Hometown Auto Reports Record Q2 and Six Months 1999 Revenues
5 August 1999
Hometown Auto Reports Record Second Quarter and Six Months 1999 Revenues; Revenues Increased 17.5%
WATERTOWN, Conn.--Aug. 4, 1999--HOMETOWN AUTO RETAILERS, INC. (Nasdaq NM:HCAR) today announced record revenues for the second quarter and six months ended June 30, 1999. Results for the second quarter 1999 are actual results while the results for the second quarter of 1998 are pro forma as if acquisitions through December 31, 1998 had taken place on January 1, 1998. In addition, certain expenses were adjusted.Revenue for the second quarter increased 17.5% to $77.2 million compared to $65.7 million in the second quarter of 1998. Gross profit rose 23.4% to $10.2 mm from $8.3 million. Net income was $688,000 or $0.11 per diluted share versus $966,000 or $0.16 per diluted share for the second quarter of 1998. Gross profit as a percent of sales was 13.3% compared to 12.6% for the same period last year.
Revenue for the six-months ended June 30, 1999 was $135.8 million compared to $126.9 million for the same period of 1998. In the first half of 1999, gross profit rose 8.6% to $17.8 million from $16.4 million in the first half of 1998. Net income was $839,000 or $0.14 per diluted share versus $1.9 million or $0.32 per diluted share in the prior year period.
Joseph Shaker, President and COO, commented, "We are very pleased with the improvement in our gross profit. The increase is evidence that the programs we initiated to integrate and more closely supervise operations are working well. Hometown's implementation of company-wide policies and procedures, as well as benchmarking sessions to grade the performance of each department, at each dealership, is proving highly effective. Recently we were able to negotiate agreements to work with a single extended warranty provider and only one oil vendor to service each of our locations. By consolidating these vendors, we expect to save at least $300,000 a year."
Mr. Shaker added, "The Newburgh Toyota dealership we acquired on April 1st has proved to be an excellent addition to Hometown Auto. We continue to negotiate with several dealerships, including dealership groups, to expand our reach throughout the Northeast by acquiring successful businesses like Newburgh Toyota. We continue to make progress toward achieving our goal to be at a $500 million run rate by year end. In addition, by continuing to implement our best-practices programs throughout the Hometown Auto system we will improve profitability."
Hometown Auto Retailers, Inc. is engaged in the business of selling new and used cars and light trucks, providing maintenance and repair services, selling replacement parts and providing related financing, insurance and service contracts through 11 franchised dealerships located in New Jersey, New York, Connecticut, Massachusetts and Vermont. The Company's dealerships offer 11 American and Asian automotive brands, including Chevrolet, Chrysler, Dodge, Ford, Isuzu, Jeep, Lincoln, Mercury, Oldsmobile, Plymouth and Toyota. The Company is active in two "niche" segments of the automotive market: the sale of Lincoln Town Cars and limousines to livery car and livery fleet operators and the maintenance and repair of cars and trucks at a Ford and Lincoln Mercury factory authorized free-standing service center.
This release contains "forward-looking statements" based on current expectations but involving known and unknown risks and uncertainties. Actual results or achievements may be materially different from those expressed or implied. The Company's plans and objectives are based on assumptions involving judgments with respect to future economic, competitive and market conditions, its ability to consummate, and the timing of, acquisitions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Therefore, there can be no assurance than any forward-looking statement will prove to be accurate.
Hometown Auto Retailers, Inc.
Unaudited Statements of Operations
(in thousands, except per share information)
For the Three For the Six
Months ended months ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
(Pro Forma) (Pro Forma)
Revenues:
New vehicle sales $ 45,702 $ 38,323 $ 81,301 $ 71,816
Used vehicle sales 23,530 20,196 40,306 40,709
Parts and service sales 6,126 5,587 11,034 11,283
Other dealership
revenues, net 1,802 1,558 3,149 3,068
-------- -------- -------- --------
Total revenues 77,160 65,664 135,790 126,876
Cost of sales 66,936 57,380 117,960 110,453
-------- -------- -------- --------
Gross profit 10,224 8,284 17,830 16,423
Amortization of goodwill 150 102 286 206
Selling, general and
administrative expenses 8,343 6,314 15,268 12,578
-------- -------- -------- --------
Income from
operations 1,731 1,868 2,276 3,639
Other income (loss) (524) (258) (818) (530)
-------- -------- -------- --------
Income before taxes 1,207 1,610 1,458 3,109
Provision for income taxes 519 644 619 1,244
-------- -------- -------- --------
Net income $ 688 $ 966 $ 839 $ 1,865
======== ======== ======== ========
Earnings per share basic $0.12 $0.16 $0.14 $0.32
Earnings per share diluted $0.11 $0.16 $0.14 $0.32
Weighted average shares
basic (millions) 5.90 5.80 5.85 5.80
Weighted average shares
diluted (millions) 6.05 5.80 5.93 5.80