PRESS RELEASE
Cross-Continent Auto Retailers Completes Acquisition of Two Toyota Dealerships
14 April 1997
Cross-Continent Auto Retailers Completes Acquisition of Two Toyota Dealerships
AMARILLO, Texas, April 11 -- Cross-Continent Auto Retailers,
Inc. completed its 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 CrossContinent, and
R. Douglas Spedding, president of Toyota West and Douglas Toyota.
The aggregate purchase approximated $40 million, including $28 million in
cash, $7 million in promissory notes and $5 million in CrossContinent common
stock. The acquisition will be accounted for as a purchase.
"We received approval from Toyota Motor Sales U.S.A. to complete the
acquisitions last week," Gilliland said. "The acquisitions reflect our
strategy of acquiring high-quality, well-managed, profitable dealerships in
our targeted markets.
"Douglas Toyota sales for 1996 were $98.3 million and Toyota West sales
for 1996 were $106.8 million. We believe that each of these dealerships is
the highest volume Toyota dealership in its respective market," Gilliland
noted. "The Toyota dealerships' combined gross margin of 17.5 percent
and pretax margin of 3.6 percent exceed the industry average and exceed our
consolidated company's margins of 15.5 percent gross and 3 percent pretax.
The acquisition should be accretive to our earnings."
This 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 recent industry publications, ranks as one of largest
Dodge dealerships in the nation. On March 3, 1997, the company also 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
the completion of the acquisition of Biegger Nissan.
Including 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