United Auto Group Reports Q1 1997 Results
7 May 1997
United Auto Group Reports First Quarter 1997 Results
Company Reports Net Income of $3.3 Million or $0.19 Per Share
On Revenues of $388.2 Million
NEW YORK, May 7 -- United Auto Group, Inc. , the
nation's second largest publicly-traded automotive retailer, today announced a
6.5% increase in revenues for the first quarter of 1997 versus pro forma
revenues for the comparable 1996 period.
Revenues Increase 48.3% On An Actual Basis
These results represent a 48.3% increase in revenues on an actual basis
and reflect the addition of 15 dealership franchises over the past year. For
the quarter ended March 31, 1997, revenues were $388.2 million as compared to
pro forma revenues of $364.4 million and actual revenues of $261.7 million in
the comparable prior year period. Gross profit margin for the quarter
improved to 12.3% from 12.1% on a pro forma basis in the comparable prior year
period. On an actual basis, gross profit margin was 11.2% for the first
quarter of 1996.
Earnings Per Share Increase From $0.02 to $0.19 On An Actual Basis
First quarter net income was $3.3 million as compared to $3.7 million pro
forma net income in 1996, or $171,000 on an actual basis. Earnings per share
were $0.19 versus $0.21 per share pro forma for the comparable prior year
period, or $0.02 per share on an actual basis.
Of the $388.2 million in revenues, vehicle sales represented approximately
88%, or $340.8 million; finance and insurance revenues represented
approximately 3%, or $13.5 million; and service and parts revenues of $33.9
million represented the remaining 9%.
Marshall S. Cogan, the Company's founder, Chairman and Chief Executive
Officer said, "The results for the quarter demonstrate our ability to grow
revenues and earnings. With the new car franchise as the cornerstone of our
business, our approach links vehicle sales to effective finance and service
programs, both of which continued to experience solid growth in the first
quarter." He noted that United Auto achieved a 14.3% increase in finance and
insurance revenue and a 13.5% increase in service and parts revenue for the
quarter, on a pro forma basis.
The Company said that it sold 9,751 new and 5,949 used vehicles during the
first quarter versus 9,530 new and 5,964 used vehicles for the comparable 1996
period on a pro forma basis.
Selling, general and administrative expenses were $41.8 million, or 10.8%
of total revenue, versus $37.1 million or 10.2% of total revenues in the first
quarter of 1996 on a pro forma basis.
Mr. Cogan commented: "We're extremely pleased with our efforts to add in
excess of $900 million in revenues from recent and anticipated acquisitions,
resulting in a projected annual run rate of $2.7 billion. This success led us
to a strategic decision to build our infrastructure to reflect the needs of an
enterprise of this scale, and, as a result, fixed SG&A expenditures are
disproportionately high for the first quarter. In subsequent quarters, we
expect to see less impact of these expenditures as we report the increased
revenues resulting from acquisitions."
Mr. Cogan expressed confidence in the Company's ability to integrate these
and future acquisitions into its dealership network.
United Auto completed the acquisitions of Las Vegas-based Gary Hanna
Nissan Inc., the largest Nissan dealership in Nevada, and nine Florida and
Long Island dealerships owned by the Staluppi family on April 22, 1997 and
April 30, 1997, respectively.
The Company expects to complete the previously announced acquisitions of
three Ford dealerships in the Chattanooga and Atlanta markets and three
General Motors Corporation dealerships in the Carolinas during May.
United Auto operates 50 franchises in Arizona, Arkansas, Connecticut,
Florida, Georgia, New Jersey, Nevada, New York, Tennessee and Texas. As an
integral part of its dealership operations, United Auto sells used vehicles
and operates eight stand-alone United Auto Mart used vehicle retail centers.
United Auto dealerships market a complete line of aftermarket automotive
products and services through United AutoCare. The Company also owns Atlantic
Auto Finance Corporation, a finance company engaged in the purchase, sale and
servicing of prime credit quality automobile loans. The Company expects to
operate 58 franchises upon the completion of the previously announced
acquisitions.
This press release contains forward-looking information, and actual
results may vary from those expressed or implied herein. Factors that could
affect these results include those mentioned in the Company's 1996 Annual
Report and Form 10-K on file with the Securities and Exchange Commission.
UNITED AUTO GROUP, INC.
Consolidated Statements of Operations (unaudited)
($ Thousands, except EPS data)
First Quarter
1997 1996 1996
Actual Pro Forma(a) Actual
Auto Dealerships
Vehicle Sales $340,833 $322,803 $233,139
Finance and Insurance 13,483 11,801 9,942
Service and Parts 33,884 29,843 18,638
Total Revenues 388,200 364,447 261,719
Cost of Sales, including floor
plan interest 340,588 320,454 232,502
Gross Profit 47,612 43,993 29,217
Selling, General & Administrative
Expenses 41,756 37,112 27,618
Operating Income 5,856 6,881 1,599
Other Income and Interest (Expense) (172) (85) (128)
Income Before Income Taxes -
Auto Dealerships 5,684 6,796 1,471
Auto Finance
Revenues 985 412 412
Interest Expense (144) (86) (86)
Operating and Other Expenses (937) (590) (590)
Loss Before Income Taxes -
Auto Finance (96) (264) (264)
Total Company
Income before minority interests and
provision for income taxes 5,588 6,532 1,207
Minority Interests (36) -- (500)
Provision for Income Taxes (2,235) (2,864) (536)
Net Income $3,317 $3,668 $171
Earnings Per Share $0.19 $0.21 $0.02
Weighted Average shares
outstanding 17,758 17,872 7,449
(a) The Consolidated Statements of Operations has been restated to
reflect on a pro forma basis the Company's completion of its initial public
offering of 6,250,000 shares on October 28, 1996 and the contemporaneous
acquisitions and other transactions related to the Company's IPO.
SOURCE United Auto Group, Inc.