PRESS RELEASE
Cross-Continent Announces 1996 Results
13 February 1997
Cross-Continent Auto Retailers, Inc. Reports Sharply Higher Revenues and Earnings For Fourth Quarter, Full Year
AMARILLO, Texas, Feb. 13 -- Cross-Continent Auto Retailers,
Inc. , the nation's first publicly traded franchise auto dealer
group, today announced revenues and earnings for the fourth quarter ended
December 31, 1996, increased 72.8 percent and 737.1 percent, respectively.
For the year ended December 31, 1996, total revenues increased 36.2 percent
and earnings rose 108.7 percent.
The company said total revenues for the three months ended December 31,
1996, increased 72.8 percent to $103.8 million from $60.0 million a year ago.
Earnings for the quarter increased 737.1 percent to $1,917,000, or $0.14 per
share, versus earnings of $229,000 for the comparable 1995 period.
Total revenues for the year ended December 31, 1996, increased 36.2
percent to $321.6 million from $236.2 million in the 1995 comparable period.
Reported earnings for the 1996 twelve month period rose sharply to $4,582,000
from $2,195,000 the year before.
Earnings per share for the year ended December 31, 1996 and December 31,
1995 and the three months ended December 31, 1995, are not presented since the
historical capital structure of the company is not comparable to the company's
current capital structure, as a result of the company's initial public
offering completed September 23, 1996.
Excluding an adjustment for non-recurring employee stock compensation and
bonuses paid prior to the company's initial public offering on September 23,
1996, earnings for the year ended December 31, 1996, would have been
$6,059,000.
Fourth Quarter Results
Chairman and Chief Executive Officer Bill Gilliland said, "The results of
the fourth quarter were bolstered by the addition of the Lynn Hickey Dodge
dealership in Oklahoma City, which was acquired in October 1996, and an
overall general increase in demand for new and used vehicles." Gilliland
pointed out that excluding the contribution from Lynn Hickey Dodge, and the
full quarter effect of Performance Dodge, acquired in December 1995, sales
jumped $11.8 million, or 20 percent.
Gilliland said new vehicle unit sales during the quarter increased 28.8
percent to 1,764 units from 1,370 in the 1995 fourth quarter. "Retail used
vehicle sales more than doubled in units to 3,115 units from 1,443 a year
earlier," he said. "Our strategy to mirror the market resulted in the higher
used-vehicle sales."
Year End Results
Gilliland noted that sales of new vehicles for the year rose 20.3 percent
from $114.5 in 1995 to $137.7 million. Retail used vehicle sales increased by
1,975 units from last year. Excluding Lynn Hickey Dodge and January through
November sales of Performance Dodge, total 1996 revenues increased $21.1
million, or 8.9 percent from last year.
The gross margin of 15.5 percent was slightly lower than the 15.9 percent
achieved in 1995. "The drought and General Motors strike diminished our
margins during the second quarter, but we rebounded during the latter half of
the year. Our gross margin continues to exceed the industry standard,"
Gilliland said.
Growth Strategy
"We continue to see tremendous consolidation opportunities in the
industry," Gilliland stated. "And we see many opportunities to acquire
additional franchised dealerships in the near future." On October 1, 1996,
Cross-Continent completed the purchase of Lynn Hickey Dodge, which ranks as
one of the nation's largest Dodge dealerships according to industry
publications. "In January, we announced the pending acquisition of Douglas
Toyota, Inc., in the Denver area, and Toyota West Sales and Service, Inc., in
Las Vegas," noted Gilliland. The transaction is expected to close on March 1,
1997, and is subject to manufacturer approval and other conditions.
Cross-Continent estimates that it will be ranked among the nation's top 15
franchise automobile dealerships based on volume, after completing the Douglas
Toyota and Toyota West Sales & Service acquisitions.
"Pending the March closing of our Denver and Las Vegas acquisitions, our
company will be ranked in the top 15 franchise automobile dealership groups,
based on retail volume. Prior to the company's initial public offering on
September 23, 1996, we were ranked 71st," stated Gilliland. "We continue to
focus on acquiring well-located, highly profitable operations with great
management in place."
Including the pending acquisitions in Denver and Las Vegas, Cross-
Continent Auto Retailers, Inc. will own and operate a group of nine franchised
dealerships in Texas, Oklahoma, Colorado and Nevada. Through these
dealerships, the company sells new and used cars and light trucks,
arranges related financing and insurance, sells replacement parts and
provides vehicle maintenance and repair services.
This release contains forward-looking statements, including statements
with respect to anticipated revenue growth, acquisitions and profitability.
These statements involve risks and uncertainties that could cause actual
results to differ materially, including without limitation economic
conditions, risks associated with acquisitions and the risk factors set forth
from time to time in the company's filings with the Securities and Exchange
Commission.
Cross-Continent Auto Retailers, Inc. is listed on the New York Stock
Exchange under the symbol XC.
For further information regarding Cross-Continent free of charge via fax
dial 1-800-PRO-INFO and enter company code XC.
Cross-Continent Auto Retailers, Inc.
Statements of Operations
(Unaudited)
(Dollars in thousands except for unit sales and per share amounts)
Three Months Year
Ended December 31 Ended December 31
1996 1995 1996 1995
Vehicle sales $91,089 $53,983 $283,977 $212,984
Other operating revenue 12,670 6,049 37,606 23,210
Total Revenue 103,759 60,032 321,583 236,194
Cost of sales 87,201 50,857 271,650 198,702
Gross Profit 16,558 9,175 49,933 37,492
SGA 12,480 6,987 36,490 25,630
Depreciation & amortization 386 240 1,207 951
Management fees 0 770 0 4,318
Employee stock compensation 0 0 1,099 0
Operating Income 3,692 1,178 11,137 6,593
Interest expense (net) 598 813 3,193 3,088
Income before income taxes 3,094 365 7,944 3,505
Income taxes 1,177 136 3,362 1,310
Net Income $1,917 $229 $4,582 $2,195
EPS
Shares outstanding 13,800 N/A N/A N/A
EPS $0.14 N/A N/A N/A
Unit Sales
New 1,764 1,370 6,408 5,547
Used - Retail 3,115 1,443 8,145 6,170
Wholesale 2,192 1,325 7,423 5,372
SOURCE Cross-Continent Auto Retailers, Inc.
CONTACT: John Gaines, Vice President-Finance of Cross-Continent Auto Retailers,
Inc., 806-374-8653, jbgaines@c-car.com;
or Bill Schmidle or Jack Queeney of The Financial Relations Board, 312-266-7800