Hometown Auto Retailers Announces Third Quarter 2004 Results
WATERTOWN, Conn.--Nov. 1, 20042, 2004--Hometown Auto Retailers Inc. (OTC BB: HCAR) today announced its financial results for the third quarter ended Sept. 30, 2004.Hometown reported revenues of $69.3 million in the third quarter of 2004 versus revenues of $78.2 million for the same period in 2003, a decrease of $8.9 million or 11.4 percent. Hometown sold a Chrysler/Jeep sales and service franchise on June 3, 2003. At that time, sales of new vehicles along with parts and service stopped at that location while sales of used vehicles continued until August 2004. On a same store basis (excluding all revenues for the Chrysler/Jeep sales and service franchise sold in June 2003), revenues decreased $8.8 million or 11.3 percent to $69.0 million in the third quarter of 2004 from $77.8 million for the same period in 2003. Gross profit for the third quarter of 2004 decreased $1.1 million or 10.1 percent to $9.8 million versus gross profit of $10.9 million in same period in 2003. On a same store basis, gross profit decreased $1.0 million or 9.3 percent to $9.8 million for the third quarter of 2004 from $10.8 million for the same period in 2003.
Net income for the third quarter of 2004 was $570,000, generating basic and diluted earnings per share of $0.08 versus net income of $832,000 and basic and diluted earnings per share of $0.12 for the same period in 2003.
Hometown reported revenues of $203.9 million for the first nine months of 2004 versus revenues of $216.6 million for the same period in 2003, a decrease of $12.7 million or 5.9 percent. On a same store basis (excluding all revenues for the Chrysler/Jeep sales and service franchise sold in June 2003), revenues decreased $9.0 million or 4.2 percent to $202.8 million in the first nine months of 2004 from $211.8 million for the same period in 2003. Gross profit for the first nine months of 2004 decreased $1.8 million or 5.9 percent to $28.9 million versus gross profit of $30.7 million in same period in 2003. On a same store basis, gross profit decreased $1.3 million or 4.3 percent to $28.7 million for the first nine months of 2004 from $30.0 million for the same period in 2003.
Net income for the first nine months of 2004 was $905,000, generating basic and diluted earnings per share of $0.12 versus net income of $1.8 million and basic and diluted earnings per share of $0.25 for the same period in 2003. Results for the first nine months 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.
"Similar to several of the larger dealer groups, we saw market and margin challenges in Q3 consistent with the first half of the year," said Corey Shaker, Hometown president and chief executive officer. "However, as we have stated in the past, and with most of key management on commission-based versus salary-based pay plans, we have seen a reduction in SG&A of more than $1.3 million so far this year. On a long-term basis, we believe these and other savings (along with a hopeful improvement of the economy) will bring operational profitability back to levels better resembling 2003 further increasing shareholder value."
Hometown sold 3,459 vehicles during the third quarter of 2004, 414 less than it sold in the same period in 2003 or a decrease of 10.7 percent. Hometown sold 10,141 vehicles during the first nine months of 2004, 514 less than it sold in the same period in 2003 or a decrease of 4.8 percent. Total vehicles sold (by category) are shown in the table below.
Year-Over-Year Comparison For the three months For the nine months
ended Sept. 30, ended Sept. 30,
2004 2003 2004 2003
-------- -------- -------- --------
New vehicle 1,663 1,990 4,814 5,456
Used vehicle - retail 864 947 2,560 2,883
Used vehicle - wholesale 932 936 2,767 2,316
-------- -------- -------- --------
Total units sold 3,459 3,873 10,141 10,655
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On a same store basis, Hometown sold 3,431 vehicles during the third quarter of 2004, 417 less than it sold in the same period in 2003 or a decrease of 10.8 percent. Hometown sold 10,017 vehicles during the first nine months of 2004, 429 less than it sold in the same period in 2003 or a decrease of 4.1 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 1,663 1,990 4,814 5,363
Used vehicle - retail 846 911 2,455 2,772
Used vehicle - wholesale 922 947 2,748 2,311
-------- -------- -------- --------
Total units sold 3,431 3,848 10,017 10,446
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Revenue from the sale of new vehicles decreased $8.5 million or 16.1 percent to $44.3 million for the third quarter of 2004 versus $52.8 million in 2003. Revenues from the sale of used vehicles increased $55,000 or 0.3 percent to slightly more than $16.9 million for the third quarter of 2004 versus slightly less than $16.9 million in 2003. On a same store basis, revenues from the sale of used vehicles increased $140,000 or 0.8 percent to $16.7 million for the third quarter of 2004 versus $16.6 million in 2003. Parts and service revenues for the third quarter of 2004 decreased $236,000 or 3.8 percent to $6.0 million versus $6.2 million in 2003. Other revenues (net) decreased $222,000 or 9.7 percent to $2.1 million for the third quarter of 2004 versus $2.3 million for the same period in 2003. On a same store basis, other revenues (net) decreased $209,000 or 9.2 percent to $2.1 million for the third quarter of 2004 versus $2.3 million for the same period in 2003.
Revenue from the sale of new vehicles decreased $9.5 million or 6.8 percent to $130.2 million for the first nine months of 2004 versus $139.7 million in 2003. On a same store basis, revenue from the sale of new vehicles decreased $7.0 million or 5.1 percent to $130.2 million for the first nine months of 2004 versus $137.2 million in 2003. Revenue from the sale of used vehicles decreased $2.4 million or 4.6 percent to $49.6 million for the first nine months of 2004 versus $52.0 million in 2003. On a same store basis, revenue from the sale of used vehicles decreased $1.6 million or 3.2 percent to $48.6 million for the first nine months of 2004 versus $50.2 million in 2003. Parts and service revenues for the first nine months of 2004 decreased $557,000 or 3.0 percent to $18.1 million versus $18.7 million in 2003. On a same store basis, parts and service revenues decreased $124,000 or 0.7 percent to $18.1 million versus $18.2 million in 2003. Other revenues (net) decreased $290,000 or 4.6 percent to $6.0 million for the first nine months of 2004 versus $6.3 million for the same period in 2003. On a same store basis, other revenues (net) decreased $223,000 or 3.6 percent to $5.9 million for the first nine months of 2004 versus $6.1 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 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 Nine Months Ended Sept. 30, Ended Sept. 30, -------- -------- -------- -------- 2004 2003 2004 2003 -------- -------- -------- -------- Revenues New vehicle sales $44,291 $52,786 $130,182 $139,668 Used vehicle sales 16,943 16,888 49,633 52,021 Parts and service sales 5,984 6,220 18,098 18,655 Other, net 2,064 2,286 5,969 6,259 -------- -------- -------- -------- Total revenues 69,282 78,180 203,882 216,603 -------- -------- -------- -------- Cost of sales New vehicle 41,474 49,192 121,789 130,420 Used vehicle 15,359 15,243 44,921 47,006 Parts and service 2,697 2,830 8,269 8,463 -------- -------- -------- -------- Total cost of sales 59,530 67,265 174,979 185,889 -------- -------- -------- -------- Gross profit 9,752 10,915 28,903 30,714 Selling, general and administrative expenses 8,280 9,174 25,367 26,729 -------- -------- -------- -------- Income from operations 1,472 1,741 3,536 3,985 Interest income 53 22 134 36 Interest (expense) (802) (715) (2,487) (2,292) Other income 63 5 66 956 Other (expense) (5) - (9) (3) -------- -------- -------- -------- Pre-tax income 781 1,053 1,240 2,682 Provision for income taxes 211 221 335 888 -------- -------- -------- -------- Net income $570 $832 $905 $1,794 ======== ======== ======== ======== Earnings per share, basic $0.08 $0.12 $0.12 $0.25 ======== ======== ======== ======== Earnings per share, diluted $0.08 $0.12 $0.12 $0.25 ======== ======== ======== ======== Weighted average shares outstanding, basic 7,389,389 7,175,105 7,252,529 7,175,105 Weighted average shares outstanding, diluted 7,493,208 7,212,067 7,429,892 7,187,426 HOMETOWN AUTO RETAILERS INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) Sept. 30, Dec. 31, ASSETS 2004 2003 (Unaudited) ----------- -------- Current Assets: Cash and cash equivalents $5,224 $5,639 Accounts receivable, net 7,248 6,058 Inventories, net 38,686 37,774 Prepaid expenses and other current assets 672 625 Deferred and prepaid income taxes 1,216 1,349 -------- -------- Total current assets 53,046 51,445 Property and equipment, net 13,793 12,678 Other assets 1,067 1,141 -------- -------- Total assets $67,906 $65,264 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Floor plan notes payable $38,664 $38,003 Accounts payable and accrued expenses 5,699 5,798 Current maturities of long-term debt and capital lease obligations 1,148 996 Deferred revenue 818 609 -------- -------- Total current liabilities 46,329 45,406 Long-term debt and capital lease obligations 12,598 12,076 Long-term deferred income taxes 125 125 Other long-term liabilities and deferred revenue 764 729 -------- -------- Total liabilities 59,816 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 (21,934) (22,839) -------- -------- Total stockholders' equity 8,090 6,928 -------- -------- Total liabilities and stockholders' equity $67,906 $65,264 ======== ========