UnitedAuto Reports Record Second Quarter; Revenues Increase 12%; Same-Store Revenues Increase 3%
BLOOMFIELD HILLS, Mich.--July 28, 2004--| Net Income Increases 38% to $33.0 Million Earnings Per Share Increases 22% to $0.71 Per Share |
UnitedAuto Group, Inc. , a FORTUNE 500 automotive specialty retailer, today announced revenue of $2.5 billion and its 21st consecutive quarter of reporting record results.
The Company's record results were highlighted by a 3.2% increase in same-store retail revenues, which includes a 4.0% increase in new vehicle retail revenue, driven by the continued strong performance of its premium and luxury franchises, and a 9.5% increase in service and parts revenues. Net income for the quarter increased 38.3% to $33.0 million, or $0.71 per share, from $23.9 million, or $0.58 per share, in the prior year. Second quarter 2004 results include a $6.6 million ($4.0 million after tax), or $0.09 per share, gain resulting from the sale of an investment.
For the six months ended June 30, 2004, revenues increased 17.8% to $4.8 billion. Net income for the year increased 41.5% to $53.2 million, or $1.19 per share, from $37.6 million, or $0.92 per share, in the prior year. Prior year results include the effect of $5.0 million after tax (including $3.1 million in the first quarter and $1.9 million in the second quarter), or $0.12 per share, of nonrecurring charges.
Chairman Roger Penske commented, "I'm pleased with our performance, despite a challenging retail vehicle market in the United States during the quarter. In particular, the 9.5% same-store growth in our service and parts business demonstrates the benefit of our capital investment program and the resiliency of our business model. We will continue to make the necessary investment, both domestically and internationally, to foster future growth."
Including the completion of three Honda and two Acura acquisitions from the Stevens Group in the San Francisco Bay Area (expected to close in August), UnitedAuto will have acquired $600 million in net annualized revenue in 2004, meeting the Company's acquisition target. Considering completed acquisitions, the expected performance of the business and the anticipation of higher interest rates, the Company currently estimates earnings per share in the range of $2.30 - $2.39 per share for the full year, which includes the effect of the $0.09 per share nonrecurring gain from the second quarter and is based on an estimated average of 45.6 million shares outstanding. Earnings per share in the third quarter are expected to be in the range of $0.61 - $0.63 per share, based on an estimated average of 46.6 million shares outstanding.
UnitedAuto will host a conference call discussing financial results relating to second quarter 2004 on Wednesday, July 28, 2004 at 11 a.m. ET. To listen to the conference call, participants must dial (888) 423-3280 (International, please dial (651) 291-0344). The call will also be simultaneously broadcast live over the Internet through the UnitedAuto website at www.unitedauto.com.
About UnitedAuto
UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 139 franchises in the United States and 103 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.
UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Second Quarter
-----------------------
2004 2003
----------- -----------
New Vehicles $1,400,597 $1,280,752
Used Vehicles 531,789 473,993
Finance and Insurance 53,322 52,670
Service and Parts 263,524 224,130
Fleet 34,382 36,527
Wholesale 175,013 123,666
----------- -----------
Total Revenues 2,458,627 2,191,738
Cost of Sales 2,106,050 1,879,141
----------- -----------
Gross Profit 352,577 312,597
SG&A Expenses 274,922 242,630
Depreciation and Amortization 9,109 7,538
----------- -----------
Operating Income 68,546 62,429
Floor Plan Interest Expense (11,182) (11,412)
Other Interest Expense (10,052) (10,810)
Other Income 6,611 --
----------- -----------
Income from Continuing Operations Before
Minority Interests and Income Tax
Provision 53,923 40,207
Minority Interests (518) (658)
Income Tax Provision (20,923) (15,883)
----------- -----------
Income from Continuing Operations 32,482 23,666
Income from Discontinued Operations, Net of
Tax 521 198
----------- -----------
Net Income $33,003 $23,864
=========== ===========
Income from Continuing Operations Per Diluted
Share $0.70 $0.57
=========== ===========
Diluted EPS $0.71 $0.58
=========== ===========
Diluted Weighted Average Shares Outstanding 46,565 41,176
=========== ===========
UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Six Months
-----------------------
2004 2003
----------- -----------
New Vehicles $2,716,967 $2,357,317
Used Vehicles 1,056,742 898,546
Finance and Insurance 106,365 99,228
Service and Parts 523,007 430,458
Fleet 66,905 62,421
Wholesale 344,953 238,751
----------- -----------
Total Revenues 4,814,939 4,086,721
Cost of Sales 4,118,114 3,498,736
----------- -----------
Gross Profit 696,825 587,985
SG&A Expenses 551,837 463,262
Depreciation and Amortization 17,923 14,538
----------- -----------
Operating Income 127,065 110,185
Floor Plan Interest Expense (24,505) (20,148)
Other Interest Expense (20,817) (21,092)
Other Income 6,611 --
----------- -----------
Income from Continuing Operations Before
Minority Interests and Income Tax
Provision 88,354 68,945
Minority Interests (828) (1,051)
Income Tax Provision (34,281) (27,236)
----------- -----------
Income from Continuing Operations 53,245 40,658
Loss from Discontinued Operations, Net of Tax (38) (3)
----------- -----------
Income Before Cumulative Effect of
Accounting Change 53,207 40,655
Cumulative Effect of Accounting change (a) -- (3,058)
----------- -----------
Net Income $53,207 $37,597
=========== ===========
Income from Continuing Operations Per Diluted
Share $1.20 $0.99
=========== ===========
Diluted EPS before Cumulative Effect of
Accounting change $1.19 $0.99
=========== ===========
Cumulative Effect of Accounting change on
Diluted EPS -- ($0.07)
=========== ===========
Diluted EPS $1.19 $0.92
=========== ===========
Diluted Weighted Average Shares Outstanding 44,548 40,994
=========== ===========
UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)
6/30/04 12/31/03
----------- -----------
Assets
Cash and Cash Equivalents $19,797 $13,439
Accounts Receivable, Net 345,301 342,446
Inventories 1,263,132 1,166,756
Other Current Assets 52,213 43,090
----------- -----------
Total Current Assets 1,680,443 1,565,731
Property and Equipment, Net 430,312 368,504
Intangibles 1,092,489 1,085,034
Other Assets 83,669 89,968
Assets of Discontinued Operations 2,351 27,944
----------- -----------
Total Assets $3,289,264 $3,137,181
=========== ===========
Liabilities and Stockholders' Equity
Floor Plan Notes Payable $1,186,086 $1,122,065
Accounts Payable and Accrued Expenses 386,388 347,098
Current Portion Long-Term Debt 981 8,574
----------- -----------
Total Current Liabilities 1,573,455 1,477,737
Long-Term Debt 544,350 643,145
Other Long-Term Liabilities 164,806 168,111
Liabilities of Discontinued Operations 1,167 19,776
----------- -----------
Total Liabilities 2,283,778 2,308,769
Stockholders' Equity 1,005,486 828,412
----------- -----------
Total Liabilities and Stockholders'
Equity $3,289,264 $3,137,181
=========== ===========
UNITED AUTO GROUP, INC.
Selected Data
Second Quarter Six Months
----------------------- -----------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Units
New Retail Units 45,140 43,932 87,261 81,305
Used Retail
Units 22,631 23,039 45,289 43,508
----------- ----------- ----------- -----------
Total
Retail
Units 67,771 66,971 132,550 124,813
=========== =========== =========== ===========
Same-Store Retail
Revenue
New Vehicles $1,280,103 $1,230,960 $2,476,308 $2,298,338
Used Vehicles 448,486 455,012 896,524 873,636
Finance and
Insurance 49,553 51,118 98,624 97,195
Service and
Parts 236,094 215,536 469,665 419,456
----------- ----------- ----------- -----------
Total Same-
Store Retail
Revenue $2,014,236 $1,952,626 $3,941,121 $3,688,625
=========== =========== =========== ===========
Same-Store Retail
Revenue Growth
New Vehicles 4.0% 10.0% 7.7% 7.4%
Used Vehicles (1.4%) 18.3% 2.6% 10.7%
Finance and
Insurance (3.1%) 20.3% 1.5% 16.3%
Service and
Parts 9.5% 11.0% 12.0% 8.7%
Revenue Mix
New Vehicles 57.0% 58.4% 56.4% 57.7%
Used Vehicles 21.6% 21.6% 21.9% 22.0%
Finance and
Insurance 2.2% 2.4% 2.2% 2.4%
Service and
Parts 10.7% 10.2% 10.9% 10.5%
Fleet 1.4% 1.7% 1.4% 1.5%
Wholesale 7.1% 5.6% 7.2% 5.8%
Retail Gross Margin -
by Product
New Vehicles 8.5% 8.4% 8.5% 8.4%
Used Vehicles 9.0% 9.3% 9.0% 9.3%
Finance and
Insurance 100.0% 100.0% 100.0% 100.0%
Service and
Parts 49.9% 48.0% 50.0% 48.0%
Gross Profit per
Transaction
New Vehicles $2,636 $2,459 $2,654 $2,444
Used Vehicles 2,117 1,908 2,107 1,916
Finance and
Insurance 787 786 803 795
UNITED AUTO GROUP, INC.
Selected Data (Continued)
Second Quarter Six Months
----------------- -------------------
2004 2003 2004 2003
-------- -------- --------- ---------
Brand Mix:
Toyota/Lexus 22% 22% 22% 22%
BMW 16% 13% 15% 13%
Mercedes 10% 10% 10% 10%
Honda/Acura 10% 12% 10% 12%
General Motors 9% 11% 9% 11%
Ford Premier Group 8% 7% 8% 8%
Chrysler 6% 7% 5% 7%
Nissan/Infiniti 4% 5% 4% 5%
Ford 4% 5% 4% 5%
Other 11% 8% 13% 7%
Debt to Total Capital Ratio 35% 51% 35% 51%
Adjusted EBITDA (a) $73,084 $58,555 $127,094 $104,575
Rent Expense $23,618 $20,277 $47,282 $39,647
(a) Adjusted EBITDA is defined as income from continuing operations
before minority interests, income tax provision, other interest
expense, depreciation and amortization. While Adjusted 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, each of which is 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 Adjusted EBITDA:
Second Quarter Six Months
-----------------
2004 2003 2004 2003
-------- -------- -------- --------
Income from continuing operations
before minority interests and
income tax
provision $53.9 $ 40.2 $ 88.4 $ 68.9
Other interest expense 10.1 10.8 20.8 21.1
Depreciation and amortization 9.1 7.6 17.9 14.6
-------- -------- -------- --------
Adjusted EBITDA $73.1 $58.6 $127.1 $104.6
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