Hometown Auto Records Profit for Second Consecutive Quarter
WATERTOWN, Conn.--Aug. 7, 2001--Hometown Auto Retailers, Inc. (OTC BB:HCAR) today reported a profit of $0.09 per diluted share for the second quarter 2001, compared to a loss of $0.02 per diluted share for the second quarter 2000. Net income for second quarter 2001 increased to $573,000, compared to a loss of $97,000 for the same period in 2000.Revenues for the three months ended June 30, 2001, decreased by $150,000 to $74.62 million from $74.77 million in 2000. Gross profits for the period increased by $696,000, or 7 percent, to $10.3 million compared to $9.6 million for the prior year period. Cash flow per share (net income plus depreciation and amortization) was $0.15 per diluted share in the second quarter of 2001 compared to $0.03 for the same period last year. Cash flow per share for the quarter was 67 percent higher than EPS.
For the first six months of the year, Hometown reported earnings per share of $0.10 per diluted share compared to a loss of $0.01 for the same period 2000. Revenues for the first six months of the year were $135.5 million compared to $148.8 million for the same period in 2000. Gross profits for the first six months of 2001 increased $138,000 to $18.97 million from $18.83 million for the same period in 2000.
"We are excited to present to our shareholders the first quarter-over-quarter growth in more than a year," said Corey Shaker, president and chief executive officer of Hometown. "We believe we have turned a corner financially in the last two quarters, beating a slowing economy and showing a profit for two consecutive quarters. We remain committed to our first quarter statement that we will never rest on these numbers. Although new car sales were down compared to the same quarter last year, used car sales, and parts and services sales are growing, and we anticipate that growth will continue as we move into the remainder of the third quarter."
Revenues from new car sales decreased to $41.6 million in the second quarter 2001 compared to $47.1 million for the same period in 2000. Revenues from used car sales increased 23 percent to $24.3 million in the second quarter 2001 from $19.8 million in the second quarter of 2000. The company also experienced a 10 percent growth rate in parts and service sales during the quarter, with sales increasing to $6.6 million, up from $6.0 million for the same period in 2000.
"With all of the changes we have made recently, we have created a much more enjoyable working environment, with a confident and motivated workforce," Shaker said. "We are all working to make Hometown successful, and if the results of the two previous quarters tell us anything, it is that we are moving in the right direction."
The number of outstanding weighted average shares for the second quarter 2001 and 2000 were 6,200,109 and 6,236,799, respectively.
About Hometown
Hometown Auto Retailers (www.htauto.com) sells new and used cars and light trucks, provides maintenance and repair services, sells replacement parts and provides related financing, insurance and service contracts through 10 franchised dealerships located in New Jersey, New York, Connecticut, Massachusetts and Vermont. The company's dealerships offer 13 American and Asian automotive brands, including Chevrolet, Chrysler, Daewoo, Dodge, Ford, Isuzu, Jeep, Lincoln, Mazda, Mercury, Oldsmobile, Plymouth and Toyota. Hometown is also active in two "niche" segments of the automotive market: the sale of Lincoln Town Cars and limousines to livery car and livery fleet operators and the maintenance and repair of cars and trucks at a Ford and Lincoln Mercury factory authorized free-standing service center.
This release contains "forward-looking statements" based on current expectations but involving known and unknown risks and uncertainties. Actual results or achievements may be materially different from those expressed or implied. The company's plans and objectives are based on assumptions involving judgments with respect to future economic, competitive and market conditions, its ability to consummate, and the timing of, acquisitions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the company. Therefore, there can be no assurance than any forward-looking statement will prove to be accurate.
HOMETOWN AUTO RETAILERS, INC,
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2001 2000 2001 2000
Revenues
New vehicle sales $ 41,602 $ 47,134 $ 76,508 $ 93,284
Used vehicle sales 24,339 19,817 42,656 40,175
Parts and service
sales 6,642 6,033 12,590 11,735
Other dealership
revenues, net 2,036 1,785 3,755 3,601
Total revenues 74,619 74,769 135,509 148,795
Cost of sales
New vehicle sales 39,381 44,664 72,393 88,410
Used vehicle sales 21,954 17,805 38,326 36,409
Parts and service sales 2,970 2,682 5,821 5,145
Total cost of sales 64,305 65,151 116,540 129,964
Gross profit 10,314 9,618 18,969 18,831
Amortization of goodwill 175 164 353 327
Selling, general and
administrative expenses 9,003 8,963 16,681 17,498
Income from
operations 1,136 491 1,935 1,006
Other expense
Interest expense, net (478) (562) (1,231) (1,037)
Other income
(expense), net 228 (112) 481 (84)
Income before taxes 886 (183) 1,185 (115)
Provision for income taxes 313 (86) 485 (56)
Net income $ 573 $ (97) 700 (59)
Earnings per share,
basic (Note 3) $ 0.10 $ (0.02)$ 0.12 $ (0.01)
Earnings per share,
diluted (Note 3) $ 0.09 $ (0.02)$ 0.10 $ (0.01)
Weighted average shares
outstanding, basic
(Note 3) 6,000,109 5,997,016 6,000,109 5,992,939
Weighted average shares
outstanding, diluted
(Note 3) 6,200,109 6,236,799 7,111,146 6,129,486
HOMETOWN AUTO RETAILERS, INC,
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
June 30, December 31,
ASSETS 2001 2000
(unaudited)
Current Assets
Cash and cash equivalents $ 930 $ 586
Accounts receivable, net 8,337 6,149
Inventories 37,254 40,964
Prepaid expenses and other
current assets 1,970 1,576
Total current assets 48,491 49,275
Property and equipment, net 7,477 7,594
Investment in CarDay.com 3,258 3,258
Goodwill, net 24,059 24,793
Other assets 812 879
Total Assets $84,097 $85,799
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Floor plan notes payable $36,940 $40,123
Accounts payable and accrued expenses 5,880 5,579
Current maturities of long-term debt 432 431
Other current liabilities 137 --
Total current liabilities 43,389 46,133
Long-term debt 8,644 8,785
Long-term deferred income taxes 850 399
Other long-term liabilities 489 457
Total liabilities 53,372 55,774
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 shares authorized,
2,315,109 and 2,301,109 shares issued
and outstanding; 2 2
Common stock, Class B, $.001 par value,
3,760,000 shares authorized, 3,685,000
and 3,699,000 shares issued and
outstanding 4 4
Additional paid-in capital 28,786 28,786
Retained earnings 1,933 1,233
Total stockholders' equity 30,725 30,025
Total liabilities and
stockholders' equity $84,097 $85,799