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UnitedAuto reports fourth quarter and full year records, before one time items
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Q4 income increases 25% to $13.9 million

Q4 earnings per share increases 10% to $0.34 per share

Full year earnings per share increases 41% to $1.82


Full Year Same Store Retail Revenues Increase 3.8% and Related Gross Profit Increases 5.9%


Company to Acquire INSKIP Autocenter in Warwick, RI

DETROIT, MI, FEBRUARY 19, 2003 - United Auto Group, Inc. (NYSE: UAG), a FORTUNE 500 automotive specialty retailer, today announced record results for fourth quarter 2002 including double-digit growth in revenues, income and earnings per share, before one time items. The record results were driven by increases in same store service and parts and finance and insurance revenues of 7.6% and 8.4%, respectively.

Fourth quarter revenues increased 24% to a record $1.9 billion. Excluding one time items, income and earnings per share from continuing operations increased 25% and 10% to $13.9 million and $0.34, respectively. Including the impact of one time items and discontinued operations, net income and earnings per share were $0.7 million and $0.02 per share, respectively. Earnings per share reflect a 15% increase in weighted average shares outstanding.

For the twelve months ended December 31, 2002, revenues increased 27% to a record $7.4 billion. Excluding one time items, income and earnings per share from continuing operations increased 70% and 41% to $74.8 million and $1.82, respectively. Including the impact of one time items and discontinued operations, net income and earnings per share were $62.2 million and $1.51 per share, respectively. Earnings per share reflect a 20% increase in weighted average shares outstanding.

Chairman Roger Penske commented, "I am pleased UnitedAuto was able to meet the challenges presented in the fourth quarter 2002. Compared with the industry record 2001 fourth quarter, same store new retail revenues declined by 1.6% versus an overall industry decrease of 10%, and same store used retail revenues declined 5.3%. Despite these modest declines, overall same store retail gross profit increased 3% as a result of the outstanding performance of our service and parts and finance and insurance operations. The capacity expansion provided by our facility investment program contributed to the 7.6% increase in same store service and parts revenues. I believe we will see continued expansion of this portion of our business in the future. In addition, our margin on the service and parts business continued its steady growth, increasing 2.3 percentage points during the fourth quarter to 47.6%. As we move into 2003, we expect to earn $1.96-$2.06 per share, with first quarter earnings of $0.35-$0.40 per share. Our estimates are based upon 41.2 million weighted average shares outstanding and same store retail revenue growth of 2% to 4%."

President Sam DiFeo stated, "Our business exhibited its resiliency during the fourth quarter. We demonstrated that our diverse revenue streams provide protection against declines in the retail sales of new and used vehicles. I continue to believe that our focus on customer satisfaction will drive growth in all elements of our business as we strive to continue increasing market share in all of our markets."

During the fourth quarter of 2002, UnitedAuto settled certain long-term contracts in conjunction with a streamlining of its western regional structure. These contracts were related to acquisitions made in 1996. The Company also determined that a non-compete agreement with a former member of management has no future value. Accordingly, the Company recorded a $13.6 million ($0.33 per share) after-tax charge relating to these contracts.

The Company also announced the signing of a definitive agreement to acquire the INSKIP Autocenter in Warwick, Rhode Island. INSKIP represents nine brands, including Acura, Audi, Bentley, BMW, Infiniti, Lexus, Mercedes-Benz, Porsche and Volvo, with estimated annualized revenues of $300 million. The transaction is subject to customary conditions and is expected to close early second quarter 2003.

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 forth quarter 2002 on Wednesday, February 19, 2003 at
2 P.M. Eastern time. Advance registration is not required.
Participants must call (800) 553-0358 (International, please call (612) 332-7515). 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 reportable sales and earnings growth potential. Actual results may vary materially because of 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 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)

 
Fourth Quarter
 
2002
2001

New Vehicles

$1,111,799

$960,065

Used Vehicles

384,504

268,920

Finance and Insurance

44,653

35,947

Service and Parts

207,595

149,485

Fleet

17,600

20,562

Wholesale

111,078

84,986

   Total Revenues

1,877,229

1,519,965

Cost of Sales

1,604,831

1,309,586

   Gross Profit

272,398

210,379

SG&A Expenses

227,795

173,725

One Time Items (a)
22,839
--

   Operating Income

21,764

36,654

Floor Plan Interest Expense

(9,629)

(8,697)

Other Interest Expense

(10,698)

(7,545)

   Income from Continuing
   Operations Before
   Minority Interests and
   Income Taxes

1,437

20,412

Minority Interests

(585)

(451)

Income Tax Provision

(582)

(8,879)

   Income from Continuing
   Operations

270

11,082

Income from Discontinued Operations, Net of Tax (Including Gain on Disposal of $4,426)

382

200

   Net Income

$652

$11,282

Income from Continuing
   Operations Per Diluted
   Share

$0.01

$0.31

Diluted Earnings Per Share

$0.02

$0.32

Diluted Weighted Average
   Shares Outstanding
41,037
35,652
EBITDA (b)
$18,677
$36,746


Same Store Retail Revenue

New Vehicles
$920,549
$935,478
Used Vehicles
249,972
263,907
Finance and Insurance
33,778
31,171
Service and Parts
156,202
145,235
   Total
$1,360,501
$1,375,791
  1. Represents costs associated with settlement of long term contracts.
  2. EBITDA is defined as income from continuing operations before minority interests, income tax provision, other interest expense, depreciation and amortization. Depreciation was $6.5 million and $3.7 million in 2002 and 2001, respectively. Amortization was $5.1 million in 2001.

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

 
Twelve Months
 
2002
2001

New Vehicles

$4,415,552

$3,578,182

Used Vehicles

1,491,107

1,076,249

Finance and Insurance

177,936

142,652

Service and Parts

772,816

585,099

Fleet

110,955

139,623

Wholesale

466,500

348,449

   Total Revenues

7,434,866

5,870,254

Cost of Sales

6,372,656

5,054,902

   Gross Profit

1,062,210

815,352

SG&A Expenses

859,391

661,089

One Time Items (a)
22,839
--

   Operating Income

179,980

154,263

Floor Plan Interest Expense

(35,652)

(40,274)

Other Interest Expense

(38,532)

(34,762)

   Income from Continuing
   Operations Before
   Minority Interests and
   Income Taxes

105,796

79,227

Minority Interests

(1,968)

(815)

Income Tax Provision

(42,617)

(34,462)

   Income from Continuing
   Operations

61,211

43,950

Income from Discontinued Operations, Net of Tax (Including Gain on Disposal of $6,115)

1,030

795

   Net Income

$62,241

$44,745

Income from Continuing
   Operations Per Diluted
   Share

$1.49

$1.29

Diluted Earnings Per Share

$1.51

$1.31

Diluted Weighted Average
   Shares Outstanding
41,161
34,196
EBITDA (b)
$166,632
$147,023


Same Store Retail Revenue

New Vehicles
$3,341,558
$3,186,646
Used Vehicles
943,532
958,495
Finance and Insurance
127,216
115,717
Service and Parts
560,948
528,363
   Total
$4,973,254
$4,789,221
  1. Represents costs associated with settlement of long term contracts.
  2. EBITDA is defined as income from continuing operations before minority interests, income tax provision, other interest expense, depreciation and amortization. Depreciation was $6.5 million and $3.7 million in 2002 and 2001, respectively. Amortization was $5.1 million in 2001.

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

12/31/02
12/31/01
Assets
(unaudited)
Cash and Cash Equivalents
$8,069
$2,952
Accounts Receivable, Net
319,625
239,610
Inventories
973,185
611,889
Other Current Assets
27,869
16,081
   Total Current Assets
1,328,748
870,532
Property and Equipment, Net
313,496
181,290
Intangible Assets, Net
981,328
772,737
Assets of Discontinued Operations
--
66,624
Other Assets
66,742
55,393
   Total Assets
$2,690,314
$1,946,576
Liabilities and Stockholders' Equity
Floor Plan Notes Payable
$907,903
$586,620
Accounts Payable and Accrued Expenses
276,593
157,730
Current Portion Long - Term Debt
14,979
4,202
   Total Current Liabilities
1,199,475
748,552
Long - Term Debt (a)
651,256
551,648
Other Long-Term Liabilities
142,730
92,774
Liabilities of Discontinued Operations
--
37,919
   Total Liabilities
1,993,461
1,430,893
Stockholders' Equity
696,853
515,683
Total Liabilities and Stockholders' Equity
$2,690,314
$1,946,576
  1. Includes $300.0 million of 9.625% subordinated notes at December 31, 2002. Undrawn capacity under the Company's credit facility was $349.2 million as of December 31, 2002.

UNITED AUTO GROUP, INC.
Selected Data

Fourth Quarter

Twelve Months

2002

2001

2002

2001

Units

 

 

New Retail Units

38,806
35,386

158,768

135,402

Used Retail Units

19,477
16,319

77,569

65,597

Total Retail Units

58,283
51,705

236,337

200,999

 

 

 

Revenue Mix

 

 

New Vehicles

59.2%
63.1%

59.3%

61.0%

Used Vehicles

20.5%
17.7%

20.1%

18.3%

Finance and Insurance

2.4%
2.4%

2.4%

2.4%

Service and Parts

11.1%
9.8%

10.4%

10.0%

Fleet

0.9%
1.4%

1.5%

2.4%

Wholesale

5.9%
5.6%

6.3%

5.9%

 

 

 

Retail Gross Margin - by Product

 

 

New Vehicles

8.6%
8.3%

8.5%

8.3%

Used Vehicles

9.5%
10.7%

10.0%

10.6%

Finance and Insurance

100.0%
100.0%

100.0%

100.0%

Service and Parts

47.6%
45.3%

47.1%

44.8%

 

 

 

Gross Profit per Transaction

 

 

New Vehicles

$2,463
$2,260

$2,362

$2,200

Used Vehicles

1,880
1,760

1,927

1,738

Finance and Insurance

766
695

753

710

 

 

 

Same Store Retail Revenue Growth

 

 

New Vehicles

(1.6)%
22.1%

4.9%

10.9%

Used Vehicles

(5.3)%
21.6%

(1.6)%

6.6%

Finance and Insurance

8.4%
29.0%

9.9%

20.0%

Service and Parts

7.6%
5.6%

6.2%

4.2%

 

 

Debt to Total Capital Ratio

49%
52%

49%

53%

         
Brand Mix:        
Toyota/Lexus
23%
30%
24%
30%
Honda/Acura
12%
12%
12%
12%
BMW
12%
6%
11%
5%
General Motors
12%
15%
12%
15%
Mercedes
10%
7%
8%
7%
Chrysler
9%
10%
10%
11%
Nissan/Infiniti
5%
7%
6%
7%
Ford
4%
6%
5%
6%
Other
13%
7%
12%
7%

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