UnitedAuto Reports First Quarter Results; Income From Continuing Operations Increases 10% to $26.2 Million Driven by Premium Brand Mix and Service and Parts Operations
BLOOMFIELD HILLS, Mich.--April 18, 2006--United Auto Group, Inc. : Income From Continuing Operations Rises 10% to $0.56 per Share Total Revenues Increase 12% Same-Store Retail Revenues Increase 4%United Auto Group, Inc. , an international automotive retailer, today reported first quarter income from continuing operations of $26.2 million and related earnings per share of $0.56, representing increases of 10.2% and 9.8%, respectively, over the comparable period in 2005. First quarter 2006 net income amounted to $24.1 million and related earnings per share was $0.51.
UAG Chairman Roger Penske said, "While the first quarter was challenging from a retail sales perspective, our performance highlights the strength of our premium brand mix and the increasing benefit of our investment in service and parts capacity. During the quarter, revenues increased 11.6% to $2.7 billion, including a 4.2% increase in same-store retail revenues. The increase in same-store revenue was highlighted by a 15.8% increase in total vehicle revenues at the Company's premium brand dealerships in the United States and an 8.2% increase in service and parts revenues."
Gross margin increased 29 basis points to 15.6%. The improvement in gross margin was due primarily to an increase in service and parts revenues to 11.6% of total revenues, coupled with an 85 basis-point increase in margin on service and parts revenues.
The Company anticipates a challenging and competitive automotive retail market for the balance of 2006, due in part to the impact on consumers of continuing increases in interest rates and rising energy costs. The Company currently projects earnings from continuing operations in the second quarter in the range of $0.75 to $0.78 per share, and continues to project earnings from continuing operations for the year in the range of $2.70 to $2.80 per share. Earnings per share projections are based on an average of 47.0 million estimated shares outstanding.
UnitedAuto will host a conference call discussing financial results relating to first quarter 2006 on Tuesday, April 18, 2006 at 2:00 p.m. ET. To listen to the conference call, participants must dial (888) 423-3275 (International, please dial (612) 332-0720). The call will be simultaneously broadcast live over the Internet through the UnitedAuto website at www.unitedauto.com.
About UnitedAuto
United Auto Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 294 retail automotive franchises, representing 40 different brands, and 27 collision repair centers. UnitedAuto, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 171 franchises in 19 states and Puerto Rico and 123 franchises located outside the United States, primarily in the United Kingdom. UnitedAuto is a member of the Fortune 500 and Russell 2000 and has approximately 14,000 employees.
Statements in this press release involve forward-looking statements, including forward-looking statements regarding UnitedAuto's future sales 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, market conditions, and other uncertainties which could affect UnitedAuto's future performance, which is contained in UnitedAuto's Form 10-K for the year ended December 31, 2005, and its other filings with the Securities and Exchange Commission, and which is 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)
First Quarter
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2006 2005
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Revenues:
New Vehicle $1,494,644 $1,357,464
Used Vehicle 587,897 526,584
Finance and Insurance, Net 59,822 54,148
Service and Parts 308,937 265,866
Fleet and Wholesale Vehicle 221,644 191,677
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Total Revenues 2,672,944 2,395,739
Cost of Sales:
New Vehicle 1,363,861 1,238,036
Used Vehicle 534,718 478,525
Service and Parts 139,100 121,969
Fleet and Wholesale Vehicle 219,188 191,123
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Total Cost of Sales 2,256,867 2,029,653
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Gross Profit 416,077 366,086
SG&A Expenses 336,631 294,811
Depreciation and Amortization 10,632 9,579
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Operating Income 68,814 61,696
Floor Plan Interest Expense (14,965) (12,352)
Other Interest Expense (12,072) (11,481)
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Income from Continuing Operations
Before Minority
Interests and Income Taxes 41,777 37,863
Income Taxes (15,192) (13,972)
Minority Interests (422) (143)
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Income from Continuing Operations 26,163 23,748
Loss from Discontinued Operations, Net of Tax (2,072) (856)
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Net Income $24,091 $22,892
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Income from Continuing Operations Per Diluted
Share $0.56 $0.51
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Diluted EPS $0.51 $0.49
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Diluted Weighted Average Shares Outstanding 47,136 46,875
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UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)
3/31/06 12/31/05
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Assets
Cash and Cash Equivalents $16,132 $9,424
Accounts Receivable, Net 397,803 412,861
Inventories 1,370,251 1,224,443
Other Current Assets 72,039 51,142
Assets of Discontinued Operations 162,555 180,692
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Total Current Assets 2,018,780 1,878,562
Property and Equipment, Net 442,618 424,429
Intangibles 1,320,987 1,207,554
Other Assets 100,652 83,628
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Total Assets $3,883,037 $3,594,173
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Liabilities and Stockholders' Equity
Floor Plan Notes Payable $883,622 $845,251
Floor Plan Notes Payable - Non-Trade 352,464 331,953
Accounts Payable and Accrued Expenses 497,002 386,739
Current Portion Long-Term Debt 3,740 3,551
Liabilities of Discontinued Operations 87,391 97,256
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Total Current Liabilities 1,824,219 1,664,750
Long-Term Debt 684,734 576,690
Other Long-Term Liabilities 210,719 207,001
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Total Liabilities 2,719,672 2,448,441
Stockholders' Equity 1,163,365 1,145,732
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Total Liabilities and Stockholders'
Equity $3,883,037 $3,594,173
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UNITED AUTO GROUP, INC.
Selected Data
First Quarter
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2006 2005
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Units
New Retail Units 44,378 41,169
Used Retail Units 21,421 20,257
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Total Retail Units 65,799 61,426
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Same-Store Retail Revenue
New Vehicle $1,380,704 $1,343,266
Used Vehicle 547,416 518,572
Finance and Insurance, Net 56,242 53,569
Service and Parts 284,810 263,265
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Total Same-Store Retail Revenue $2,269,172 $2,178,672
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Same-Store Retail Revenue Growth
New Vehicle 2.8% 0.5%
Used Vehicle 5.6% 0.7%
Finance and Insurance, Net 5.0% 6.0%
Service and Parts 8.2% 7.1%
Revenue Mix
New Vehicle 55.9% 56.6%
Used Vehicle 22.0% 22.0%
Finance and Insurance, Net 2.2% 2.3%
Service and Parts 11.6% 11.1%
Fleet and Wholesale Vehicle 8.3% 8.0%
Gross Margin 15.6% 15.3%
Retail Gross Margin - by Product
New Vehicle 8.7% 8.8%
Used Vehicle 9.0% 9.1%
Service and Parts 55.0% 54.1%
Gross Profit per Transaction
New Vehicle $2,947 $2,901
Used Vehicle 2,482 2,373
Finance and Insurance 909 882
Brand Mix:
Toyota/Lexus 21% 22%
BMW 15% 15%
Honda/Acura 15% 14%
DCX 12% 12%
Ford 11% 10%
Audi 7% 7%
General Motors 5% 6%
Porsche 4% 4%
Nissan/Infiniti 3% 4%
Other 7% 6%
Total Brand Mix:
Domestic (Detroit 3) 8% 10%
Foreign (incl. Premium) 92% 90%
Premium 60% 58%
Debt to Total Capital Ratio 37% 34%
Rent Expense $33,115 $27,313