Financials
1.3 Business Segments
1.3.1 New Vehicles (53% of 2009 Total Revenue)
1.3.2 Used Vehicles (23%)
1.3.3 Parts and Services (20%)
1.3.4 Financing and Insurance (3%)
2 Company Specific Trends/Risks
2.1 Dependence on continued financial viability of Auto Makers
2.2 Highly fragmented and very mature market
2.2.1 Economies of Scale and Competitive Advantages
3 Macro Trends Affecting AutoNation
3.1 Rising Oil Prices
3.2 Travel & Hurricanes in the South
3.3 Subprime Delinquencies on Auto Loans
4 Competition and Market Share
4.1 Market Share for Used/New Autos
4.2 Market Share for Auto Parts & Services
5 Footnotes
Financials
For the year 2009, new vehicle sales accounted for 53% of its total revenues, while used vehicle sales accounted for 23%.[1] Autonation sold parts and services, which accounted for 20% of total revenue, while financing and insurance products accounted for the remaining 3%.
For 2009, AutoNation earned a total revenue of $10.76 billion, enabling it to earn a net income of $198 million. Compared to 2008, AutoNation's total revenues declined, due largely to the tougher economic climate in 2009. This is evidenced by the fact that in 2009, only 10.4 million new cars were sold in the entire United States compared to 13.2 million in 2008.[2]
Business Segments
The company earns revenues through four different ways. They are: i) Sale of new vehicles, ii) Sale of used vehicles, iii) Parts and services for vehicles, and iv) Financing and insurance for vehicles.
New Vehicles (53% of 2009 Total Revenue)
This segment earned total revenues of $5.7 billion in 2009, a significant decline from its 2008 revenues of $7.4 billion.[3] However, despite earning the majority of its revenues from new car sales, this segment actually has low margins. In 2009, New Vehicles only earned 20% of its gross profit.[3]
Used Vehicles (23%)
AutoNation's used vehicle sales totaled $2.5 billion in 2009, a decline from its 2008 sales of $3.1 billion.[3] This segment earns higher margins than new vehicles, as it posted 11.9% of the company's gross profit despite only accounting for 23% of total revenues.
Parts and Services (20%)
AutoNation's parts and services segment is its highest earner in terms of gross profit, accounting for 48.5% of its gross profit. In 2009, this segment posted $2.1 billion in revenues, earning $935 million in gross profofits.[3]
Financing and Insurance (3%)
The financing and insurance segment earned total revenues of $351 million in 2009.
Company Specific Trends/Risks
Dependence on continued financial viability of Auto Makers
Vehicles made by General Motors (GM) and Ford Motor Company (F) constitute 33% of the AN's sales, and as American automakers struggle to remain competitive and financially viable, AutoNation is at risk of materially adverse after-effects.[4] Each of the "Big Three" (Ford, GM, and Daimler Chrysler) face substantial on and off-balance sheet liabilities, significant losses, and stiff competition from more cost-effective and successful competitors abroad, like Toyota Motor (TM) and Honda Motor Company (HMC). If any of these companies enter bankruptcy, raises prices, cut back production, or otherwise shift their business strategy, AN may experience store closings, drops in revenue at locations carrying GM and Ford brands, or otherwise strained margins or contracted business.
Highly fragmented and very mature market
The automotive retail industry is highly competitive, very fragmented, and mature. Nonetheless, the market (and aftermarket) for cars, parts, and service has steadily, albeit modestly, increasing demand. In the U.S., increases in the number and age of vehicles, number of miles driven annually, licensed drivers, and total number of light trucks (which generally require greater upkeep) provide for a relatively steady and growing automotive market.[5] The American market, however, is mature and unlikely to experience significantly higher rates of growth. Also, increases in the quality of cars may offset the need for secondary purchases of repair equipment and parts, which constitute the majority of AN gross profits.
Economies of Scale and Competitive Advantages
That the automotive retail market is so fragmented is both a challenge and an opportunity for AutoNation. The fragmentation makes for intense price competition for all dealers. However, because of AutoNation's relatively large size, store network, ability to command volume discounts, and ability to market its local brands in unison, the company enjoys something of a cost advantage over competitors. Furthermore, though barriers to entry are small, AN's scale is not easily duplicated in the industry; therefore, competitors may have a difficult time competing with the company's prices.
Macro Trends Affecting AutoNation
Rising Oil Prices
When oil prices increase, drivers limit their mileage and time on the road. In the long run, with sustained high oil prices, cars will assume less wear-and-tear and drivers will replace vehicles less frequently. Furthermore, less wear-and-tear on the road means less business for AN's parts and services segments (their most profitable business).
Travel & Hurricanes in the South
Increased travel and natural disasters like hurricanes can dramatically affect pricing for the company. When Americans travel more, rental companies like Hertz Global Holdings (HTZ) and Avis Budget Group (CAR) demand greater numbers of wholesale used-cars from AutoNation, and bidding intensifies. Similarly, hurricanes, such as those of the magnitude of Katrina and Rita, destroy large quantities of vehicles in the South/Sun Belt, a key market for the company. When replacements are sought in mass, demand drives car prices upward. Positive hurricane pricing is somewhat offset by the fact that the company operates a number of stores in storm-prone regions, placing them at risk of damage and necessitating pricey insurance coverage.
Subprime Delinquencies on Auto Loans
As many auto buyers finance their purchases with loans, there exists a risk of spillover from the subprime lending crisis into the auto-loan business. As homeowners/car buyers struggle to pay both their mortgages and auto-loans, the company may assume losses due to loan delinquencies as well as hampered demand for auto loans going forward.[6]
Competition and Market Share
The domestic industry for automotive new vehicle retail is fragmented and includes approximately 21,500 franchised dealerships and 17 million units sold annually. Similarly, the used vehicle retail industry includes some 45,000 independent used car dealerships and 45 million units sold annually.[7][8] Most are independently owned and operated, mom-and-pop type operations, as opposed to the AutoNation and CARMAX (KMX) roll-up, large-scale, parent company model.
Market Share for Used/New Autos
AutoNation's largest used-car competitor is CARMAX (KMX), which operates 77 retail superstores in 36 metropolitan markets and focuses on the highly fragmented used car market instead of the new vehicle market.
Market Share for Auto Parts & Services
In the parts market, the company competes with do-it-yourself and do-it-for-me outlets, including AutoZone (AZO), Advance Auto Parts (AAP), O'Reilly Automotive (ORLY), and CSK Auto (CAO).