Editor’s note: The Dealer LAB is a joint editorial project between Dealernews and PowerHouse Dealer Services, a consulting firm operated by Bill Shenk who is also owner of Destination Powersports in Punta Gorda, Fla. Financial information in this report is sourced from Destination Powersports’ Composite Report (prepared from the dealership’s monthly financial report) which is supplied to Dealernews by Shenk under an exclusive agreement. Shenk also provides Dealernews contributing editor Joe Delmont with exclusive access to select store and team meetings and other updates; Delmont uses this information as well as interviews with Shenk to develop the monthly Lab report in Dealernews and on Dealernews.com.
The financial information in this report is taken from the dealership’s Composite Report supplied by Shenk and prepared for the dealership’s participation in the PowerHouse Dealer 20-Group. The Composite Report is prepared from the store’s monthly financial report. In preparing these reports, Dealernews reviews the dealership’s unaudited P&L statement and balance sheet, as well as its Composite Report.
If you look at the year-over-year numbers for February at Destination Powersports in Punta Gorda, Fla., you might be surprised at the huge improvement of almost $47,000 in the dealership’s monthly net profit. However, the Punta Gorda dealership was closed most of February 2010 by action of its previous owners. Bill Shenk took over the dealership and renamed it Destination Powersports in March 2010.
The dealership squeezed out a net profit of $6,898 for 20 days of operation in February, on revenue of $344,159.
Flooring costs were $2,840, a reported improvement of $11,650 over previous year. According to Shenk the difference drops directly to the store’s current bottom line.
The improved flooring cost was partially the result of reduced unit inventories. In February 2010, the store reportedly had 227 units in inventory, but that number dropped to 176 units in inventory by February 2011. Some of the current inventory is on “OEM program free flooring.” Other current inventory is at a lower interest rate compared to older units.
For the first two months of 2011, total revenue was $799,889, more than $400,000 ahead of the same period in 2010, according to Shenk’s figures. Gross profit for the first two months this year was $204,546, up $76,715, or 60 percent, from the $127,831 posted for the first two months of 2010, Shenk reports.
A solid increase in unit sales accounted for much of this growth. Unit sales climbed from a reported 38 units in the first two months of 2010 to 66 units this year. Sales this year included 21 used motorcycles, compared to five used motorcycles and one used ATV last year, Shenk reports. Revenue from unit sales through February this year was $602,594. Revenue from unit sales was 75.3 percent of the total revenue through February 2011, compared to only 57.4 percent of total revenue in the same period of 2010, according to Shenk.
Total F&I revenue for 2011 was $24,819, an increase over previous year, says Shenk.
The contribution to dealership profit from F&I for the first two months of the year also climbed, hitting $13,915 in 2011, compared to $5,217 in 2010, he says.
This story originally appeared in the Dealernews May 2011 issue.
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