UnitedAuto Reports a 139% Increase in Net Income
DETROIT--May 1, 2002--United Auto Group, Inc. , a FORTUNE 500 automotive specialty retailer, today announced record results for first quarter 2002.
First quarter revenues increased 19% to $1.6 billion and net income increased 139% to $15.7 million. Earnings per share were $0.40, an increase of 90% over the $0.21 reported in first quarter 2001. Earnings per share reflect a 23% increase in weighted average shares outstanding. Excluding the effect of goodwill amortization, net income and earnings per share in first quarter 2001 would have been $9.2 million and $0.29, respectively. On a comparable accounting basis, net income and earnings per share increased 71% and 38%, respectively, over the prior year.
During the quarter, the Company received $125 million from the sale of 3.0 million shares of common stock to the public and the exercise of warrants to purchase common stock by Penske Capital Partners. The Company also issued $300.0 million of Senior Subordinated Notes due 2012, which bear interest at 9.625%. Proceeds from the stock and debt offerings were used to repay borrowings under the Company's credit agreement.
Roger Penske, Chairman, said, "The first quarter of 2002 marked several significant achievements for our Company. Our brand mix was strengthened with our March acquisition of the Sytner Group, a prestige United Kingdom automotive retailer. The combined equity and debt transactions, which raised $425.0 million, significantly strengthen our balance sheet and will allow us to aggressively pursue our business strategy. Our record earnings and twelfth consecutive quarter of same store revenue growth validate this business model. Based upon our performance, we are raising our full year guidance to $1.80 - $1.86 per share, the balance of which is expected to be earned as follows: Q2: $0.51 - $0.53; Q3: $0.52 - $0.54 and Q4: $0.37 - $0.39."
Sam DiFeo Jr., President, added, "Although the U.S. market is experiencing a modest decline in new and used unit sales, our business remains strong due to our brand mix and geographical diversity. Our 6.4% increase in same store retail sales was accompanied by a 9.8% increase in same store retail gross profit."
UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 123 franchises in the United States and 66 franchises internationally, primarily in the United Kingdom. UnitedAuto dealerships sell new and used vehicles, and market a complete line of aftermarket automotive products and services.
UnitedAuto will host a conference call discussing financial results relating to first quarter 2002 on Wednesday, May 1, 2002 at 3P.M. Eastern time. Advance registration is not required. Participants must call (877) 709-5341 (International, please call (773) 756-4618). Calls need to be made shortly before the call is to commence. Please provide the leader's name - Roger Penske - as well as the code UAG1Q. The conference call cannot be accessed without this information. The call will also be simultaneously broadcast live over the Internet through the UnitedAuto website at www.unitedauto.com.
Statements in this press release may involve forward-looking statements, including forward-looking statements regarding UnitedAuto's future reportable sales and earnings growth potential. Actual results may vary materially because of external factors such as interest rate fluctuations, changes in consumer spending and other factors over which management has no control. These forward-looking statements should be evaluated together with additional information about UnitedAuto's business, markets, conditions and other uncertainties, which could affect UnitedAuto's future performance, which are contained in UnitedAuto's filings with the Securities and Exchange Commission and which are incorporated into this press release by reference.
UNITED AUTO GROUP, INC.
Consolidated Statements of Income (Unaudited)
(Amounts In Thousands, Except Per Share Data)
First Quarter
----------------------
2002 2001
---- ----
Revenues
New Vehicles $977,771 $805,853
Used Vehicles 312,039 265,980
Finance and Insurance 39,068 33,017
Service and Parts 169,419 140,622
Fleet 34,325 37,526
Wholesale 100,486 88,617
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Total Revenues 1,633,108 1,371,615
Cost of Sales 1,396,101 1,179,825
--------- ---------
Gross Profit 237,007 191,790
Selling, General & Administrative
Expenses 193,820 157,894
------- -------
Operating Income 43,187 33,896
Floor Plan Interest Expense 8,614 12,578
Other Interest Expense 7,872 9,668
----- -----
Income Before Minority Interests
and Income Tax
Provision 26,701 11,650
Minority Interests (416) (14)
Income Tax Provision (10,574) (5,066)
-------- -------
Net Income $15,711 $6,570
======= ======
Diluted Earnings Per Share $0.40 $0.21
===== =====
Diluted Weighted Average Shares
Outstanding 39,196 31,843
====== ======
EBITDA (a) $39,126 $28,995
======= =======
Same Store Retail Revenue
New Vehicles $799,110 $744,466
Used Vehicles 248,564 242,941
Finance and Insurance 30,825 27,436
Service and Parts 140,785 130,711
------- -------
Total $1,219,284 $1,145,554
========== ==========
(a) EBITDA is defined as income before minority interests, income
tax provision, other interest expense, depreciation and
amortization. Depreciation was $4.6 million and $3.0 million
in 2002 and 2001, respectively. Amortization was $4.6 million
in 2001.
UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
3/31/02 12/31/01
------- --------
Assets (unaudited)
Cash and Cash Equivalents $2,620 $5,416
Accounts Receivable, Net 289,795 258,266
Inventories 832,526 641,400
Other Current Assets 27,956 16,434
------ ------
Total Current Assets 1,152,897 921,516
Property and Equipment, Net 215,986 185,452
Intangible Assets, Net 905,545 784,149
Other Assets 59,509 55,459
------ ------
Total Assets $2,333,937 $1,946,576
========== ==========
Liabilities and Stockholders' Equity
Floor Plan Notes Payable $758,172 $620,014
Accounts Payable and Accrued Expenses 237,148 162,062
Current Portion Long - Term Debt 12,528 4,202
------ -----
Total Current Liabilities 1,007,848 786,278
Long - Term Debt (a) 572,693 551,840
Other Liabilities 94,208 92,775
------ ------
Total Liabilities 1,674,749 1,430,893
Stockholders' Equity 659,188 515,683
------- -------
Total Liabilities and Stockholders'
Equity $2,333,937 $1,946,576
========== ==========
(a) Undrawn capacity under the Company's credit facility was
$452.5 million as of March 31, 2002.
UNITED AUTO GROUP, INC.
Selected Data
First Quarter
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2002 2001
---- ----
Units
New Retail Units 36,007 31,035
Used Retail Units 18,169 16,486
------ ------
Total Retail Units 54,176 47,521
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Retail Revenue Mix
New Vehicles 59.9% 58.8%
Used Vehicles 19.1% 19.4%
Finance and Insurance 2.4% 2.4%
Service and Parts 10.4% 10.3%
Fleet 2.1% 2.7%
Wholesale 6.1% 6.4%
Retail Gross Margin - by Product
New Vehicles 8.6% 8.4%
Used Vehicles 11.1% 10.5%
Finance and Insurance 100.0% 100.0%
Service and Parts 46.0% 44.8%
Gross Profit per Transaction
New Vehicles $2,340 $2,176
Used Vehicles 1,914 1,699
Finance and Insurance 721 695
Same Store Retail Revenue Growth
New Vehicles 7.3% 2.7%
Used Vehicles 2.3% 2.7%
Finance and Insurance 12.4% 12.4%
Service and Parts 7.7% 6.2%
Debt to Total Capital Ratio 47% 53%