Hometown Auto Retailers Announces Second Quarter 2005 Results
WATERBURY, Conn.--Aug. 1, 20052, 2005--Hometown Auto Retailers, Inc. (OTCBB:HCAR) today announced its financial results for the second quarter ended June 30, 2005.Hometown reported revenues of $65.3 million in the second quarter of 2005 versus revenues of $68.7 million for the same period in 2004, a decrease of $3.4 million or 4.9 percent. Gross profit for the second quarter of 2005 decreased $268,000 or 2.8 percent to $9.4 million versus gross profit of $9.6 million in same period in 2004.
Net income for the second quarter of 2005 was $834,000, generating basic and diluted earnings per share of $0.13 versus net income of $233,000 and basic and diluted earnings per share of $0.03 for the same period in 2004. Results for the second quarter of 2005 include earnings of $0.05 per share from a gain on the transfer of the Westwood Lincoln Mercury dealership resulting from the settlement of certain litigation matters.
Hometown reported revenues of $127.1 million for the first half of 2005 versus revenues of $134.6 million for the same period in 2004, a decrease of $7.5 million or 5.6 percent. Gross profit for the first half of 2005 decreased $482,000 or 2.5 percent to $18.7 million versus gross profit of $19.2 million in same period in 2004.
Net income for the first half of 2005 was $1.1 million, generating basic and diluted earnings per share of $0.16 versus net income of $335,000 and basic and diluted earnings per share of $0.05 for the same period in 2004. Results for the first half of 2005 include earnings of $0.05 per share from a gain on the transfer of the Westwood Lincoln Mercury dealership resulting from the settlement of certain litigation matters.
Hometown's operating results reflect the closing of a used vehicles outlet in August 2004. Also, during the fourth quarter of 2004, Hometown announced that it had agreed in principal to resolve certain litigation matters, which resulted in the transfer of the Westwood Lincoln Mercury dealership during the second quarter of 2005. Closing the used vehicles outlets and transferring the Westwood Lincoln Mercury dealership both contributed to decreases in sales and gross profit from 2004 to 2005, as well as a decrease in selling, general and administrative expenses. Operating results of all other dealerships on a same store basis, follows.
On a same store basis, revenues increased $4.7 million or 8.4 percent to $60.5 million in the second quarter of 2005 from $55.8 million for the same period in 2004. Same store gross profit increased $387,000 or 4.6 percent to $8.8 million for the second quarter of 2005 from $8.4 million for the same period in 2004.
On a same store basis, revenues increased $4.3 million or 3.9 percent to $115.2 million in the first half of 2005 from $110.9 million for the same period in 2004. Same store gross profit increased $434,000 or 2.6 percent to $17.1 million for the first half of 2005 from $16.6 million for the same period in 2004.
"We are pleased again to report a higher net profit for the second quarter and first six months of 2005 versus 2004," said Corey Shaker, Hometown president and chief executive officer. "On a same store basis, sales and gross profits increased while we managed to decrease same store SG&A. In addition, our team has done an excellent job of reducing inventories that will inevitably reduce carrying costs into the future. I am proud to say we have been looking very hard at the basics of our business and will continue to do so into the future. We are trying to maximize every transaction at the dealership level while maintaining a competitive position in our marketplace."
Hometown sold 3,243 vehicles during the second quarter of 2005, 125 less than it sold in the same period in 2004 or a decrease of 3.7 percent. Hometown sold 6,110 vehicles during the first half of 2005, 572 less than it sold in the same period in 2004 or a decrease of 8.6 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 2004 2004 2004
-------- -------- -------- --------
New vehicle 1,540 1,655 2,977 3,151
Used vehicle - retail 757 781 1,494 1,696
Used vehicle - wholesale 946 932 1,639 1,835
-------- -------- -------- --------
Total units sold 3,243 3,368 6,110 6,682
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On a same store basis, Hometown sold 3,099 vehicles during the second quarter of 2005, 142 more than it sold in the same period in 2004 or an increase of 4.8 percent. On a same store basis, Hometown sold 5,761 vehicles during the first half of 2005, 174 less than it sold in the same period in 2004 or a decrease of 2.9 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 2004 2004 2004
-------- -------- ------- -------
New vehicle 1,437 1,369 2,732 2,638
Used vehicle - retail 751 701 1,449 1,535
Used vehicle - wholesale 911 887 1,580 1,762
-------- -------- ------ -------
Total units sold 3,099 2,957 5,761 5,935
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Sales of new vehicles decreased $4.2 million or 9.4 percent to $40.6 million for the second quarter of 2005 versus $44.8 million in 2004. Used vehicle sales increased $1.1 million or 7.0 percent to $16.9 million for the second quarter of 2005 versus $15.8 million in 2004. Parts and service revenues for the second quarter of 2005 decreased $246,000 or 4.0 percent to $5.9 million versus $6.2 million in 2004. Other revenues (net) decreased $196,000 or 9.8 percent to $1.8 million for the second quarter of 2005 versus $2.0 million for the same period in 2004.
On a same store basis, sales of new vehicles increased $2.2 million or 6.4 percent to $36.7 million for the second quarter of 2005 versus $34.5 million in 2004. Same store sales of used vehicles increased $2.2 million or 15.4 percent to $16.5 million for the second quarter of 2005 versus $14.3 million in 2004. Same store parts and service revenues increased $305,000 or 6.0 percent to $5.4 million for the second quarter of 2005 versus $5.1 million in 2003. Same store other revenues (net) decreased $61,000 or 3.2 percent to $1.8 million for the second quarter of 2005 versus $1.9 million for the same period in 2004.
Sales of new vehicles decreased $7.2 million or 8.4 percent to $78.7 million for the first half of 2005 versus $85.9 million in 2004. Used vehicle sales decreased $209,000 or 0.6 percent to $32.5 million for the first half of 2005 versus $32.7 million in 2004. Parts and service revenues for the first half of 2005 decreased $49,000 or 0.4 percent to slightly less than $12.1 million from slightly more than $12.1 million in 2004. Other revenues (net) decreased $65,000 or 1.7 percent to $3.8 million for the first half of 2005 versus $3.9 million for the same period in 2004.
On a same store basis, sales of new vehicles increased $2.1 million or 3.1 percent to $69.6 million for the first half of 2005 versus $67.5 million in 2004. Same store sales of used vehicles increased $1.5 million or 5.0 percent to $31.3 million for the first half of 2005 versus $29.8 million in 2004. Same store parts and service revenues increased $484,000 or 4.8 percent to $10.6 million for the first half of 2005 versus $10.1 million in 2003. Same store other revenues (net) increased $145,000 or 4.0 percent to $3.7 million for the first half of 2005 versus $3.6 million for the same period in 2004.
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 eight 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 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,
---------------------- ----------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues
New vehicle sales $ 40,645 $ 44,776 $ 78,670 $ 85,891
Used vehicle sales 16,921 15,780 32,481 32,690
Parts and service
sales 5,909 6,155 12,065 12,114
Other, net 1,815 2,011 3,840 3,905
---------- ---------- ---------- ----------
Total revenues 65,290 68,722 127,056 134,600
Cost of sales
New vehicle 37,911 41,960 73,503 80,315
Used vehicle 15,368 14,318 29,371 29,562
Parts and service 2,648 2,813 5,513 5,572
---------- ---------- ---------- ----------
Total cost of
sales 55,927 59,091 108,387 115,449
---------- ---------- ---------- ----------
Gross profit 9,363 9,631 18,669 19,151
Selling, general and
administrative
expenses 7,699 8,493 15,708 17,141
---------- ---------- ---------- ----------
Income from
operations 1,664 1,138 2,961 2,010
Interest income 59 37 129 81
Interest (expense) (924) (857) (1,844) (1,631)
Other income 589 1 591 3
Other (expense) - - - (4)
---------- ---------- ---------- ----------
Pre-tax income 1,388 319 1,837 459
Provision for
income taxes 554 86 735 124
---------- ---------- ---------- ----------
Net income $ 834 $ 233 $ 1,102 $ 335
========== ========== ========== ==========
Earnings per share,
basic $ 0.13 $ 0.03 $ 0.16 $ 0.05
========== ========== ========== ==========
Earnings per share,
diluted $ 0.13 $ 0.03 $ 0.16 $ 0.05
========== ========== ========== ==========
Weighted average shares
outstanding, basic 6,449,389 7,191,588 6,766,185 7,183,347
Weighted average shares
outstanding, diluted 6,584,446 7,324,514 6,895,987 7,397,886
HOMETOWN AUTO RETAILERS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
June 30, December 31,
ASSETS 2005 2004
(Unaudited) (Restated)
----------- ------------
Current Assets:
Cash and cash equivalents $ 5,050 $ 6,101
Accounts receivable, net 5,467 5,081
Inventories, net 32,013 43,440
Prepaid expenses and other current assets 1,011 634
Deferred and prepaid income taxes 1,464 1,464
--------- ---------
Total current assets 45,005 56,720
Property and equipment, net 13,264 13,854
Other assets 2,955 3,649
--------- ---------
Total assets $ 61,224 $ 74,223
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Floor plan notes payable - trade $ 8,440 $ 17,382
Floor plan notes payable - non-trade 21,907 25,092
Accounts payable and accrued expenses 4,784 5,106
Current maturities of long-term debt and
capital lease obligations 5,400 5,505
Deferred revenue 562 735
--------- ---------
Total current liabilities 41,093 53,820
Long-term debt and capital lease obligations 8,302 8,621
Long-term deferred income taxes 123 123
Other long-term liabilities and deferred
revenue 714 726
--------- ---------
Total liabilities 50,232 63,290
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
shares issued and outstanding 4 4
Common stock, Class B, $.001 par value,
3,760,000 shares authorized, 2,579,252 and
3,519,252 shares issued, respectively 2 3
Additional paid-in capital 28,975 30,017
Accumulated deficit (17,989) (19,091)
--------- ---------
Total stockholders' equity 10,992 10,933
--------- ---------
Total liabilities and stockholders'
equity $ 61,224 $ 74,223
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