Hometown Auto Retailers Announces Second Quarter 2004 Results
WATERTOWN, Conn.--Aug. 1, 20041, 2004--Hometown Auto Retailers, Inc. (OTCBB:HCAR) today announced its financial results for the second quarter ended June 30, 2004.Hometown reported revenues of $68.7 million in the second quarter of 2004 versus revenues of $78.1 million for the same period in 2003, a decrease of $9.4 million or 12.0 percent. On a same store basis (excluding the Chrysler/Jeep sales and service franchise sold in June 2003), revenues decreased $8.4 million or 10.9 percent to $68.7 million in the second quarter of 2004 from $77.1 million for the same period in 2003. Gross profit for the second quarter of 2004 decreased $1.2 million or 11.1 percent to $9.6 million versus gross profit of $10.8 million in same period in 2003. On a same store basis, gross profit decreased $997,000 or 9.4 percent to $9.6 million for the second quarter of 2004 from $10.6 million for the same period in 2003.
Net income for the second quarter of 2004 was $233,000, generating basic and diluted earnings per share of $0.03 versus net income of $1.1 million and basic and diluted earnings per share of $0.15 for the same period in 2003. Results for the second quarter of 2003 include earnings of $0.08 per share from a gain on the sale of a Chrysler/Jeep sales and service franchise in June 2003.
Hometown reported revenues of $134.6 million for the first half of 2004 versus revenues of $138.4 million for the same period in 2003, a decrease of $3.8 million or 2.7 percent. On a same store basis (excluding the Chrysler/Jeep sales and service franchise sold in June 2003), revenues decreased $876,000 or 0.6 percent to $134.6 million in the first half of 2004 from $135.5 million for the same period in 2003. Gross profit for the first half of 2004 decreased $648,000 or 3.3 percent to $19.2 million versus gross profit of $19.8 million in same period in 2003. On a same store basis, gross profit decreased $239,000 or 1.2 percent to $19.2 million for the first half of 2004 from $19.4 million for the same period in 2003.
Net income for the first half of 2004 was $335,000, generating basic and diluted earnings per share of $0.05 versus net income of $962,000 and basic and diluted earnings per share of $0.13 for the same period in 2003. Results for the first half of 2003 include earnings of $0.08 per share from a gain on the sale of a Chrysler/Jeep sales and service franchise in June 2003.
"We were disappointed with both revenue and profit results for the first half of 2004," said Corey Shaker, Hometown president and chief executive officer. "We are continuing to look for reductions in costs without hurting efficiency and our marketing efforts. We have made some strategic moves toward these goals. We have just recently completed the purchase of the real estate that houses our Chrysler Dodge and Jeep store in Brattleboro, Vermont. This real estate purchase will allow the company to save more than $2 million versus continuing the existing lease. In addition, we have been successful in converting several key management positions to more commission-based versus salary-based pay plans. Recent reports show improving July sales industry wide, and if these trends continue, we feel we will benefit from some of the cost savings we have and will be implementing."
Hometown sold 3,368 vehicles during the second quarter of 2004, 498 less than it sold in the same period in 2003 or a decrease of 12.9 percent. Hometown sold 6,682 vehicles during the first half of 2004, 100 less than it sold in the same period in 2003 or a decrease of 1.5 percent. Total vehicles sold (by category) are shown in the table below.
Year-Over-Year Comparison For the three months For the six months
ended June 30, ended June 30,
2004 2003 2004 2003
------- ------- ------- -------
New vehicle 1,655 2,098 3,151 3,466
Used vehicle - retail 781 1,000 1,696 1,936
Used vehicle - wholesale 932 768 1,835 1,380
------- ------- ------- -------
Total units sold 3,368 3,866 6,682 6,782
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On a same store basis, Hometown sold 3,368 vehicles during the second quarter of 2004, 468 less than it sold in the same period in 2003 or a decrease of 12.2 percent. Hometown sold 6,682 vehicles during the first half of 2004, 7 less than it sold in the same period in 2003 or a decrease of 0.1 percent. Total vehicles sold (by category) on a same store basis are shown in the table below.
Same Store Basis Comparison For the three months For the six months
ended June 30, ended June 30,
2004 2003 2004 2003
-------- -------- --------- ---------
New vehicle 1,655 2,068 3,151 3,373
Used vehicle - retail 781 1,000 1,696 1,936
Used vehicle - wholesale 932 768 1,835 1,380
-------- -------- --------- ---------
Total units sold 3,368 3,836 6,682 6,689
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Sales of new vehicles decreased $6.2 million or 12.2 percent to $44.8 million for the second quarter of 2004 versus $51.0 million in 2003. On a same store basis, sales of new vehicles decreased $5.3 million or 10.6 percent to $44.8 million for the second quarter of 2004 versus $50.1 million in 2003. Used vehicle sales decreased $2.9 million or 15.5 percent to $15.8 million for the second quarter of 2004 versus $18.7 million in 2003. Parts and service revenues for the second quarter of 2004 decreased $65,000 or 1.0 percent to slightly less than $6.2 million versus slightly more than $6.2 million in 2003. On a same store basis, parts and service revenues increased $122,000 or 2.0 percent to $6.2 million versus $6.0 million in 2003. Other revenues (net) decreased $180,000 or 8.2 percent to $2.0 million for the second quarter of 2004 versus $2.2 million for the same period in 2003. On a same store basis, other revenues (net) decreased $173,000 or 7.9 percent to $2.0 million for the second quarter of 2004 versus $2.2 million for the same period in 2003.
Sales of new vehicles decreased $991,000 or 1.1 percent to $85.9 million for the first half of 2004 versus $86.9 million in 2003. On a same store basis, sales of new vehicles increased $1.5 million or 1.8 percent to $85.9 million for the first half of 2004 versus $84.4 million in 2003. Used vehicle sales decreased $2.4 million or 6.8 percent to $32.7 million for the first half of 2004 versus $35.1 million in 2003. Parts and service revenues for the first half of 2004 decreased $322,000 or 2.6 percent to $12.1 million versus $12.4 million in 2003. On a same store basis, parts and service revenues increased $112,000 or 0.9 percent to $12.1 million versus $12.0 million in 2003. Other revenues (net) decreased $67,000 or 1.7 percent to $3.9 million for the first half of 2004 versus $4.0 million for the same period in 2003.
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 nine franchised dealerships and one stand-alone used car facility located in New Jersey, New York, Connecticut, Massachusetts and Vermont. The company's dealerships offer nine American and Asian automotive brands, including Chevrolet, Chrysler, Dodge, Ford, Jeep, Lincoln, Mazda, Mercury, 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.
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,
---------------------- ----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Revenues
New vehicle sales $ 44,776 $ 50,952 $ 85,891 $ 86,882
Used vehicle sales 15,780 18,739 32,690 35,133
Parts and service sales 6,155 6,219 12,114 12,435
Other, net 2,011 2,193 3,905 3,973
---------- ---------- ---------- ----------
Total revenues 68,722 78,103 134,600 138,423
Cost of sales
New vehicle 41,960 47,668 80,315 81,228
Used vehicle 14,318 16,945 29,562 31,763
Parts and service 2,813 2,711 5,572 5,633
---------- ---------- ---------- ----------
Total cost of sales 59,091 67,324 115,449 118,624
---------- ---------- ---------- ----------
Gross profit 9,631 10,779 19,151 19,799
Selling, general and
administrative expenses 8,466 9,109 17,087 17,555
---------- ---------- ---------- ----------
Income from
operations 1,165 1,670 2,064 2,244
Interest income 37 7 81 14
Interest (expense) (884) (799) (1,685) (1,577)
Other income 1 938 3 951
Other (expense) - - (4) (3)
---------- ---------- ---------- ----------
Pre-tax income 319 1,816 459 1,629
Provision for
income taxes 86 733 124 667
---------- ---------- ---------- ----------
Net income $ 233 $ 1,083 $ 335 $ 962
========== ========== ========== ==========
Earnings per share,
basic $ 0.03 $ 0.15 $ 0.05 $ 0.13
========== ========== ========== ==========
Earnings per share,
diluted $ 0.03 $ 0.15 $ 0.05 $ 0.13
========== ========== ========== ==========
Weighted average shares
outstanding, basic 7,191,588 7,175,105 7,183,347 7,175,105
Weighted average shares
outstanding, diluted 7,324,514 7,175,105 7,397,886 7,175,105
HOMETOWN AUTO RETAILERS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
June 30, December 31,
ASSETS 2004 2003
(Unaudited)
---------- -----------
Current Assets:
Cash and cash equivalents $ 7,082 $ 5,639
Accounts receivable, net 5,871 6,058
Inventories, net 49,791 37,774
Prepaid expenses and other current assets 640 625
Deferred and prepaid income taxes 1,416 1,349
-------- --------
Total current assets 64,800 51,445
Property and equipment, net 13,906 12,678
Other assets 1,085 1,141
-------- --------
Total assets $ 79,791 $ 65,264
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Floor plan notes payable $ 50,558 $ 38,003
Accounts payable and accrued expenses 5,815 5,798
Current maturities of long-term debt and
capital lease obligations 1,155 996
Deferred revenue 916 609
-------- --------
Total current liabilities 58,444 45,406
Long-term debt and capital lease obligations 12,900 12,076
Long-term deferred income taxes 125 125
Other long-term liabilities and deferred revenue 802 729
-------- --------
Total liabilities 72,271 58,336
Commitments and Contingencies
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, 3,870,137
and 3,655,853 shares issued and outstanding,
respectively 4 4
Common stock, Class B, $.001 par value,
3,760,000 shares authorized, 3,519,252
shares issued and outstanding 3 3
Additional paid-in capital 30,017 29,760
Accumulated deficit (22,504) (22,839)
-------- --------
Total stockholders' equity 7,520 6,928
-------- --------
Total liabilities and stockholders'
equity $ 79,791 $ 65,264
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