FirstAmerica Automotive, Inc., Reports Results for Second Quarter 1999
9 August 1999
FirstAmerica Automotive, Inc., Reports Results for Second Quarter 1999
SAN FRANCISCO--Aug. 6, 1999--FirstAmerica Automotive, Inc. announced today that net income for the second quarter ended June 30, 1999 increased 34% to $1.5 million from $1.1 million in the second quarter ended June 30, 1998.Net income per diluted share for the second quarter of 1999, before giving effect to the reverse stock split to be completed prior to the consummation of the Company's pending common stock offering, was $0.09 per diluted share and represented a $0.02 per diluted share increase from the same period in 1998.
For the first half of 1999, net income increased 78% to $3.2 million from $1.8 million in the first half of 1998. Net income per diluted share for the first half of 1999, before giving effect to the reverse stock split to be completed prior to the consummation of the Company's pending common stock offering, was $0.19 per diluted share, including an after-tax gain of $0.04 per diluted share from the disposition of a dealership in the first quarter of 1999, which represented an $0.08 per diluted share increase from the same period in 1998.
Total sales for the second quarter of 1999 rose 46% to $267.5 million from $183.0 million in the second quarter of 1998. The $84.5 million increase in sales in the second quarter of 1999 compared to the prior year was due to additional revenue from acquisitions of $51.8 million and increased same store sales of $32.7 million. Total sales for the first half of 1999 rose 47% to $505.7 million from $343.7 million in the first half of 1998. The $162.0 million increase in sales in the first half of 1999 compared to the prior year was due to additional revenue from acquisitions of $108.9 million and increased same store sales of $53.1 million.
Gross profits increased 42% to $41.2 million in the second quarter of 1999 from $28.9 million in the second quarter of 1998. Gross profits for the first half of 1999 increased 46% to $78.1 million from $53.3 million for the same period in the prior year. Overall gross margins decreased to 15.4% in the second quarter of 1999 from 15.8% in the second quarter of 1998, and to 15.4% in the first half of 1999 from 15.5% in the first half of 1998, primarily due to a change in product mix to a higher percentage of new vehicle sales as a percentage of total sales. Gross profit from same store sales increased $5.8 million, or 20%, for the second quarter of 1999 compared to the same period in the prior year, and increased $10.7 million, or 20%, for the first half of 1999 compared to the same period in the prior year.
Operating income during the second quarter of 1999 rose to $6.1 million from $4.6 million in the same quarter of the prior year, representing an increase of 34%. Operating income during the first half of 1999 rose to $11.3 million from $7.9 million in the same period of the prior year, representing an increase of 42%. Income before taxes for the second quarter of 1999 rose 34% to $2.5 million from $1.9 million in the same quarter of the prior year. Income before taxes for the first half of 1999 rose 77% to $5.7 million from $3.2 million in the same period of the prior year.
FirstAmerica Automotive, Inc. is a leading automotive retailer in California, with operations in four major metropolitan markets in California. FirstAmerica is focusing its consolidation strategy in the western United States. It has announced definitive agreements to acquire 9 dealerships which had approximately $503 million in 1998 revenues. Upon completion of its pending acquisitions, FirstAmerica will sell 19 new domestic and foreign brands through 29 new vehicle dealerships.
This press release includes forward-looking statements, including statements with respect to anticipated revenue growth. There are many factors which affect management's views about future events and trends of the Company's business. These factors involve risk and uncertainties that could cause actual results or trends to differ materially from management's views due to certain risk factors, including without limitation economic conditions, risks associated with acquisitions, and the risk factors set forth from time to time in the Company's recent filings with the Securities and Exchange Commission.