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UNITEDAUTO REPORTS RECORD FIRST QUARTER
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Q1 Revenues Increase 25.5% to $2.0 Billion

Q1 Income from Continuing Operations Increases 8.6% to $16.8 Million

Q1 Earnings Per Share from Continuing Operations Increases 5.1% to $0.41 Per Share


Q1 Same Store Retail Revenues Increase 3.4% and Related Gross Profit Increases 3.9%


DETROIT, MI, APRIL 28, 2003 - United Auto Group, Inc. (NYSE: UAG), a FORTUNE 500 automotive specialty retailer, today announced results for first quarter 2003, including growth in revenues, gross profit and operating income. First quarter revenues increased 25.5% to a record $2.0 billion. Revenue growth was driven by increases in same store sales for new retail vehicles, used retail vehicles, service and parts, and finance and insurance of 2.4%, 4.2%, 6.2% and 11.6%, respectively.

Income and earnings per share from continuing operations increased 8.6% and 5.1% to a record $16.8 million and $0.41, respectively. Including the cumulative effect of a change in accounting principle, as required by recently defined accounting principles (EITF 02-16) relating to floor plan and advertising credits provided by automotive manufacturers, net income and earnings per share were $13.7 million and $0.34, respectively. Earnings per share reflect a 4.4% increase in weighted average shares outstanding.

Chairman Roger Penske commented, “UnitedAuto performed well despite the economic, political and weather related challenges in the first quarter. Although the U.S. market saw a 4.4% decline in new unit sales during the first quarter, our operating strategy and the strength of our brand mix resulted in a 2.4% increase in same store new retail revenue. I am also pleased that we grew our same store service and parts revenue 6.2% in the quarter, as the additional capacity provided by our facility investment program continues to pay dividends. We expect to see continued expansion of this element of our business in the future. In addition, our margin on service and parts business continued its growth, increasing 1.8 percentage points during the first quarter to 47.8%. We reiterate our earnings projection of $1.96-$2.06 per share (excluding the cumulative effect of the change in accounting principle), with a second quarter estimate of $0.55-$0.60 per share. Our estimates are based upon 41.2 million weighted average shares outstanding and same store retail revenue growth of 2% to 4%.”

UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 129 franchises in the United States and 71 franchises internationally, primarily in the United Kingdom. UnitedAuto dealerships sell new and used vehicles, and market a complete line of aftermarket automotive products and services.

UnitedAuto will host a conference call discussing financial results relating to first quarter 2003 on Monday, April 28, 2003 at 2 P.M. Eastern time. Advance registration is not required. Participants must call (800) 553-0351 (International, please call (612) 332-0530). Calls need to be made shortly before the call is to commence. The call will also be simultaneously broadcast live over the Internet through the UnitedAuto website at www.unitedauto.com.

Statements in this press release may involve forward-looking statements, including forward-looking statements regarding UnitedAuto's future sales and earnings growth potential. Actual results may vary materially because of risks and uncertainties, including external factors such as interest rate fluctuations, changes in consumer spending and other factors over which management has no control. These forward-looking statements should be evaluated together with additional information about UnitedAuto's business, markets, conditions and other uncertainties which could affect UnitedAuto's future performance, which are contained in UnitedAuto's Form 10-K for the year ended December 31, 2002 and its other filings with the Securities and Exchange Commission and which are incorporated into this press release by reference.

UNITED AUTO GROUP, INC.
Consolidated Statements of Income (Unaudited)
(Amounts In Thousands, Except Per Share Data)

 
First Quarter
 
2003
2002

New Vehicles

$1,116,662

$946,309

Used Vehicles

445,666

299,917

Finance and Insurance

48,830

37,714

Service and Parts

214,681

162,538

Fleet

29,404

31,324

Wholesale

121,568

97,130

   Total Revenues

1,976,811

1,574,932

Cost of Sales

1,689,659

1,346,792

   Gross Profit

287,152

228,140

SG&A Expenses

239,310

185,683

   Operating Income

47,842

42,457

Floor Plan Interest Expense

(9,088)

(8,299)

Other Interest Expense

(10,350)

(7,868)

   Income from Continuing
   Operations Before
   Minority Interests and
   Income Tax Provision

28,404

26,290

Minority Interests

(393)

(416)

Income Tax Provision

(11,220)

(10,416)

   Income from Continuing
   Operations

16,791

15,458

Income from Discontinued Operations, Net of Tax

--

253

   Income Before Cumulative
   Effect of
   Accounting Change

16,791

15,711

   Cumulative Effect of
   Accounting Change (a)

(3,058)

--

   Net Income

$13,733

$15,711

Income from Continuing
   Operations Per Diluted
   Share

$0.41

$0.39

   Cumulative Effect of
   Accounting Change on
   Diluted EPS

($0.07)

--

Diluted EPS

$0.34

$0.40

Diluted Weighted Average
   Shares Outstanding
40,920
39,196
EBITDA (b)
$46,115
$38,557

  1. (a) Represents a cumulative accounting change resulting from the adoption of EITF 02-16, “Accounting by a Customer (including a Reseller) for Certain Consideration Received from a Vendor”.
  2. EBITDA is defined as income from continuing operations before minority interests, income tax provision, other interest expense, depreciation and amortization. While EBITDA should not be construed as a substitute for income from continuing operations or as a better measure of liquidity than cash flows from operating activities, which are determined in accordance with U.S. GAAP, it is included in this press release to provide additional information regarding the amount of cash our business is generating. This measure may not be comparable to similarly titled measures reported by other companies. Following is a reconciliation of income from continuing operations before minority interests and income tax provision and EBITDA:

 
First Quarter
 

2003

2002

           Income from continuing
           operations before
           minority interests
           and income tax provision

$   28.4

$   26.3

                 Other interest expense
10.4
7.9
                 Depreciation and
           amortization
7.3
4.4
                 EBITDA (b)
$   46.1
$   38.6

UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)

3/31/03
12/31/02
Assets
(unaudited)
Cash and Cash Equivalents
$11,468
$8,069
Accounts Receivable, Net
324,791
319,625
Inventories
1,087,397
973,185
Other Current Assets
40,260
27,869
   Total Current Assets
1,463,916
1,328,748
Property and Equipment, Net
346,837
313,496
Goodwill
951,302
945,303
Other Intangibles, Net
36,025
36,025
Other Assets
77,873
66,742
   Total Assets
$2,875,953
$2,690,314
Liabilities and Stockholders' Equity
Floor Plan Notes Payable
$1,000,466
$907,903
Accounts Payable and Accrued Expenses
294,246
276,593
Current Portion Long - Term Debt
5,115
14,979
   Total Current Liabilities
1,299,827
1,199,475
Long - Term Debt (a)
715,110
651,256
Other Long-Term Liabilities
148,689
135,141
   Total Liabilities
2,163,626
1,985,872
Stockholders' Equity
712,327
704,442
Total Liabilities and Stockholders' Equity
$2,875,953
$2,690,314
  1. Undrawn capacity under the Company's credit facilities amounted to approximately $344 million as of March 31, 2003.

UNITED AUTO GROUP, INC.
Selected Data

First Quarter

2003

2002

Units

 

 

New Retail Units

38,958

34,689

Used Retail Units

21,877

17,298

Total Retail Units

60,835

51,987

 

 

 

Same Store Retail Revenue

 

 

New Vehicles

$901,262

$880,553

Used Vehicles

282,134

270,773

Finance and Insurance

36,146

32,402

Service and Parts

162,607

153,182

Total Same Store Retail Revenue

$1,382,149

$1,336,910

 

 

 

Same Store Retail Revenue Growth

 

 

New Vehicles

2.4%

7.3%

Used Vehicles

4.2%

2.3%

Finance and Insurance

11.6%

12.4%

Service and Parts

6.2%

7.7%

 

 

 

Revenue Mix

 

 

New Vehicles

56.5%

60.1%

Used Vehicles

22.5%

19.0%

Finance and Insurance

2.5%

2.4%

Service and Parts

10.9%

10.3%

Fleet

1.5%

2.0%

Wholesale

6.1%

6.2%

 

 

 

Retail Gross Margin - by Product

 

 

New Vehicles

8.4%

8.6%

Used Vehicles

9.5%

11.2%

Finance and Insurance

100.0%

100.0%

Service and Parts

47.8%

46.0%

 

 

 

Gross Profit per Transaction

 

 

New Vehicles

$2,411

$2,351

Used Vehicles

1,932

1,936

Finance and Insurance

803

725

 

 

 

Brand Mix:        
Toyota/Lexus
22%
26%
BMW
14%
8%
Honda/Acura
12%
12%
General Motors
11%
14%
Mercedes
9%
7%
Chrysler
9%
10%
Nissan/Infiniti
5%
7%
Ford
4%
6%
Other
14%
10%

 

 

 

Debt to Total Capital Ratio
50%
47%

Media Contact:
Phillip M. Hartz
Senior VP - Corporate Communications
248-648-2610