Hometown Auto Retailers Announces 2004 Annual Results
WATERBURY, Conn.--March 24, 2005--Hometown Auto Retailers Inc. (OTC BB: HCAR) today announced its audited financial results for the year ended Dec. 3, 20041, 2004.Hometown reported revenues of $265.3 million in 2004 versus revenues of $279.8 million in 2003, a decrease of 5.2 percent. Gross profit was $38.0 million for 2004 versus $39.7 million in 2003, a decrease of 4.3 percent.
Hometown's net income for 2004 increased approximately $1.3 million to $3.7 million, generating basic and diluted earnings per share of $0.51 and $0.50, respectively, versus net income of $2.4 million and basic and diluted earnings per share of $0.33 for the same period in 2003.
Results for 2004 reflect a reduction in an income tax valuation allowance plus other tax adjustments, which had the effect of increasing net income by approximately $2.8 million and generating basic and diluted earnings per share of $0.38 and $0.37, respectively. By comparison, 2003 results reflect a reduction in an income tax valuation allowance plus other tax adjustments, which had the effect of increasing net income by approximately $633,000 and generating basic and diluted earnings per share of $0.09. Results for 2003 also reflect earnings of $0.08 per share from a gain on the sale of a Chrysler/Jeep sales and service franchise in June 2003.
"2004 was a challenge for many dealer groups, both public and private, and we have experienced similar challenges at Hometown," said Corey Shaker, Hometown president and chief executive officer. "However, we have successfully attempted to adjust as evidenced in part with our SG&A reduction of almost $1.5 million. We are pleased that we were able to recently announce the cessation and settlement of most of our litigation matters, which (as a result) will enable us to provide even better focus on our operations in 2005. We will strive for continued improvements in margins and particularly at finance and insurance during 2005, and like our counterparts, we'll be looking hard at controlling inventories and resulting floor plan expenses."
Hometown sold 13,120 vehicles during 2004, 617 fewer than it sold in the same period in 2003. Total vehicles sold (by category) are shown in the table below.
For the Year Ended Dec. 31,
2004 2003
--------- ---------
New vehicle 6,215 6,910
Used vehicle - retail 3,329 3,683
Used vehicle - wholesale 3,576 3,144
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Total units sold 13,120 13,737
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Hometown sold a Chrysler/Jeep new car franchise on June 3, 2003. On a same store basis (excluding the Chrysler/Jeep revenues for all periods) Hometown sold 12,996 vehicles during 2004, 492 fewer than it sold in the same period in 2003. Total vehicles sold (by category) on a same store basis are shown in the table below.
For the Year Ended Dec. 31,
(same store basis)
2004 2003
--------- ---------
New vehicle 6,215 6,816
Used vehicle - retail 3,224 3,531
Used vehicle - wholesale 3,557 3,141
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Total units sold 12,996 13,488
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Sales of new vehicles decreased $12.7 million or 7.0 percent to $167.9 million for 2004 versus $180.6 million in 2003. On a same store basis, sales of new vehicles decreased $10.2 million or 5.7 percent to $167.9 million for 2004 versus $178.1 million in 2003. Used vehicle sales decreased $1.2 million or 1.8 percent to $65.3 million for 2004 versus $66.5 million in 2003. On a same store basis, used vehicle sales decreased $141,000 or 0.2 percent to $64.3 million for 2004 versus $64.4 million in 2003. Parts and service revenues decreased $402,000 or 1.6 percent to $24.2 million for 2004 versus $24.6 million in 2003. On a same store basis, parts and service revenues for 2004 increased $32,000 or less than 1.0 percent to $24.2 million versus $24.2 million in 2003. Other revenues (net) decreased 2.4 percent or $194,000 to $7.8 million for 2004 versus $8.0 million for the same period in 2003. On a same store basis, other revenues (net) decreased 1.4 percent or $110,000 to $7.8 million for 2004 versus $7.9 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.
This release contains "forward-looking statements" based on current expectations, but involving known and unknown risks and uncertainties. Actual results or achievements may be materially different from those expressed or implied. The company's plans and objectives are based on assumptions involving judgments with respect to future economic, competitive and market conditions, its ability to consummate, and the timing of acquisitions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the company. Therefore, there can be no assurance that any forward-looking statement will prove to be accurate.
HOMETOWN AUTO RETAILERS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
For the Years Ended Dec. 31,
--------------------------------
2004 2003 2002
---------- ---------- ----------
Revenues
New vehicle sales $167,932 $180,615 $164,659
Used vehicle sales 65,326 66,543 72,482
Parts and service sales 24,219 24,621 24,330
Other, net 7,804 7,998 8,268
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Total revenues 265,281 279,777 269,739
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Cost of sales
New vehicle 157,211 168,579 154,225
Used vehicle 59,053 60,152 65,821
Parts and service 11,043 11,299 11,026
---------- ---------- ----------
Total Cost of sales 227,307 240,030 231,072
---------- ---------- ----------
Gross profit 37,974 39,747 38,667
Selling, general and administrative
expenses 33,371 34,840 34,152
---------- ---------- ----------
Income from operations 4,603 4,907 4,515
---------- ---------- ----------
Interest income 204 82 43
Interest (expense) (3,281) (3,037) (3,205)
Other income 135 956 52
Other (expense) (9) (3) (158)
---------- ---------- ----------
Income before taxes and
cumulative effect of
accounting change 1,652 2,905 1,247
Provision (benefit) for income
taxes (2,096) 527 471
---------- ---------- ----------
Income before cumulative
effect of accounting change 3,748 2,378 776
Cumulative effect of
accounting change - - (23,708)
---------- ---------- ----------
Net income (loss) $3,748 $2,378 $(22,932)
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Earnings (loss) per share, basic
Before cumulative effect of
accounting change $0.51 $0.33 $0.10
Cumulative effect of accounting
change - - (3.30)
---------- ---------- ----------
Earnings (loss) per share, basic $0.51 $0.33 $(3.20)
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Earnings (loss) per share, diluted
Before cumulative effect of
accounting change $0.50 $0.33 $0.10
Cumulative effect of accounting
change - - (3.30)
---------- ---------- ----------
Earnings (loss) per share, diluted $0.50 $0.33 $(3.20)
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Weighted average shares outstanding,
basic 7,286,931 7,175,105 7,175,105
Weighted average shares outstanding,
diluted 7,439,024 7,215,492 7,175,105
HOMETOWN AUTO RETAILERS INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
Dec. 31,
--------------------
ASSETS 2004 2003
--------- ---------
Current Assets:
Cash and cash equivalents $6,101 $5,639
Accounts receivable, net 5,081 6,058
Inventories, net 43,440 37,774
Prepaid expenses and other current assets 634 625
Deferred and prepaid income taxes 1,464 1,349
--------- ---------
Total current assets 56,720 51,445
Property and equipment, net 13,854 12,678
Other assets 3,649 1,141
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Total assets $74,223 $65,264
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Floor plan notes payable $42,474 $38,003
Accounts payable and accrued expenses 5,106 5,798
Current maturities of long-term debt and
capital lease obligations 5,505 996
Deferred revenue 735 609
--------- ---------
Total current liabilities 53,820 45,406
Long-term debt and capital lease obligations 8,621 12,076
Long-term deferred income taxes 123 125
Other long-term liabilities and deferred revenue 726 729
--------- ---------
Total liabilities 63,290 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, respectively 3 3
Additional paid-in capital 30,017 29,760
Accumulated deficit (19,091) (22,839)
--------- ---------
Total stockholders' equity 10,933 6,928
--------- ---------
Total liabilities and stockholders' equity $74,223 $65,264
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