UnitedAuto Reports Q3 and Nine Months 1998 Results
22 October 1998
UnitedAuto Reports Third Quarter and Nine Months 1998 Results
NEW YORK--Oct. 22, 1998--Company Reports Net Income of $8.2 Million in the Third Quarter, or
Earnings Per Share of $0.40, on Revenues of $894.7 Million
UnitedAuto Group, Inc. , the nation's second largest publicly-traded automotive retailer, today announced results for the quarter and nine months ended September 30, 1998.
Third quarter revenues increased 42.9% to $894.7 million versus $626.0 million in the comparable prior year period, reflecting the Company's acquisition activity, as well as its commitment to grow its new and pre-owned auto sales, service, financing and extended service contract businesses.
The Company reported net income in the third quarter of 1998 of $8.2 million, or earnings per share of $0.40 on a diluted basis. Gross profit margin for the quarter was 13.6%. Net income was $5.9 million in the third quarter of 1997, or earnings per share of $0.31 on a diluted basis.
Of the $894.7 million in third quarter dealership revenues, vehicle sales represented approximately 85.7%, or $766.9 million of the total; finance and insurance revenues represented approximately 3.9%, or $35.0 million of the total; and service and parts revenues of $92.8 million represented the remaining 10.4%.
The Company sold 21,125 new and 12,871 used vehicles during the third quarter of 1998 versus 15,424 new and 9,574 used vehicles for the comparable 1997 period.
Diluted weighted average shares outstanding were 20,726,000 for the third quarter of 1998 compared to 19,210,000 in 1997.
Marshall S. Cogan, Chairman and Chief Executive Officer, said "During the third quarter we managed the effects of the GM strike and disruption due to Hurricane Georges in Puerto Rico. We are pleased that the results reflect the continued focus we have taken to maximize profitability in each UnitedAuto store through the diversification among vehicle sales, aftermarket product sales and service revenue."
Sam DiFeo, President and Chief Operating Officer, added, "Our continued prudent approach to acquisitions, including the July 1998 acquisition of three dealerships in San Diego, as well as the orderly integration of our other 1998 acquisitions, contributed to the quarter's favorable results."
For the nine months ended September 30, 1998, revenues were $2.5 billion as compared to $1.5 billion in the comparable prior year period.
Net income for the nine months ended September 30, 1998 was $18.7 million, or earnings per share of $0.92 on a diluted basis, before an extraordinary after-tax item of $1.2 million for the write-off of debt issuance costs related to the Company's previous credit facility in the first quarter of 1998. The previous facility was terminated in connection with a new $75.0 million credit facility. Net income was $16.8 million for first nine months of 1997, or earnings per share of $0.91. Weighted average shares outstanding were 20,349,000 for the nine months ended September 30, 1998 compared to 18,481,000 in the comparable prior year period.
Of the $2.5 billion in dealership revenues in the first nine months of 1998, vehicle sales represented approximately 86.6%, or $2.2 billion of the total; finance and insurance revenues represented approximately 3.5% or $89.5 million of the total; and service and parts revenues of $246.3 million represented the remaining 9.9%.
The Company said that it sold 58,069 new and 35,934 used vehicles during the first nine months of 1998 versus 38,181 new and 23,517 used vehicles for the comparable 1997 period.
UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships as well as from strategic acquisitions, operates franchises representing 30 brands in Arizona, Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Louisiana, Nevada, New Jersey, New York, North Carolina, Puerto Rico, South Carolina, Tennessee, and Texas. UnitedAuto dealerships sell new and used vehicles and market a complete line of aftermarket automotive products and services through UnitedAuto Care, Inc. and UnitedAuto Care Products, Inc. The Company also owns UnitedAuto Finance Inc., a finance company engaged in the purchase, sale and servicing of primarily prime credit quality automobile loans.
This press release contains forward-looking information, and actual results may materially vary from those expressed or implied herein. Factors that could affect these results include those mentioned in the Company's Prospectus filed with the Securities and Exchange Commission on December 10, 1997.
Editors Note: UnitedAuto's logo and executive photos can be retrieved in digital form by media without charge from Wieck Photo Database (972) 392-0888.
UNITEDAUTO GROUP, INC.
Consolidated Statements of Operations (unaudited)
(Amounts in Thousands, Except Per Share Data)
Third Quarter (a)
1998 1997
Auto Dealerships
Vehicle Sales $766,885 $549,395
Finance and Insurance 35,032 20,768
Service and Parts 92,788 55,812
Total Revenues 894,705 625,975
Cost of Sales, Including Floor Plan
Interest 772,647 545,334
Gross Profit 122,058 80,641
Selling, General and Administrative
Expenses 101,676 64,644
Operating Income 20,382 15,997
Other Interest Expense (8,407) (5,003)
Other Income(b) 1,779 --
Income Before Income Taxes - Auto
Dealerships 13,754 10,994
UnitedAuto Finance
Revenues 2,995 387
Interest Expense (445) (148)
Operating and Other Expenses (2,289) (1,414)
Income (Loss) Before Income Taxes -
Auto Finance 261 (1,175)
Total Company
Income Before Minority Interests,
Income Tax Provision And
Extraordinary Item 14,015 9,819
Minority Interests (42) (21)
Income Tax Provision (5,746) (3,928)
Income Before Extraordinary Item 8,227 5,870
Extraordinary Item, Net of Income Tax
Benefit -- --
Net Income $8,227 $5,870
Diluted Income Per Share Before
Extraordinary Item $0.40 $0.31
Diluted Income Per Share $0.40 $0.31
Diluted Weighted Average Shares
Outstanding 20,726 19,210
EBITDA (c) $27,573 $17,673
(a) 1997 amounts have been restated to reflect a change in the method
of accounting for new vehicle inventories from LIFO to the
Specific Identification Method.
(b) Represents fees received under management agreements at certain
dealerships for which acquisition is pending final manufacturer
approval.
(c) EBITDA is defined as income before minority interests, income tax
provision, interest expense (exclusive of interest expense
relating to floor plan notes payable), depreciation and
amortization.
UNITEDAUTO GROUP, INC.
Consolidated Statements of Operations (unaudited)
(Amounts in Thousands, Except Per Share Data)
Nine Months Comparative(a)
1998 1997
Auto Dealerships
Vehicle Sales $2,163,492 $1,353,609
Finance and Insurance 89,469 52,280
Service and Parts 246,301 135,244
Total Revenues 2,499,262 1,541,133
Cost of Sales, Including Floor Plan
Interest 2,175,418 1,344,230
Gross Profit 323,844 196,903
Selling, General and Administrative
Expenses 272,683 160,367
Operating Income 51,161 36,536
Other Interest Expense (23,381) (7,249)
Other Income (b) 3,627 297
Income Before Income Taxes - Auto
Dealerships 31,407 29,584
UnitedAuto Finance
Revenues 8,091 2,472
Interest Expense (865) (408)
Operating and Other Expenses (6,692) (3,438)
Income (Loss) Before Income Taxes -
Auto Finance 534 (1,374)
Total Company
Income Before Minority Interests,
Income Tax Provision
And Extraordinary Item 31,941 28,210
Minority Interests (126) (118)
Income Tax Provision (13,096) (11,306)
Income Before Extraordinary Item 18,719 16,786
Extraordinary Item, Net of Income Tax
Benefit (1,235) --
Net Income $17,484 $16,786
Diluted Income Per Share Before
Extraordinary Item $0.92 $0.91
Diluted Income Per Share $0.86 $0.91
Diluted Weighted Average Shares
Outstanding 20,349 18,481
EBITDA (c) $68,654 $42,669
(a) 1997 amounts have been restated to reflect a change in the method
of accounting for new vehicle inventories from LIFO to the
Specific Identification Method.
(b) 1998 amounts represents fees received under management agreements
at certain dealerships for which acquisition is pending final
manufacturer approval.
(c) EBITDA is defined as income before minority interests, income tax
provision, interest expense (exclusive of interest expense
relating to floor plan notes payable), depreciation and
amortization.