Hometown Auto Retailers Announces Third Quarter 2005 Results
WATERBURY, Conn.--Nov. 1, 20054, 2005--Hometown Auto Retailers Inc. (OTCBB: HCAR) today announced its financial results for the third quarter ended Sept. 30, 2005.Hometown reported revenues of $61.3 million in the third quarter of 2005 versus revenues of $69.3 million for the same period in 2004, a decrease of $8.0 million or 11.5 percent. Gross profit for the third quarter of 2005 decreased $1.1 million or 11.2 percent to $8.7 million versus gross profit of $9.8 million in same period in 2004.
Net income for the third quarter of 2005 was $143,000, generating basic and diluted earnings per share of $0.02 versus net income of $570,000 and basic and diluted earnings per share of $0.08 for the same period in 2004. Results for the third quarter of 2005 include expenses of approximately $474,000 in relation to its previously disclosed Exchange Agreement and $83,000 in relation to the associated previously disclosed class action lawsuit.
Hometown reported revenues of $188.4 million for the first nine months of 2005 versus revenues of $203.9 million for the same period in 2004, a decrease of $15.5 million or 7.6 percent. Gross profit for the first nine months of 2005 decreased $1.5 million or 5.2 percent to $27.4 million versus gross profit of $28.9 million in same period in 2004.
Net income for the first nine months of 2005 was $1.2 million, generating basic and diluted earnings per share of $0.19 and $0.18, respectively, versus net income of $905,000 and basic and diluted earnings per share of $0.12 for the same period in 2004. Results for the first nine months of 2005 include a gain on the transfer of the Westwood Lincoln Mercury dealership resulting from the settlement of certain litigation matters of $587,000 and expenses of approximately $474,000 in relation to its previously disclosed Exchange Agreement and $83,000 in relation to the associated previously disclosed class action lawsuit.
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 outlet 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.
"Discounting the exchange and litigation costs, and as reflected in the same store results (which are broken out below), Hometown's operations (including corporate overhead) had slight improvement over last year," said Corey Shaker, Hometown president and chief executive officer. "This despite the significantly lower margins the domestic dealerships suffered as a result of the employee discount and family plans offered to the public during the quarter. Focusing on the basics of used cars, parts, and service (our higher margin departments) will be critical in the upcoming months to ensure the best results possible in times that are not so favorable for our industry."
Hometown sold 3,111 vehicles during the third quarter of 2005, 348 less than it sold in the same period in 2004 or a decrease of 10.1 percent. Hometown sold 9,221 vehicles during the first nine months of 2005, 920 less than it sold in the same period in 2004 or a decrease of 9.1 percent. Total vehicles sold (by category) are shown in the table below.
Year-Over-Year Comparison For the three For the nine
months ended months ended
Sept. 30, Sept. 30,
2005 2004 2005 2004
-------- ------- -------- --------
New vehicle 1,522 1,663 4,499 4,814
Used vehicle - retail 745 864 2,239 2,560
Used vehicle - wholesale 844 932 2,483 2,767
-------- -------- ------- --------
Total units sold 3,111 3,459 9,221 10,141
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Sales of new vehicles decreased $5.9 million or 13.5 percent to $37.9 million for the third quarter of 2005 versus $43.8 million in 2004. Used vehicle sales decreased $1.2 million or 7.1 percent to $15.7 million for the third quarter of 2005 versus $16.9 million in 2004. Parts and service revenues for the third quarter of 2005 decreased $738,000 or 12.3 percent to $5.2 million versus $6.0 million in 2004. Other revenues (net) decreased $243,000 or 11.6 percent to $1.8 million for the third quarter of 2005 versus $2.1 million for the same period in 2004.
Sales of new vehicles decreased $14.2 million or 11.0 percent to $114.9 million for the first nine months of 2005 versus $129.1 million in 2004. Used vehicle sales decreased $1.4 million or 2.8 percent to $48.2 million for the first nine months of 2005 versus $49.6 million in 2004. Parts and service revenues for the first nine months of 2005 decreased $787,000 or 4.3 percent to $17.3 million from $18.1 million in 2004. Other revenues (net) decreased $308,000 or 5.1 percent to $5.7 million for the first nine months of 2005 versus $6.0 million for the same period in 2004.
The operating results of all other dealerships on a same store basis, follows.
On a same store basis, revenues increased $1.8 million or 3.0 percent to $61.3 million in the third quarter of 2005 from $59.5 million for the same period in 2004. Same store gross profit increased $92,000 or 1.1 percent to $8.7 million for the third quarter of 2005 from $8.6 million for the same period in 2004.
On a same store basis, revenues increased $6.1 million or 3.6 percent to $176.5 million in the first nine months of 2005 from $170.4 million for the same period in 2004. Same store gross profit increased $595,000 or 2.4 percent to $25.8 million for the first nine months of 2005 from $25.2 million for the same period in 2004.
On a same store basis, Hometown sold 3,111 vehicles during the third quarter of 2005, 21 less than it sold in the same period in 2004 or a decrease of 0.7 percent. On a same store basis, Hometown sold 8,872 vehicles during the first nine months of 2005, 195 less than it sold in the same period in 2004 or a decrease of 2.2 percent. Total vehicles sold (by category) on a same store basis are shown in the table below.
Same Store Basis Comparison For the three For the nine
months ended months ended
Sept. 30, Sept. 30,
2005 2004 2005 2004
------- ------- -------- --------
New vehicle 1,522 1,459 4,254 4,097
Used vehicle - retail 745 805 2,194 2,340
Used vehicle - wholesale 844 868 2,424 2,630
------- ------- -------- --------
Total units sold 3,111 3,132 8,872 9,067
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On a same store basis, sales of new vehicles increased $1.4 million or 3.8 percent to $38.5 million for the third quarter of 2005 versus $37.1 million in 2004. Same store sales of used vehicles increased $272,000 or 1.8 percent to $15.7 million for the third quarter of 2005 versus $15.5 million in 2004. Same store parts and service revenues increased $283,000 or 5.7 percent to $5.2 million for the third quarter of 2005 versus $5.0 million in 2004. Same store other revenues (net) decreased $106,000 or 5.6 percent to $1.8 million for the third quarter of 2005 versus $1.9 million for the same period in 2004.
On a same store basis, sales of new vehicles increased $3.6 million or 3.4 percent to $108.2 million for the first nine months of 2005 versus $104.6 million in 2004. Same store sales of used vehicles increased $1.8 million or 4.0 percent to $47.0 million for the first nine months of 2005 versus $45.2 million in 2004. Same store parts and service revenues increased $766,000 or 5.1 percent to $15.8 million for the first nine months of 2005 versus $15.0 million in 2003. Same store other revenues (net) increased $39,000 or 0.7 percent to slightly more than $5.5 million for the first nine months of 2005 versus slightly less than $5.5 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 Nine Months
Ended Sept. 30, Ended Sept. 30,
--------------------- ----------------------
2005 2004 2005 2004
---------- ---------- ----------- ----------
Revenues
New vehicle sales $38,543 $44,291 $117,213 $130,182
Used vehicle sales 15,723 16,943 48,204 49,633
Parts and service sales 5,246 5,984 17,311 18,098
Other, net 1,821 2,064 5,661 5,969
---------- ---------- ----------- ----------
Total revenues 61,333 69,282 188,389 203,882
Cost of sales
New vehicle 35,956 41,474 109,459 121,789
Used vehicle 14,280 15,359 43,651 44,921
Parts and service 2,372 2,697 7,885 8,269
---------- ---------- ----------- ----------
Total cost of sales 52,608 59,530 160,995 174,979
---------- ---------- ----------- ----------
Gross profit 8,725 9,752 27,394 28,903
Selling, general and
administrative expenses 7,749 8,307 23,457 25,448
---------- ---------- ----------- ----------
Income from
operations 976 1,445 3,937 3,455
Interest income 64 53 193 134
Interest (expense) (802) (775) (2,646) (2,406)
Other income - 63 591 66
Other (expense) - (5) - (9)
---------- ---------- ----------- ----------
Pre-tax income 238 781 2,075 1,240
Provision for income
taxes 95 211 830 335
---------- ---------- ----------- ----------
Net income $143 $570 $1,245 $905
========== ========== =========== ==========
Earnings per share, basic $0.02 $0.08 $0.19 $0.12
========== ========== =========== ==========
Earnings per share,
diluted $0.02 $0.08 $0.18 $0.12
========== ========== =========== ==========
Weighted average shares
outstanding, basic 6,451,128 7,389,389 6,660,012 7,252,529
Weighted average shares
outstanding, diluted 6,646,549 7,493,208 6,811,927 7,429,892
HOMETOWN AUTO RETAILERS INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
Sept. 30, Dec. 31,
ASSETS 2005 2004
(Unaudited) (Restated)
----------- ----------
Current Assets:
Cash and cash equivalents $5,806 $6,101
Accounts receivable, net 4,652 5,081
Inventories, net 27,925 43,440
Prepaid expenses and other current assets 788 634
Deferred and prepaid income taxes 1,464 1,464
----------- ----------
Total current assets 40,635 56,720
Property and equipment, net 13,074 13,854
Other assets 2,857 3,649
----------- ----------
Total assets $56,566 $74,223
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Floor plan notes payable - trade $5,382 $17,382
Floor plan notes payable - non-trade 20,961 25,092
Accounts payable and accrued expenses 4,366 5,106
Current maturities of long-term debt and
capital lease obligations 5,293 5,505
Deferred revenue 500 735
----------- ----------
Total current liabilities 36,502 53,820
Long-term debt and capital lease obligations 8,056 8,621
Long-term deferred income taxes 123 123
Other long-term liabilities and deferred revenue 703 726
----------- ----------
Total liabilities 45,384 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, 3,910,137
and 3,870,137 shares issued and outstanding,
respectively 4 4
Common stock, Class B, $.001 par value,
3,760,000 shares authorized, 2,579,252
and 3,519,252 shares issued and outstanding,
respectively 2 3
Additional paid-in capital 29,022 30,017
Accumulated deficit (17,846) (19,091)
----------- ----------
Total stockholders' equity 11,182 10,933
----------- ----------
Total liabilities and stockholders' equity $56,566 $74,223
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