UnitedAuto Reports Results for Second Quarter 1999
26 July 1999
UnitedAuto Reports Results for Second Quarter 1999
Business Editors
NEW YORK--July 26, 1999--
Company Reports Net Income of $8.6 Million,
or Earnings Per Fully Diluted Share of $0.35, on Revenues of $1.04
Billion
Same-store Dealership Revenues Increase 8.1%
and Gross Profit Increase 10.0%, Versus the Prior Year
UnitedAuto Group, Inc. , the nation's second largest
publicly-traded automotive retailer, today announced results for the
quarter ended June 30, 1999.
Second quarter revenues increased 16.4% to $1.04 billion versus
$896.4 million in the comparable prior year period. Of the $1.04
billion in second quarter dealership revenues, vehicle sales
represented 86.3%, or $900.2 million of the total; finance and
insurance revenues represented 4.1%, or $43.3 million of the total;
and service and parts revenues of $100.1 million represented the
remaining 9.6%.
Net income for the second quarter of 1999 was $8.6 million or
earnings per share of $0.35 on a fully diluted basis, versus net
income of $8.0 million or earnings per share of $0.40 in the
comparable prior year period. Weighted average shares increased by
approximately 20% to 24,422,000 in the second quarter of 1999
compared to 20,406,000 in the comparable prior year period. The
increase resulted primarily from those shares newly issued to Penske
Capital Partners in connection with its previously announced
investment in UnitedAuto. The gross profit margin for the quarter
was 12.9% compared to 12.6% in the comparable prior year period.
The Company's total retail new and used units sold increased by
11.4%. The Company sold 24,018 new and 13,517 used vehicles during
the second quarter of 1999 versus 21,045 new and 12,636 used
vehicles for the comparable 1998 period.
Roger S. Penske, Chairman said, "We continue to be pleased with our
operational progress in the second quarter as we position the
Company to initiate certain operational and strategic changes we
believe will enhance UnitedAuto's profitability."
Samuel X. DiFeo, President, added, "For the second quarter,
same-store total revenue showed positive results, increasing by
8.1%, and same-store gross profit increased 10.0%. This improvement
was driven by a 4.0% increase in retail units sold and an 8.8%
increase in service and parts revenue for the second quarter of
1998."
For the six months ended June 30, 1999, revenues were $1.95 billion
as compared to $1.60 billion in the comparable prior year period.
Net income for the first half of 1999 increased 32.3% to $12.3
million, or earnings per share of $0.53 on a fully diluted basis.
Net income was $9.3 million, or earnings per share of $0.46 on a
fully diluted basis, for the first half of 1998 after an
extraordinary charge of $1.2 million. Weighted average shares
outstanding were 23,202,000 in the first half of 1999 and 20,134,000
in the comparable prior year period.
Of the $1.95 billion in dealership revenues in the first half,
vehicle sales represented 86.0%, or $1.68 billion of the total;
finance and insurance revenues represented 4.1% or $80.0 million of
the total; and service and parts revenues of $192.8 million
represented the remaining 9.9%.
The Company's total retail units sold increased by 17.2% in the
first half of 1999 versus the comparable period in 1998. The
Company sold 44,258 new and 26,086 used vehicles during the first
half of 1999 versus 36,944 new and 23,063 used vehicles for the
comparable 1998 period.
Investment from Penske Capital Partners
Penske Capital Partners and the Company are continuing with their
plans to complete the previously announced transaction involving
$83.0 million in new capital. UnitedAuto received the first $33.5
million installment of the investment on May 3, 1999 and, at that
time, the Board of Directors named Roger S. Penske as Chairman. The
$49.5 million second installment is expected to close immediately
following shareholder approval on August 3, 1999.
UnitedAuto, which has pursued a strategy based on internal growth
from its existing dealerships as well as from strategic
acquisitions, operates 103 franchises in 16 states and Puerto Rico.
UnitedAuto dealerships sell new and used vehicles and market a
complete line of aftermarket automotive products and services.
Penske Capital Partners was formed in 1997 to make investments in
the transportation and transportation services industries.
This press release contains forward-looking information, and actual
results may materially vary from those expressed or implied herein.
Factors, including economic conditions, manufacturer approvals and
acquisition risks, that could affect these results are described in
reports and documents filed by the Company with the Securities and
Exchange Commission.
Media Contact:
David Bright
Director, Communications
212 230-0488
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UNITEDAUTO GROUP, INC.
Consolidated Statements of Operations (unaudited)
(Amounts in Thousands, Except Per Share Data)
Second Quarter
1999 1998
Vehicle Sales $900,155 $779,633
Finance and Insurance 43,335 33,619
Service and Parts 100,108 83,167
Total Revenues 1,043,598 896,419
Cost of Sales, Including
Floor Plan Interest 908,987 783,857
Gross Profit 134,611 112,562
Selling, General and
Administrative Expenses 111,484 92,466
Operating Income 23,127 20,096
Other Interest Expense (7,813) (7,880)
Other Income (a) 602 1,495
Income From Continuing
Operations Before
Minority Interests
and Income Tax Provision 15,916 13,711
Minority Interests (213) (50)
Income Tax Provision (7,083) (5,634)
Income From Continuing
Operations 8,620 8,027
Income From Discontinued
Operations, Net of Income Tax
Provision -- 166
Net Income $8,620 $8,193
Diluted Earnings Per Share
From Continuing Operations $0.35 $0.40
Diluted Earnings Per Share $0.35 $0.40
Diluted Weighted Average
Shares Outstanding (b) 24,422 20,406
EBITDA (c) $28,408 $25,704
(a) Represents fees received under management agreements at certain
dealerships for which acquisition is pending final manufacturer
approval.
(b) The 1999 weighted average share calculation includes the
dilutive effect of 3.7 million shares of common stock equivalents
issued to Penske Capital Partners on May 3, 1999.
(c) EBITDA is defined as income from continuing operations before
minority interests, income tax provision, extraordinary item,
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)
First Half
1999 1998
Vehicle Sales $1,675,515 $1,396,607
Finance and Insurance 79,999 58,008
Service and Parts 192,816 153,513
Total Revenues 1,948,330 1,608,128
Cost of Sales, Including
Floor Plan Interest 1,695,464 1,406,342
Gross Profit 252,866 201,786
Selling, General and
Administrative Expenses 215,036 171,007
Operating Income 37,830 30,779
Other Interest Expense (16,255) (14,974)
Other Income (a) 1,396 1,848
Income From Continuing Operations Before
Minority Interests, Income Tax
Provision And Extraordinary Item 22,971 17,653
Minority Interests (361) (84)
Income Tax Provision (10,292) (7,251)
Income From Continuing Operations 12,318 10,318
Income From Discontinued Operations, Net
of Income Tax Provision -- 174
Income Before Extraordinary Item 12,318 10,492
Extraordinary Item, Net of Income
Tax Benefit (b) -- (1,235)
Net Income $12,318 $9,257
Diluted Earnings Per Share From
Continuing Operations $0.53 $0.52
Diluted Earnings Per Share $0.53 $0.46
Diluted Weighted Average Shares
Outstanding (c) 23,202 20,134
EBITDA (d) $48,460 $40,179
(a) Represents fees received under management agreements at certain
dealerships for which acquisition is pending final manufacturer
approval.
(b) Represents the write-off of debt issuance costs related to the
termination of the Company's then existing credit facility in the
first quarter of 1998.
(c) The 1999 weighted average share calculation includes the
dilutive effect of 3.7 million shares of common stock equivalents
issued to Penske Capital Partners on May 3, 1999.
(d) EBITDA is defined as income from continuing operations before
minority interests, income tax provision, extraordinary item,
interest expense (exclusive of interest expense relating to floor
plan notes payable), depreciation and amortization.
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