UnitedAuto Reports Record First Quarter
DETROIT--April 28, 2003--UnitedAutoQ1 Revenues Increase 25.5% to $2.0 Billion
Q1 Income from Continuing Operations Increases 8.6% to $16.8 Million
Q1 Earnings Per Share from Continuing Operations Increases
5.1% to $0.41 Per Share
Q1 Same Store Retail Revenues Increase 3.4% and Related
Gross Profit Increases 3.9%
United Auto Group, Inc. , a FORTUNE 500 automotive specialty retailer, today announced results for first quarter 2003, including growth in revenues, gross profit and operating income. First quarter revenues increased 25.5% to a record $2.0 billion. Revenue growth was driven by increases in same store sales for new retail vehicles, used retail vehicles, service and parts, and finance and insurance of 2.4%, 4.2%, 6.2% and 11.6%, respectively.
Income and earnings per share from continuing operations increased 8.6% and 5.1% to a record $16.8 million and $0.41, respectively. Including the cumulative effect of a change in accounting principle, as required by recently defined accounting principles (EITF 02-16) relating to floor plan and advertising credits provided by automotive manufacturers, net income and earnings per share were $13.7 million and $0.34, respectively. Earnings per share reflect a 4.4% increase in weighted average shares outstanding.
Chairman Roger Penske commented, "UnitedAuto performed well despite the economic, political and weather related challenges in the first quarter. Although the U.S. market saw a 4.4% decline in new unit sales during the first quarter, our operating strategy and the strength of our brand mix resulted in a 2.4% increase in same store new retail revenue. I am also pleased that we grew our same store service and parts revenue 6.2% in the quarter, as the additional capacity provided by our facility investment program continues to pay dividends. We expect to see continued expansion of this element of our business in the future. In addition, our margin on service and parts business continued its growth, increasing 1.8 percentage points during the first quarter to 47.8%. We reiterate our earnings projection of $1.96-$2.06 per share (excluding the cumulative effect of the change in accounting principle), with a second quarter estimate of $0.55-$0.60 per share. Our estimates are based upon 41.2 million weighted average shares outstanding and same store retail revenue growth of 2% to 4%."
UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 129 franchises in the United States and 71 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 2003 on Monday, April 28, 2003 at 2 P.M. Eastern time. Advance registration is not required. Participants must call (800) 553-0351 (International, please call (612) 332-0530). Calls need to be made shortly before the call is to commence. The call will also be simultaneously broadcast live over the Internet through the UnitedAuto website at www.unitedauto.com.
UNITED AUTO GROUP, INC.
Consolidated Statements of Income (Unaudited)
(Amounts In Thousands, Except Per Share Data)
First Quarter
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2003 2002
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New Vehicles $1,116,662 $946,309
Used Vehicles 445,666 299,917
Finance and Insurance 48,830 37,714
Service and Parts 214,681 162,538
Fleet 29,404 31,324
Wholesale 121,568 97,130
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Total Revenues 1,976,811 1,574,932
Cost of Sales 1,689,659 1,346,792
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Gross Profit 287,152 228,140
SG&A Expenses 239,310 185,683
---------- ----------
Operating Income 47,842 42,457
Floor Plan Interest Expense (9,088) (8,299)
Other Interest Expense (10,350) (7,868)
---------- ----------
Income from Continuing Operations Before
Minority Interests and Income Tax Provision 28,404 26,290
Minority Interests (393) (416)
Income Tax Provision (11,220) (10,416)
---------- ----------
Income from Continuing Operations 16,791 15,458
Income from Discontinued Operations, Net of Tax -- 253
---------- ----------
Income Before Cumulative Effect of
Accounting Change 16,791 15,711
Cumulative Effect of Accounting Change (a) (3,058) --
---------- ----------
Net Income $13,733 $15,711
========== ==========
Income from Continuing Operations Per Diluted
Share $0.41 $0.39
========== ==========
Cumulative Effect of Accounting Change on Diluted
EPS ($0.07) --
========== ==========
Diluted EPS $0.34 $0.40
========== ==========
Diluted Weighted Average Shares Outstanding 40,920 39,196
========== ==========
EBITDA (b) $46,115 $38,557
========== ==========
(a) Represents a cumulative accounting change resulting from the
adoption of EITF 02-16, "Accounting by a Customer (including a
Reseller) for Certain Consideration Received from a Vendor".
(b) EBITDA is defined as income from continuing operations before
minority interests, income tax provision, other interest expense,
depreciation and amortization. While EBITDA should not be construed as
a substitute for income from continuing operations or as a better
measure of liquidity than cash flows from operating activities, which
are determined in accordance with U.S. GAAP, it is included in this
press release to provide additional information regarding the amount
of cash our business is generating. This measure may not be comparable
to similarly titled measures reported by other companies. Following is
a reconciliation of income from continuing operations before minority
interests and income tax provision and EBITDA:
First Quarter
----------------
2003 2002
----------------
Income from continuing operations before minority
interests and income tax provision $28.4 $ 26.3
Other interest expense 10.4 7.9
Depreciation and amortization 7.3 4.4
----------------
EBITDA $46.1 $38.6
================
UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
3/31/03 12/31/02
----------- ------------
Assets (unaudited)
Cash and Cash Equivalents $11,468 $8,069
Accounts Receivable, Net 324,791 319,625
Inventories 1,087,397 973,185
Other Current Assets 40,260 27,869
----------- ------------
Total Current Assets 1,463,916 1,328,748
Property and Equipment, Net 346,837 313,496
Goodwill 951,302 945,303
Other Intangibles, Net 36,025 36,025
Other Assets 77,873 66,742
------------ -----------
Total Assets $2,875,953 $2,690,314
============ ===========
Liabilities and Stockholders' Equity
Floor Plan Notes Payable 1,000,466 $907,903
Accounts Payable and Accrued Expenses 294,246 276,593
Current Portion Long - Term Debt 5,115 14,979
----------- ------------
Total Current Liabilities 1,299,827 1,199,475
Long - Term Debt (a) 715,110 651,256
Other Long-Term Liabilities 148,689 135,141
----------- ------------
Total Liabilities 2,163,626 1,985,872
Stockholders' Equity 712,327 704,442
----------- ------------
Total Liabilities and Stockholders'
Equity $2,875,953 $2,690,314
============ ===========
(a) Undrawn capacity under the Company's credit facilities amounted
to approximately $344 million as of March 31, 2003.
UNITED AUTO GROUP, INC.
Selected Data
First Quarter
----------------------
2003 2002
----------- ----------
Units
New Retail Units 38,958 34,689
Used Retail Units 21,877 17,298
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Total Retail Units 60,835 51,987
=========== ===========
Same Store Retail Revenue
New Vehicles $901,262 $880,553
Used Vehicles 282,134 270,773
Finance and Insurance 36,146 32,402
Service and Parts 162,607 153,182
----------- -----------
Total Same Store Retail Revenue $1,382,149 $1,336,910
=========== ===========
Same Store Retail Revenue Growth
New Vehicles 2.4% 7.3%
Used Vehicles 4.2% 2.3%
Finance and Insurance 11.6% 12.4%
Service and Parts 6.2% 7.7%
Revenue Mix
New Vehicles 56.5% 60.1%
Used Vehicles 22.5% 19.0%
Finance and Insurance 2.5% 2.4%
Service and Parts 10.9% 10.3%
Fleet 1.5% 2.0%
Wholesale 6.1% 6.2%
Retail Gross Margin - by Product
New Vehicles 8.4% 8.6%
Used Vehicles 9.5% 11.2%
Finance and Insurance 100.0% 100.0%
Service and Parts 47.8% 46.0%
Gross Profit per Transaction
New Vehicles $2,411 $2,351
Used Vehicles 1,932 1,936
Finance and Insurance 803 725
Brand Mix:
Toyota/Lexus 22% 26%
BMW 14% 8%
Honda/Acura 12% 12%
General Motors 11% 14%
Mercedes 9% 7%
Chrysler 9% 10%
Nissan/Infiniti 5% 7%
Ford 4% 6%
Other 14% 10%
Debt to Total Capital Ratio 50% 47%