UnitedAuto Reports Results for Third Quarter 1999
26 October 1999
UnitedAuto Reports Results for Third Quarter 1999
NEW YORK--Oct. 26, 1999--Fully Diluted Share of $0.32 On 21% Revenue
Increase of $1.09 Billion
Same-Store Dealership Retail Revenues Increases $127 Million,
or 17.9% and Retail Gross Profit Increases 12.9%
Versus the Prior Year
UnitedAuto Group, Inc. , the nation's second largest publicly-traded automotive retailer, today announced results for the quarter which ended September 30, 1999.
Third quarter revenues increased 21.0% to $1.09 billion versus $897.0 million in the comparable prior year period. Of the $1.09 billion in third quarter dealership revenues, vehicle sales represented 86.2%, or $935.3 million of the total; finance and insurance revenues represented 4.2%, or $45.7 million of the total; and service and parts revenues of $104.4 million represented the remaining 9.6%.
Net income for the third quarter of 1999 increased by 13% to $9.3 million, or earnings per share of $0.32 on a fully diluted basis after an extraordinary gain of $0.3 million; versus net income of $8.2 million, or earnings per share of $0.39, in the comparable prior year period. Weighted average shares increased by approximately 40.1% to 29,048,000 in the third quarter of 1999 compared to 20,726,000 in the comparable prior year period. The increase resulted primarily from the issuance of $83 million in convertible preferred stock to Penske Capital Partners in connection with its investment in UnitedAuto.
The Company's total retail, new and used units sold, increased by 18.1%. The Company's retail sales of new and used vehicles during the third quarter of 1999 amounted to 26,060 and 14,106 respectively; versus new and used retail unit sales of 21,125 and 12,871, respectively, during the comparable 1998 period.
Roger Penske, Chairman said: "We continue to be pleased with our operational progress in the third quarter as we position the Company to initiate certain operational and strategic changes we believe will enhance UnitedAuto's profitability."
Sam DiFeo, Jr., President added: "For the third quarter, same-store total retail revenue showed positive results increasing by 17.9%. Same-store retail gross profit also increased 12.9%. These improvements were driven by a 15.2% increase in retail units sold, and a 9.0% increase in service and parts revenue versus the third quarter of 1998."
For the nine months, which ended September 30, 1999, revenues were $3.03 billion, as compared to $2.51 billion in the comparable prior year period.
Net income for first nine months of 1999 increased 23.7% to $21.6 million, or earnings per share of $0.86 on a fully diluted basis, after an extraordinary gain of $0.3 million. Net income was $17.5 million, or earnings per share of $0.86 on a fully diluted basis, for the first nine months of 1998 after an extraordinary charge of $1.2 million. Weighted average shares outstanding were 25,207,000 in the first nine months of 1999 and 20,349,000 in the comparable prior year period.
Of the $3.03 billion in dealership revenues in the first nine months, vehicle sales represented 86.1%, or $2.61 billion of the total; finance and insurance revenues represented 4.1%, or $125.7 million of the total; and service and parts revenues of $297.2 million represented the remaining 9.8%.
The Company's total retail units sold increased by 17.6% in the first nine months of 1999 versus the comparable period in 1998. The Company's retail sales of new and used vehicles during the first nine months of 1999 amounted to 70,318 and 40,192, respectively; versus new and used retail units sales of 58,069 and 35,934, respectively, during the comparable 1998 period.
Investment from Penske Capital Partners
As previously announced, affiliates of Penske Capital Partners completed the transaction involving $83.0 million in new capital. As a result, UnitedAuto received the final installment relating to the investment, amounting to approximately $49.5 million, on August 3, 1999. Proceeds from the investment were used to retire debt.
UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships as well as from strategic acquisitions, operates [104] 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 expected 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.
UNITEDAUTO GROUP, INC.
Consolidated Statements of Operations (unaudited)
(Amounts in Thousands, Except Per Share Data)
Third Quarter
--------------------------------------
1999 1998
Vehicle Sales $935,270 $766,885
Finance and Insurance 45,679 37,333
Service and Parts 104,417 92,788
------------- -------------
Total Revenues 1,085,366 897,006
Cost of Sales,
Including Floor Plan Interest 945,881 774,948
------------- -------------
Gross Profit 139,485 122,058
Selling, General and
Administrative Expenses 117,323 101,676
------------- -------------
Operating Income 22,162 20,382
Other Interest Expense (7,255) (8,407)
Other Income (a) 874 1,779
------------- -------------
Income From Continuing
Operations Before Minority
Interests, Income Tax Provision
and Extraordinary Item 15,781 13,754
Minority Interests (181) (42)
Income Tax Provision (6,631) (5,652)
------------- -------------
Income From Continuing
Operations 8,969 8,060
Income From Discontinued
Operations, Net of Income
Tax Provision 28 167
-------------- -------------
Income Before Extraordinary Item 8,997 8,227
Extraordinary Item, Net
of Income Tax Benefit (b) 320 --
Net Income $9,317 $8,227
============== =============
Diluted Earnings Per Share
From Continuing Operations $0.31 $0.39
============== =============
Diluted Earnings Per Share $0.32 $0.40
============== =============
Diluted Weighted Average
Shares Outstanding (c) 29,048 20,726
============== =============
EBITDA $27,982 $27,573
(a) Represents fees received pursuant to management agreements at
certain dealerships for which acquisition is pending final
manufacturer approval.
(b) Represents the gain on the effective retirement of $12.0 million
of the Company's Senior Subordinated Notes (the "Notes"), offset
in part by the write-off of a portion of the debt issuance costs
related to the Notes.
(c) The 1999 weighted average share calculation includes the dilutive
effect of 3.7 million shares of common stock equivalents issued
to affiliates of Penske Capital Partners on May 3, 1999, as well
as the dilutive effect of 4.6 million shares of common stock
equivalents and warrants to purchase 5.0 million shares of voting
and non-voting common stock issued to affiliates of Penske
Capital Partners on August 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.
UNITEDAUTO GROUP, INC.
Consolidated Statements of Operations (unaudited)
(Amounts in Thousands, Except Per Share Data)
Nine Months
---------------
1999 1998
Vehicle Sales $2,610,785 $2,163,492
Finance and Insurance 125,678 95,341
Service and Parts 297,233 246,301
--------- ---------
Total Revenues 3,033,696 2,505,134
Cost of Sales, Including
Floor Plan Interest 2,641,345 2,181,290
--------- ---------
Gross Profit 392,351 323,844
Selling, General and
Administrative Expenses 332,359 272,683
--------- --------
Operating Income 59,992 51,161
Other Interest Expense (23,510) (23,381)
Other Income (a) 2,270 3,627
-------- -------
Income From Continuing
Operations Before Minority
Interests, Income Tax Provision
And Extraordinary Item 38,752 31,407
Minority Interests (542) (126)
Income Tax Provision (16,923) (12,903)
------- -------
Income From Continuing Operations 21,287 18,378
Income From Discontinued
Operations, Net of Income
Tax Provision 28 341
------- ------
Income Before Extraordinary Item 21,315 18,719
Extraordinary Item, Net of Income
Tax (b) 320 (1,235)
------- ------
Net Income $21,635 $17,484
======= ======
Diluted Earnings Per Share From
Continuing Operations $0.84 $0.90
======= ======
Diluted Earnings Per Share $0.86 $0.86
======= ======
Diluted Weighted Average Shares
Outstanding (c) 25,207 20,349
======= ======
EBITDA (d) $76,442 $68,654
======= ======
(a) Represents fees received pursuant to management agreements at
certain dealerships for which acquisition is pending final
manufacturer approval.
(b) In 1999 represents the gain on the effective retirement of $12.0
million of the Notes, offset in part by the write-off of a
portion of the debt issuance costs related to the Notes. In 1998
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 affiliates of Penske Capital Partners on May 3, 1999, as well
as the dilutive effect of 4.6 million shares of common stock
equivalents and warrants to purchase 5.0 million shares of voting
and non-voting common stock issued to affiliates of Penske
Capital Partners on August 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.