UnitedAuto Reports Record Second Quarter Results
BLOOMFIELD HILLS, Mich.--July 25, 2006--| Earnings Per Share From Continuing Operations Rise 15% to $0.39 Service and Parts Revenues Increase 17% |
United Auto Group, Inc. , an international automotive retailer, today reported second quarter income from continuing operations of $36.6 million and related earnings per share of $0.39, representing increases of 15.2% and 14.7%, respectively, over the comparable period in 2005. Second quarter 2006 net income amounted to $36.8 million and related earnings per share was $0.39.
The Company's revenue increased 11.8% to a record $2.9 billion during the second quarter. The revenue increase was driven by 2.9% same-store retail revenue growth, including same-store used vehicle revenue growth of 9.3% from the Company's foreign nameplates. On an aggregate basis, same-store used vehicle revenues increased 8.5%.
UAG Chairman Roger Penske said, "UnitedAuto's performance during the second quarter continues to highlight the strength of our brand portfolio and the continuing success of our investment strategy. Our overall service and parts revenue increased 17.3%, including 7.6% growth on a same-store basis, which contributed to a 20 basis-point increase in total gross margin to 15.2%."
The improvement in the Company's gross margin was due primarily to a 50 basis-point increase in service and parts from 10.4% to 10.9% of total revenues, coupled with a 36 basis-point increase in margin on service and parts revenues.
For the six months ended June 30, 2006, revenues increased 11.7 % to $5.6 billion. Income from continuing operations for the six months increased 12.7% to $62.6 million and related earnings per share increased 11.9% to $0.66 per share. Net income for the six months increased 8.6% to $60.9, or $0.64 per share, from $56.1 million, or $0.60 per share, in the prior year. Second quarter 2005 results include $1.2 million ($0.01 per share) of after tax charges relating to severance costs associated with cost saving initiatives in certain markets.
The Company currently projects earnings from continuing operations in the third quarter in the range of $0.37 to $0.40 per share, and continues to project earnings from continuing operations for the year in the range of $1.35 to $1.40 per share. Earnings per share projections are based on an average of 94.6 million estimated shares outstanding.
About UnitedAuto
United Auto Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 296 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 173 franchises in 20 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 1000 and has approximately 15,100 employees.
UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Second Quarter
-----------------------
2006 2005
----------- -----------
Revenues:
New Vehicle $1,640,472 $1,528,878
Used Vehicle 657,747 556,134
Finance and Insurance, Net 67,451 58,716
Service and Parts 319,827 272,641
Fleet and Wholesale Vehicle 246,250 205,254
----------- -----------
Total Revenues 2,931,747 2,621,623
Cost of Sales:
New Vehicle 1,497,328 1,395,825
Used Vehicle 600,662 505,438
Service and Parts 143,820 123,596
Fleet and Wholesale Vehicle 245,800 204,838
----------- -----------
Total Cost of Sales 2,487,610 2,229,697
----------- -----------
Gross Profit 444,137 391,926
SG&A Expenses 345,385 305,546
Depreciation and Amortization 11,204 9,685
----------- -----------
Operating Income 87,548 76,695
Floor Plan Interest Expense (17,232) (13,142)
Other Interest Expense (11,495) (12,251)
----------- -----------
Income from Continuing Operations
Before Minority
Interests and Income Taxes 58,821 51,302
Income Taxes (21,597) (18,925)
Minority Interests (636) (621)
----------- -----------
Income from Continuing Operations 36,588 31,756
Income from Discontinued Operations, Net of
Tax 255 1,440
----------- -----------
Net Income $36,843 $33,196
=========== ===========
Income from Continuing Operations Per Diluted
Share $0.39 $0.34
=========== ===========
Diluted EPS $0.39 $0.35
=========== ===========
Diluted Weighted Average Shares Outstanding 94,636 94,082
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UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Six Months
-----------------------
2006 2005
----------- -----------
Revenues:
New Vehicle $3,126,314 $2,881,209
Used Vehicle 1,237,747 1,075,082
Finance and Insurance, Net 126,952 112,563
Service and Parts 627,048 536,674
Fleet and Wholesale Vehicle 465,871 394,895
----------- -----------
Total Revenues 5,583,932 5,000,423
Cost of Sales:
New Vehicle 2,853,123 2,629,237
Used Vehicle 1,127,973 976,809
Service and Parts 282,226 244,759
Fleet and Wholesale Vehicle 462,951 393,929
----------- -----------
Total Cost of Sales 4,726,273 4,244,734
----------- -----------
Gross Profit 857,659 755,689
SG&A Expenses 679,895 598,191
Depreciation and Amortization 21,782 19,206
----------- -----------
Operating Income 155,982 138,292
Floor Plan Interest Expense (32,123) (25,427)
Other Interest Expense (23,521) (23,671)
----------- -----------
Income from Continuing Operations
Before Minority
Interests and Income Taxes 100,338 89,194
Income Taxes (36,710) (32,905)
Minority Interests (1,058) (764)
----------- -----------
Income from Continuing Operations 62,570 55,525
Income (Loss) from Discontinued Operations,
Net of Tax (1,636) 563
----------- -----------
Net Income $60,934 $56,088
=========== ===========
Income from Continuing Operations Per Diluted
Share $0.66 $0.59
=========== ===========
Diluted EPS $0.64 $0.60
=========== ===========
Diluted Weighted Average Shares Outstanding 94,499 94,050
=========== ===========
UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)
6/30/06 12/31/05
----------- -----------
Assets
Cash and Cash Equivalents $25,623 $9,424
Accounts Receivable, Net 405,392 411,970
Inventories, Net 1,418,891 1,213,568
Other Current Assets 76,761 50,868
Assets Held for Sale 170,984 193,937
----------- -----------
Total Current Assets 2,097,651 1,879,767
Property and Equipment, Net 505,592 423,224
Intangibles 1,358,641 1,207,554
Other Assets 101,982 83,628
----------- -----------
Total Assets $4,063,866 $3,594,173
=========== ===========
Liabilities and Stockholders' Equity
Floor Plan Notes Payable $991,692 $837,045
Floor Plan Notes Payable - Non-Trade 319,189 330,240
Accounts Payable and Accrued Expenses 482,461 381,118
Current Portion Long-Term Debt 3,741 3,551
Liabilities Held for Sale 107,702 112,796
----------- -----------
Total Current Liabilities 1,904,785 1,664,750
Long-Term Debt 716,018 576,690
Other Long-Term Liabilities 216,792 207,001
----------- -----------
Total Liabilities 2,837,595 2,448,441
Stockholders' Equity 1,226,271 1,145,732
----------- -----------
Total Liabilities and Stockholders'
Equity $4,063,866 $3,594,173
=========== ===========
UNITED AUTO GROUP, INC.
Selected Data
Second Quarter Six Months
----------------------- -----------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Units
New Retail Units 49,472 46,589 93,602 87,605
Used Retail Units 23,577 20,872 44,704 40,851
----------- ----------- ----------- -----------
Total Retail
Units 73,049 67,461 138,306 128,456
=========== =========== =========== ===========
Same-Store Retail
Revenue
New Vehicles $1,518,823 $1,520,879 $2,866,926 $2,840,158
Used Vehicles 597,032 550,507 1,128,366 1,052,351
Finance and
Insurance, Net 62,858 58,161 117,880 110,389
Service and Parts 292,316 271,544 571,539 529,872
----------- ----------- ----------- -----------
Total Same-
Store Retail
Revenue $2,471,029 $2,401,091 4,684,711 $4,532,770
=========== =========== =========== ===========
Same-Store Retail
Revenue Growth
New Vehicles (0.1%) 8.8% 0.9% 4.7%
Used Vehicles 8.5% 5.0% 7.2% 2.9%
Finance and
Insurance, Net 8.1% 16.5% 6.8% 11.2%
Service and Parts 7.6% 9.0% 7.9% 8.0%
Revenue Mix
New Vehicles 56.0% 58.3% 56.0% 57.6%
Used Vehicles 22.4% 21.2% 22.2% 21.5%
Finance and
Insurance, Net 2.3% 2.2% 2.3% 2.3%
Service and Parts 10.9% 10.4% 11.2% 10.7%
Fleet and
Wholesale 8.4% 7.9% 8.3% 7.9%
Gross Margin 15.2% 15.0% 15.4% 15.1%
Retail Gross Margin -
by Product
New Vehicle 8.7% 8.7% 8.7% 8.7%
Used Vehicle 8.7% 9.1% 8.9% 9.2%
Service and Parts 55.0% 54.7% 55.0% 54.4%
Gross Profit per
Transaction
New Vehicles $2,893 $2,856 $2,919 $2,876
Used Vehicles 2,421 2,429 2,456 2,406
Finance and
Insurance 923 870 918 876
Brand Mix:
Toyota/Lexus 21% 22% 21% 22%
BMW 16% 15% 16% 15%
Honda/Acura 16% 15% 16% 15%
DCX 11% 12% 11% 12%
Ford 10% 9% 11% 9%
Audi 7% 7% 7% 7%
General Motors 5% 7% 5% 6%
Porsche 4% 4% 4% 4%
Nissan/Infiniti 3% 4% 3% 4%
Other 7% 5% 6% 6%
Total Brand Mix:
Domestic (Detroit 3) 8% 10% 8% 10%
Foreign (incl.
Premium) 92% 90% 92% 90%
Premium 59% 58% 60% 58%
Debt to Total Capital
Ratio 37% 34% 37% 34%
Rent Expense $34,423 $28,688 $67,399 $55,827