Hometown Auto Retailers Reports 2000 Annual Results
WATERTOWN, Conn.--April 16, 2001--Hometown Auto Retailers Inc. (OTC BB: HCAR) Monday announced audited financial results for the year ended Dec. 31, 2000.Hometown reported revenues of $279.8 million in 2000 compared to revenues of $285.5 million in 1999. Gross profit for 2000 decreased by $1.0 million or 2.7 percent to $35.9 million. Gross profit on sales of new vehicles decreased $1.1 million or 11.3 percent to $8.9 million as a result of lower unit sales and a less than 1.0 percent decrease in gross profit margin.
Used car sales decreased 8.0 percent to $75.7 million in 2000 from $82.3 million in 1999. Parts and service revenues increased 4.8 percent to $23.9 million for 2000, versus $22.8 million in 1999. During 2000, the company incurred a net loss of $3.6 million or $0.60 per share for 2000 compared to a net income of $0.8 million or $0.13 per share in 1999.
As part of its operational losses for the year, Hometown recorded more than $4.0 million in non-recurring charges, including reserves for sub-prime financing, write-offs of Autotech receivables, reserves for executive terminations, as well as write-offs of the origination fees from GE Capital and the closing of the Morristown Lincoln Mercury location.
Revenues for the quarter ended Dec. 31, 2000 were $61.2 million compared to $69.5 million for the same period in 1999. Gross profit for the quarter decreased to $7.6 million from $8.9 million for the same period in 1999. Hometown posted a net loss of $0.56 per diluted share for the fourth quarter of 2000 versus a loss of $0.10 per diluted share in 1999.
"As many of our shareholders know, 2000 was a difficult year for Hometown Auto," said Corey Shaker, president and chief executive officer of Hometown. "However, we have made the necessary changes to ensure that the company does not have to go through the same problems in the future. I am confident that we are positioned in 2001 on a pathway to profitability.
"For example, we have eliminated $3 million in annual expenses from our operating budget this year, including saving $14,000 weekly in interest and fees as a result of our new floor plan financing agreement with Ford Credit. Even with a down year in the market and the loss in popularity of the Lincoln Mercury product line, new vehicle sales remained flat.
"The steps we have taken, combined with the release of new vehicles and new financing programs, will help make 2001 a better year for our employees and shareholders."
In addition to the previously mentioned non-recurring charges, the company also noted several key facts and events that are expected to help the company in 2001.
| -- | Under new management, Westwood Lincoln Mercury, one of the Northeast's largest Lincoln Mercury stores, is experiencing a significant turnaround. |
| -- | Hometown started 2001 with inventories nearly $10 million lower than at the start of 2000 to better position the company for uncertainties in the economy. |
| -- | Hometown sold Morristown Lincoln Mercury back to the manufacturer. |
| -- | The company consolidated its support staff in Connecticut into the existing corporate office. |
| -- | The company terminated its chairman and a vice president. |
"We are committed to bring back shareholder value at Hometown this year," Shaker added. "Hometown has accomplished so much in the past 12 months. We have eliminated all the covenant issues from GE Capital, cleaned up two recourse loan portfolios, eliminated excess management, and the entire company is focused on operations for the year 2001."
HOMETOWN AUTO RETAILERS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
For the Years Ended Dec. 31,
------------------------------------
2000 1999 1998
Revenues ---------- --------- ----------
New vehicle sales $ 173,128 $ 173,481 $ 70,068
Used vehicle sales 75,704 82,272 37,053
Parts and service sales 23,905 22,823 11,130
Other, net 7,104 6,917 3,265
Total revenues 279,841 285,493 121,516
Cost of sales
New vehicle sales 164,202 163,416 65,790
Used vehicle sales 69,039 75,385 33,749
Parts and service sales 10,709 9,814 5,359
Cost of sales 243,950 248,615 104,898
Gross profit 35,891 36,878 16,618
Amortization of goodwill 661 600 212
Loss from operations of
e-Commerce subsidiary -- 515 --
Selling, general and
administrative expenses 38,452 32,045 17,510
Income (loss) from
operations (3,222) 3,718 (1,104)
Interest expense, net (2,135) (1,989) (443)
Other income (expense), net (127) (95) 46
Income (loss) before taxes (5,484) 1,635 (1,501)
Provision (benefit) for income
taxes (1,902) 850 (502)
Net income (loss) $ (3,582) $ 785 $ (999)
Earnings (loss) per share,
basic $ (.60) $ .13 $ (.28)
Earnings (loss) per share,
diluted $ (.60) $ .13 $ (.28)
Weighted average shares
outstanding, basic 5,996,146 5,875,342 3,513,333
Weighted average shares
outstanding, diluted 6,728,183 6,003,851 3,513,333
The accompanying notes are an integral part of these consolidated
financial statements
HOMETOWN AUTO RETAILERS INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
Dec. 31,
----------------------
ASSETS 2000 1999
Current Assets: -------- -------
Cash and cash equivalents $ 586 $ 1,635
Accounts receivable, net 6,149 6,101
Inventories 40,964 51,455
Prepaid expenses and other
current assets 826 2,095
Deferred income taxes and
taxes receivable 750 523
Total current assets 49,275 61,809
Property and equipment, net 7,594 8,415
Goodwill, net 24,793 24,578
Other assets 4,137 2,505
Total assets $ 85,799 $ 97,307
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Floor plan notes payable $ 40,123 $ 48,986
Accounts payable and accrued expenses 5,579 4,787
Current maturities of long-term debt 431 708
Other current bank borrowings -- 2,200
Total current liabilities 46,133 56,681
Long-term debt 8,785 9,051
Long-term deferred income taxes 399 200
Other long-term liabilities 457 360
Total liabilities 55,774 66,292
Stockholders' Equity:
Preferred stock, $.001 par value,
2,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, Class A, $.001 par
value, 12,000,000 and 24,000,000
shares authorized, respectively,
2,301,109 and 2,147,000 issued and
outstanding, respectively 2 2
Common stock, Class B, $.001 par
value, 3,760,000 shares authorized,
3,699,000 and 3,753,000 issued and
outstanding, respectively 4 4
Additional paid-in capital 28,786 26,194
Retained earnings 1,233 4,815
Total stockholders' equity 30,025 31,015
Total liabilities and stockholders'
equity $ 85,799 $ 97,307
The accompanying notes are an integral part of these consolidated
financial statements