UnitedAuto Reports Record Third Quarter Results
BLOOMFIELD HILLS, Mich.--United Auto Group, Inc. , an international automotive retailer, today reported third quarter income from continuing operations of $36.4 million and related earnings per share of $0.39, representing increases of 7.8% and 8.3%, respectively, over the comparable period in 2005. Third quarter 2006 net income amounted to $33.9 million and related earnings per share was $0.36.
The Company’s revenue increased 15.2% to a record $3.1 billion during the third quarter. The revenue increase was driven by acquisitions and strong same-store growth from the Company’s used vehicle and service and parts operations. Commenting on the Company’s performance, Chairman Roger Penske said, “The third quarter showcases the strength of UAG’s business model. Although new vehicle sales were challenging, used vehicle and service and parts sales were strong. Aggregate used vehicle revenues grew 28%, including same-store revenue increases of 6.8% in the U.S. and 12.2% in the United Kingdom. Additionally, our service and parts operations continue to expand, increasing from 10.4% to 10.7% of total revenue, due in part to a 5.7% same-store increase.”
For the nine months ended September 30, 2006, revenues increased 13.0% to $8.7 billion. Income from continuing operations for the nine months increased 10.7% to $98.6 million and related earnings per share increased 10.5% to $1.05 per share. Net income for the nine months increased 6.7% to $94.8 million, or $1.01 per share, from $88.9 million, or $0.95 per share, in the prior year.
The Company currently projects earnings from continuing operations in the fourth quarter in the range of $0.30 to $0.35 per share, which would result in 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 94.1 million estimated shares outstanding.
UnitedAuto will host a conference call discussing financial results relating to third quarter 2006 on Tuesday, October 24, 2006 at 2:00 p.m. EDT. To listen to the conference call, participants must dial (888) 781-3339 [International, please dial (703) 546-4240]. 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 319 retail automotive franchises, representing 42 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 170 franchises in 20 states and Puerto Rico and 149 franchises located outside the United States, primarily in the United Kingdom. UnitedAuto is a member of the Fortune 500 and Russell 1000 and has over 15,000 employees.
Statements in this press release involve forward-looking statements, including forward-looking statements regarding UnitedAuto's future sales and earnings potential. Actual results may vary materially because of risks and uncertainties, including external factors such as interest rate fluctuations, changes in consumer spending, energy costs 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) |
|||
| Third Quarter | |||
| 2006 | 2005 | ||
| Revenues: | |||
| New Vehicle | $1,732,275 | $1,577,928 | |
| Used Vehicle | 704,254 | 550,665 | |
| Finance and Insurance, Net | 68,799 | 62,939 | |
| Service and Parts | 329,322 | 277,040 | |
| Fleet and Wholesale Vehicle | 245,954 | 206,717 | |
| Total Revenues | 3,080,604 | 2,675,289 | |
| Cost of Sales: | |||
| New Vehicle | 1,584,517 | 1,443,278 | |
| Used Vehicle | 645,135 | 500,925 | |
| Service and Parts | 147,231 | 127,017 | |
| Fleet and Wholesale Vehicle | 245,301 | 207,176 | |
| Total Cost of Sales | 2,622,184 | 2,278,396 | |
| Gross Profit | 458,420 | 396,893 | |
| SG&A Expenses | 361,297 | 309,265 | |
| Depreciation and Amortization | 11,722 | 9,772 | |
| Operating Income | 85,401 | 77,856 | |
| Floor Plan Interest Expense | (16,716) | (11,865) | |
| Other Interest Expense | (11,111) | (12,222) | |
|
Income from Continuing Operations Before Income Taxes and Minority Interests |
57,574 |
53,769 |
|
| Income Taxes | (20,727) | (19,552) | |
| Minority Interests | (478) | (486) | |
| Income from Continuing Operations | 36,369 | 33,731 | |
| Loss from Discontinued Operations, Net of Tax | (2,496) | (967) | |
| Net Income | $33,873 | $32,764 | |
| Income from Continuing Operations Per Diluted Share | $0.39 | $0.36 | |
| Diluted EPS | $0.36 | $0.35 | |
| Diluted Weighted Average Shares Outstanding | 94,288 | 94,248 | |
|
UNITED AUTO GROUP, INC. Consolidated Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited) |
|||
| Nine Months | |||
| 2006 | 2005 | ||
| Revenues: | |||
| New Vehicle | $4,851,791 | $4,445,052 | |
| Used Vehicle | 1,935,739 | 1,626,516 | |
| Finance and Insurance, Net | 195,636 | 175,464 | |
| Service and Parts | 951,884 | 809,278 | |
| Fleet and Wholesale Vehicle | 726,439 | 606,525 | |
| Total Revenues | 8,661,489 | 7,662,835 | |
| Cost of Sales: | |||
| New Vehicle | 4,431,374 | 4,059,563 | |
| Used Vehicle | 1,766,982 | 1,478,151 | |
| Service and Parts | 427,464 | 369,563 | |
| Fleet and Wholesale Vehicle | 721,906 | 605,617 | |
| Total Cost of Sales | 7,347,726 | 6,512,894 | |
| Gross Profit | 1,313,763 | 1,149,941 | |
| SG&A Expenses | 1,039,317 | 905,171 | |
| Depreciation and Amortization | 33,373 | 28,791 | |
| Operating Income | 241,073 | 215,979 | |
| Floor Plan Interest Expense | (49,097) | (37,483) | |
| Other Interest Expense | (34,559) | (35,735) | |
|
Income from Continuing Operations Before Income Taxes and Minority Interests |
157,417 |
142,761 |
|
| Income Taxes | (57,254) | (52,390) | |
| Minority Interests | (1,536) | (1,250) | |
| Income from Continuing Operations | 98,627 | 89,121 | |
| Loss from Discontinued Operations, Net of Tax | (3,825) | (269) | |
| Net Income | $94,802 | $88,852 | |
| Income from Continuing Operations Per Diluted Share | $1.05 | $0.95 | |
| Diluted EPS | $1.01 | $0.95 | |
| Diluted Weighted Average Shares Outstanding | 94,085 | 94,010 | |
|
UNITED AUTO GROUP, INC. Consolidated Condensed Balance Sheets (Amounts In Thousands) (Unaudited) |
||
| 9/30/06 | 12/31/05 | |
| Assets | ||
| Cash and Cash Equivalents | $19,065 | $8,957 |
| Accounts Receivable, Net | 464,287 | 413,431 |
| Inventories, Net | 1,455,910 | 1,219,735 |
| Other Current Assets | 91,197 | 50,865 |
| Assets Held for Sale | 137,442 | 189,373 |
| Total Current Assets | 2,167,901 | 1,882,361 |
| Property and Equipment, Net | 562,011 | 423,513 |
| Intangibles | 1,492,606 | 1,204,675 |
| Other Assets | 116,410 | 83,624 |
| Total Assets | $4,338,928 | $3,594,173 |
| Liabilities and Stockholders’ Equity | ||
| Floor Plan Notes Payable | $896,113 | $841,911 |
| Floor Plan Notes Payable – Non-Trade | 360,548 | 331,009 |
| Accounts Payable and Accrued Expenses | 654,007 | 381,583 |
| Current Portion Long-Term Debt | 3,743 | 3,551 |
| Liabilities Held for Sale | 68,624 | 106,710 |
| Total Current Liabilities | 1,983,035 | 1,664,764 |
| Long-Term Debt | 862,535 | 576,690 |
| Other Long-Term Liabilities | 234,646 | 206,987 |
| Total Liabilities | 3,080,216 | 2,448,441 |
| Stockholders’ Equity | 1,258,712 | 1,145,732 |
| Total Liabilities and Stockholders’ Equity | $4,338,928 | $3,594,173 |
|
UNITED AUTO GROUP, INC. Selected Data |
||||
|
|
Third Quarter |
Nine Months | ||
| 2006 | 2005 | 2006 | 2005 | |
| Total Retail Units | ||||
| New Retail | 52,234 | 49,076 | 145,697 | 136,415 |
| Used Retail | 25,255 | 21,522 | 70,007 | 62,638 |
| Total Retail | 77,489 | 70,598 | 215,704 | 199,053 |
| Same-Store Retail Units | ||||
| New Same-Store Retail | 47,054 | 48,777 | 131,165 | 133,414 |
| Used Same-Store Retail | 21,832 | 21,332 | 61,856 | 60,916 |
| Total Same-Store Retail | 68,886 | 70,109 | 193,021 | 194,330 |
| Same-Store Retail Revenue | ||||
| New Vehicles | $1,545,196 | $1,571,184 | $4,375,476 | $4,374,997 |
| Used Vehicles | 594,755 | 546,241 | 1,704,113 | 1,594,043 |
| Finance and Insurance, Net | 62,619 | 62,477 | 179,411 | 172,133 |
| Service and Parts | 291,904 | 276,044 | 854,817 | 798,702 |
| Total Same-Store Retail | $2,494,474 | $2,455,946 | $7,113,817 | $6,939,875 |
| Same-Store Retail Revenue Growth | ||||
| New Vehicles | (1.7%) | 8.2% | - | 5.4% |
| Used Vehicles | 8.9% | 6.3% | 6.9% | 3.5% |
| Finance and Insurance, Net | 0.2% | 17.0% | 4.2% | 13.1% |
| Service and Parts | 5.7% | 8.7% | 7.0% | 8.1% |
| Revenue Mix | ||||
| New Vehicles | 56.2% | 59.0% | 56.0% | 58.0% |
| Used Vehicles | 22.9% | 20.6% | 22.4% | 21.2% |
| Finance and Insurance, Net | 2.2% | 2.4% | 2.3% | 2.3% |
| Service and Parts | 10.7% | 10.4% | 11.0% | 10.6% |
| Fleet and Wholesale | 8.0% | 7.6% | 8.3% | 7.9% |
| Average Retail Selling Price | ||||
| New Vehicles | $33,164 | $32,153 | $33,301 | $32,585 |
| Used Vehicles | $27,886 | $25,586 | $27,651 | $25,967 |
|
Gross Margin |
14.9% |
14.8% |
15.2% |
15.0% |
| Retail Gross Margin - by Product | ||||
| New Vehicle | 8.5% | 8.5% | 8.7% | 8.7% |
| Used Vehicle | 8.4% | 9.0% | 8.7% | 9.1% |
| Service and Parts | 55.3% | 54.2% | 55.1% | 54.3% |
| Gross Profit per Retail Transaction | ||||
| New Vehicles | $2,829 | $2,744 | $2,885 | $2,826 |
| Used Vehicles | 2,341 | 2,311 | 2,411 | 2,369 |
| Finance and Insurance | 888 | 892 | 907 | 882 |
| Third Quarter | Nine Months | |||
| 2006 | 2005 | 2006 | 2005 | |
| Brand Mix: | ||||
| Toyota/Lexus | 21% | 22% | 21% | 22% |
| BMW | 18% | 15% | 16% | 15% |
| Honda/Acura | 15% | 15% | 16% | 15% |
| DCX | 11% | 12% | 11% | 12% |
| Ford | 11% | 10% | 11% | 10% |
| Audi | 7% | 7% | 7% | 7% |
| General Motors | 5% | 6% | 5% | 6% |
| Porsche | 3% | 4% | 4% | 4% |
| Nissan/Infiniti | 3% | 4% | 3% | 4% |
| Other | 6% | 5% | 6% | 5% |
| Debt to Total Capital Ratio | 41% | 34% | 41% | 34% |
| Rent Expense | $35,609 | $28,184 | $102,844 | $83,839 |