UnitedAuto Net Income Increases 30%; Revenues Increase 19%; Same-Store Retail Revenue Grows 8%; Earnings Per Share Rises 17% to $0.56 Per Share
BLOOMFIELD HILLS, Mich.--Feb. 9, 2005--United Auto Group, Inc. , a FORTUNE 500 automotive specialty retailer, today announced a 30.1% rise in fourth quarter net income and its 23rd consecutive quarter of record results. Fourth quarter results reflect an overall 19.2% increase in revenue, including continued strong same-store retail revenue growth of 7.6%. The same-store growth was highlighted by an 11.8% increase in service and parts revenue, driven by increases in units in operation and capacity increases at many locations. Same-store new and used vehicle retail revenue increased 5.8% and 7.8%, respectively, due primarily to increases at the Company's foreign and luxury franchises. Same-store finance and insurance revenue increased 34.1%, including an 11.7% increase in the sale of traditional finance and insurance products complemented by $9.2 million of revenue earned under a multi-year arrangement to promote satellite radios. Total revenue for the quarter increased to $2.5 billion and net income increased to $26.1 million, or $0.56 per share, from $20.1 million, or $0.48 per share, in the prior year. Earnings per share reflect an 11.0% increase in weighted average shares outstanding.For the year ended December 31, 2004, revenues increased 17.8% to $9.9 billion. Net income for the year increased 34.7% to $111.7 million, or $2.45 per share, from $82.9 million, or $2.00 per share, in the prior year. Full-year 2004 results include the $7.2 million after-tax gain ($0.16 per share) from the sale of an investment recorded in the second and third quarters. Excluding this gain, net income and earnings per share were $104.5 million and $2.29, respectively. Full-year results also include the $5.3 million after-tax gain ($0.11 per share) from a refund of UK consumption taxes and the $4.9 million of offsetting after-tax non-cash charges recorded in the third quarter ($0.11 per share). Prior year results include the effect of $5.0 million of after-tax non-recurring charges ($0.12 per share).
Commenting on the Company's results, Chairman Roger Penske said, "We are delighted with the performance of our business in 2004. While the overall market remained challenging, our business achieved same-store retail revenue growth of 6.1%, including 7.6% in the fourth quarter. We are pleased that all four lines of our business showed strong same-store growth, including 12.1% growth in our high-margin service and parts operations as our investment in additional capacity continues to reap benefits. I am also particularly pleased with the strong results from our international operations, which generated 26.6% of our 2004 revenues, and enjoyed 22.4% same-store retail revenue growth during the year."
Commenting further Penske said, "In 2005, we expect the overall retail market to remain competitive. With our strong brand mix and service capacity expansion program, we currently estimate same-store growth to be approximately 3% to 5% in 2005. We also expect to continue our selective acquisition program adding approximately $300 to $500 million in annualized revenues. These increases will be somewhat offset by the effect of rising interest rates on our business." Based on these estimates, the Company is currently projecting earnings per share in the range of $2.32 to $2.39 for 2005. Earnings per share in the first quarter are expected to be in the range of $0.44 to $0.48. These estimates are based on an estimated average of 47.0 million shares outstanding.
UnitedAuto will host a conference call discussing financial results relating to fourth quarter 2004 on Wednesday, February 9, 2005 at 1:30 p.m. ET. To listen to the conference call, participants must dial (800) 553-5260 (International, please dial (612) 332-0802). 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 152 franchises in the United States and 101 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. Statements in this press release involve forward-looking statements, including forward-looking statements regarding UnitedAuto's future sales and earnings growth potential. Actual results may vary materially because of risks and uncertainties, including 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 Form 10-K for the year ended December 31, 2003 and its other filings with the Securities and Exchange Commission, and which are incorporated into this press release by reference. This press release speaks only as of its date and UnitedAuto disclaims any duty to update the information herein.
UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Fourth Quarter
-----------------------
2004 2003
-----------------------
New Vehicles $1,442,993 $1,239,383
Used Vehicles 515,214 432,751
Finance and Insurance 66,875 46,873
Service and Parts 266,765 216,133
Fleet 26,215 16,364
Wholesale 176,012 141,702
-----------------------
Total Revenues 2,494,074 2,093,206
Cost of Sales 2,112,477 1,787,535
-----------------------
Gross Profit 381,597 305,671
SG&A Expenses 303,811 240,063
Depreciation and Amortization 9,927 8,392
-----------------------
Operating Income 67,859 57,216
Floor Plan Interest Expense (13,184) (11,704)
Other Interest Expense (11,686) (10,629)
-----------------------
Income from Continuing Operations Before
Minority Interests and Income Tax
Provision 42,989 34,883
Minority Interests (556) (589)
Income Tax Provision (15,993) (13,779)
-----------------------
Income from Continuing Operations 26,440 20,515
Loss from Discontinued Operations, Net of Tax (325) (438)
-----------------------
Net Income $26,115 $20,077
=======================
Income from Continuing Operations Per Diluted
Share $0.57 $0.49
=======================
Diluted EPS $0.56 $0.48
=======================
Diluted Weighted Average Shares Outstanding 46,689 42,059
=======================
UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Twelve Months
-----------------------
2004 2003
-----------------------
New Vehicles $5,683,368 $4,947,931
Used Vehicles 2,127,497 1,808,507
Finance and Insurance 231,830 202,307
Service and Parts 1,008,519 815,039
Fleet 127,993 99,998
Wholesale 707,004 515,403
-----------------------
Total Revenues 9,886,211 8,389,185
Cost of Sales 8,436,153 7,171,332
-----------------------
Gross Profit 1,450,058 1,217,853
SG&A Expenses 1,144,207 955,021
Depreciation and Amortization 42,146 30,689
-----------------------
Operating Income 263,705 232,143
Floor Plan Interest Expense (49,723) (42,697)
Other Interest Expense (42,973) (42,835)
Other Income 11,469 --
-----------------------
Income from Continuing Operations Before
Minority Interests and Income Tax
Provision 182,478 146,611
Minority Interests (2,047) (2,272)
Income Tax Provision (67,880) (57,916)
-----------------------
Income from Continuing Operations 112,551 86,423
Loss from Discontinued Operations, Net of Tax (864) (436)
-----------------------
Income Before Cumulative Effect of
Accounting Change 111,687 85,987
Cumulative Effect of Accounting Change -- (3,058)
-----------------------
Net Income $111,687 $82,929
=======================
Income from Continuing Operations Per Diluted
Share $2.47 $2.09
=======================
Diluted EPS before Cumulative Effect of
Accounting Change $2.45 $2.08
=======================
Cumulative Effect of Accounting Change on
Diluted EPS -- ($0.07)
=======================
Diluted EPS $2.45 $2.00
=======================
Diluted Weighted Average Shares Outstanding 45,613 41,434
=======================
UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts in Thousands)
(Unaudited)
12/31/04 12/31/03
-----------------------
Assets
Cash and Cash Equivalents $11,061 $13,076
Accounts Receivable, Net 382,098 346,367
Inventories 1,326,553 1,157,878
Other Current Assets 44,424 42,963
-----------------------
Total Current Assets 1,764,136 1,560,284
Property and Equipment, Net 414,718 366,070
Intangibles 1,247,210 1,083,166
Other Assets 87,117 89,007
Assets of Discontinued Operations 19,620 45,671
-----------------------
Total Assets $3,532,801 $3,144,198
=======================
Liabilities and Stockholders' Equity
Floor Plan Notes Payable $1,266,656 $1,114,766
Accounts Payable and Accrued Expenses 413,685 352,480
Current Portion Long-Term Debt 11,367 8,540
-----------------------
Total Current Liabilities 1,691,708 1,475,786
Long-Term Debt 574,970 643,145
Other Long-Term Liabilities 179,116 167,540
Liabilities of Discontinued Operations 11,972 29,315
-----------------------
Total Liabilities 2,457,766 2,315,786
Stockholders' Equity 1,075,035 828,412
-----------------------
Total Liabilities and Stockholders' Equity $3,532,801 $3,144,198
=======================
UNITED AUTO GROUP, INC.
Selected Data
Fourth Quarter Twelve Months
------------------------------------------------
2004 2003 2004 2003
------------------------------------------------
Units
New Retail Units 43,612 38,880 178,012 165,023
Used Retail Units 20,901 19,662 88,700 84,910
------------------------------------------------
Total Retail
Units 64,513 58,542 266,712 249,933
================================================
Same-Store Retail
Revenue
New Vehicles $1,296,659 $1,225,376 $4,975,561 $4,706,066
Used Vehicles 458,463 425,416 1,747,483 1,679,721
Finance and
Insurance 62,397 46,518 209,777 194,409
Service and Parts 237,246 212,263 862,902 769,561
------------------------------------------------
Total Same-
Store Retail
Revenue $2,054,765 $1,909,573 $7,795,723 $7,349,757
================================================
Same-Store Retail
Revenue Growth
New Vehicles 5.8% 8.0% 5.7% 6.6%
Used Vehicles 7.8% 5.4% 4.0% 7.8%
Finance and
Insurance 34.1% 6.6% 7.9% 12.7%
Service and Parts 11.8% 10.0% 12.1% 8.8%
Revenue Mix
New Vehicles 57.9% 59.2% 57.5% 59.0%
Used Vehicles 20.7% 20.7% 21.5% 21.6%
Finance and
Insurance 2.7% 2.2% 2.3% 2.4%
Service and Parts 10.7% 10.3% 10.2% 9.7%
Fleet 1.0% 0.8% 1.3% 1.2%
Wholesale 7.0% 6.8% 7.2% 6.1%
Retail Gross Margin -
by Product
New Vehicles 8.8% 8.6% 8.6% 8.4%
Used Vehicles 8.6% 8.5% 8.8% 9.1%
Finance and
Insurance 100.0% 100.0% 100.0% 100.0%
Service and Parts 54.4% 53.7% 53.9% 53.4%
Gross Profit per
Transaction
New Vehicles $2,897 $2,732 $2,734 $2,517
Used Vehicles 2,109 1,863 2,113 1,932
Finance and
Insurance 1,037 801 870 809
UNITED AUTO GROUP, INC.
Selected Data (Continued)
Fourth Quarter Twelve Months
-------------------------------------
2004 2003 2004 2003
-------------------------------------
Brand Mix:
Toyota/Lexus 21% 23% 22% 22%
BMW 14% 15% 15% 14%
Honda/Acura 13% 10% 11% 12%
Mercedes 10% 11% 10% 10%
General Motors 8% 9% 8% 10%
Ford Premier Group 8% 8% 8% 8%
Audi 6% 4% 4% 3%
Chrysler 4% 6% 5% 6%
Nissan/Infiniti 4% 4% 4% 4%
Ford 3% 4% 4% 4%
Other 9% 6% 9% 7%
Debt to Total Capital Ratio 35% 44% 35% 44%
Adjusted EBITDA (a) $64,602 $53,904 $267,597 $220,135
Rent Expense $27,083 $21,501 $100,697 $81,747
(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:
Fourth Quarter Twelve Months
---------------- ---------------
2004 2003 2004 2003
---------------- ---------------
Income from continuing operations
before minority interests and income
tax
provision $ 43.0 $ 34.9 $ 182.5 $146.6
Other interest expense 11.7 10.6 43.0 42.8
Depreciation and amortization 9.9 8.4 42.1 30.7
--------------------------------
Adjusted EBITDA $64.6 $53.9 $267.6 $220.1
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