PRESS RELEASE
Cross-Continent Auto Retailers Announces Manufacturer Approval to Acquire Two Toyota Dealerships
4 April 1997
Cross-Continent Auto Retailers Announces Manufacturer Approval to Acquire Two Toyota Dealerships
AMARILLO, Texas, April 3 -- Cross-Continent Auto Retailers,
Inc. today announced the company has received approval from Toyota
Motor Sales U.S.A. to complete the previously announced acquisition of Douglas
Toyota, Inc., in Thornton, Colo., a suburb of Denver, and Toyota West Sales
and Service Inc., in Las Vegas, Nev.
The announcement was made by Bill Gilliland, chairman and chief executive
officer of Cross-Continent and R. Douglas Spedding, president of Toyota West
and Douglas Toyota.
The aggregate purchase approximates $40 million, including cash,
promissory notes and Cross-Continent common stock. The transaction is
expected to close within the next week, and will be accounted for as a
purchase.
Gilliland said, "This acquisition reflects our strategy of acquiring high
quality, well-managed, profitable dealerships in desirable markets.
"Douglas Toyota's 1996 sales were $98.3 million and Toyota West's 1996
sales were $106.8 million. We believe that each of these dealerships is the
highest volume Toyota dealership in its respective market," Gilliland
continued. "The gross and pretax margins of the Toyota dealerships exceed our
consolidated company's margins of 15.5 percent and 3 percent, respectively,
and the acquisitions should be accretive to our earnings."
Spedding will continue his management duties following the completion of
the acquisition.
The purchase represents the company's second major acquisition following
its initial public offering on September 23, 1996. On October 1, 1996, the
company completed the acquisition of Lynn Hickey Dodge, in Oklahoma City,
which, according to industry publications, ranks as one of the largest Dodge
dealerships in the nation. On March 3, 1997, the company announced the
pending acquisition of Sahara Nissan, Inc. (Sierra Datsun, Inc.) which
operates a Nissan dealership in Las Vegas under the trade name Jack Biegger
Nissan.
Cross-Continent estimates that it will be ranked among the nation's top
15 franchised automobile dealership groups, based on retail volume, following
completion of the Douglas Toyota, Toyota West and Biegger Nissan acquisitions.
Including the completion of the Toyota dealership acquisitions and the
pending Biegger Nissan acquisition, Cross-Continent Auto Retailers, Inc. will
own and operate a group of 10 franchised automobile dealerships in Texas,
Oklahoma, Nevada and Colorado. 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.
Cross-Continent Auto Retailers, Inc. is listed on the New York Stock
Exchange under the symbol XC.
Cross-Continent Auto Retailers, Inc. believes its shareholders benefit
from the views of management about the future of the company's business.
Included herein are 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.
SOURCE Cross-Continent Auto Retailers, Inc.
CONTACT: John Gaines, Vice President-Finance, of Cross-Continent
Auto Retailers, Inc., 806-374-8653