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UnitedAuto Reports Record Second Quarter
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Net Income Increased 78% Earnings Per Share Increased 40%

Revenues Increased 25% to $2.0 Billion

Same Store Retail Revenues Increased 2.5%

Thirteenth Consecutive Quarter of Same Store Revenue Growth

DETROIT, MI, July 30, 2002 , United Auto Group, Inc. (NYSE: UAG), a FORTUNE 500 automotive specialty retailer, today announced record results for second quarter 2002 with double-digit growth in revenues, net income and earnings per share. The record results for the quarter were fueled by a 26% increase in retail vehicle sales, a 30% increase in service and parts revenues, a 23% increase in finance and insurance revenues, an improved business mix, gross margin improvement and reduced inventory carrying costs.

Second quarter revenues increased 25% to $2.0 billion and net income increased 78% to $23.9 million. Earnings per share were $0.56, an increase of 40% over the $0.40 reported in second quarter 2001. Earnings per share reflect a 26% increase in weighted average shares outstanding. Excluding the effect of goodwill amortization, net income and earnings per share in second quarter 2001 would have been $16.2 million and $0.48, respectively. On a comparable accounting basis, net income and earnings per share increased 48% and 17%, respectively, over the prior year.

During the second quarter 2002, the Company sold two dealerships which have been treated as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144. Income and earnings per share from continuing operations were $22.8 million and $0.53 per share, respectively, representing increases of 72% and 36% over the comparable prior year period. The Company completed the intangible asset impairment assessment required by Statement of Financial Accounting Standards No. 142 and determined that no adjustment to the carrying value of goodwill is required.

For the six months ended June 30, 2002, revenues increased 23% to $3.6 billion and net income increased 98% to $39.6 million. Earnings per share were $0.96, an increase of 57% over the $0.61 reported in the comparable prior year period. Earnings per share reflect a 26% increase in weighted average shares outstanding. Excluding the effect of goodwill amortization, net income and earnings per share in the six months would have been $25.4 million and $0.78, respectively. On a comparable accounting basis, net income and earnings per share increased 56% and 23%, respectively, over the prior year. Income and earnings per share from continuing operations were $38.4 million and $0.94 per share, respectively, representing increases of 95% and 57% over the comparable prior year period.

Chairman Roger Penske commented, "This was a very positive quarter for UnitedAuto in which we continued to demonstrate the strength of our business model. I am extremely pleased with another quarter of record revenues, net income and earnings per share. We achieved same store revenue growth for both domestic and foreign nameplates. Importantly, our high margin businesses, service and parts as well as finance and insurance, continued their steady growth. Each of these businesses achieved a 5.8% increase in same store revenues. I remain positive about our business over the balance of the year, and our earnings guidance of $1.80 - 1.86 per share from continuing operations remains unchanged."

President Sam DiFeo stated, "I am pleased with the way our people responded to the opportunities presented during the second quarter. Our same store retail gross profit increased 5.1% during the quarter. This is particularly positive given that same store retail revenues increased by 2.5%. Our brand focus and investment in service and parts capacity continues to pay dividends. For example, gross margin increased 50 basis points over second quarter 2001, primarily as a result of the expansion of business and margins in our service and parts operations. We will continue to make the investments necessary to support the growth of our overall business."

UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 124 franchises in the United States and 68 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 second quarter 2002 on Tuesday, July 30, 2002 at 2P.M. Eastern time. Advance registration is not required. Participants must call (888) 560-8501 (International, please call (712) 257-0455). Calls need to be made shortly before the call is to commence. Please provide the leader's name - Roger Penske - as well as the code UAG2Q. The conference call cannot be accessed without this information. 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)

Second Quarter

2002

2001

Revenues

New Vehicle

$1,150,085

$947,057

Used Vehicle

403,868

290,970

Finance and Insurance

46,574

37,834

Service and Parts

199,306

153,439

Fleet

29,427

47,332

Wholesale

130,147

88,719

Total Revenues

1,959,407

1,565,351

Cost of Sales

1,680,122

1,349,779

Gross Profit

279,285

215,572

Selling, General & Administrative Expenses

221,149

170,884

Operating Income

58,136

44,688

Floor Plan Interest Expense

(8,919)

(11,154)

Other Interest Expense

(9,976)

(9,570)

Income Before Minority Interests and Income Tax Provision

39,241

23,964

Minority Interests

(509)

(284)

Income Tax Provision

(15,893)

(10,425)

Income From Continuing Operations

22,839

13,255

Income From Discontinued Operations, Net of Tax (Including Gain on Disposal of $1,190)

1,050

150

Net Income

23,889

13,405

Diluted Earnings Per Share

$0.56

$0.40

Diluted Weighted Average Shares Outstanding

42,841

33,889

EBITDA (a)

$55,249

$41,794

Same Store Retail Revenue

New Vehicles

$940,140

$908,659

Used Vehicles

270,718

277,948

Finance and Insurance

35,234

33,309

Service and Parts

155,441

146,902

Total

$1,401,533

$1,366,818

  1. EBITDA is defined as income from continuing operations before minority interests, income tax provision, other interest expense, depreciation and amortization. Depreciation was $6.0 million and $3.3 million in 2002 and 2001, respectively. Amortization was $4.9 million in 2001.

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

Second Quarter

2002

2001

Revenues

New Vehicle

$2,117,144

$1,739,460

Used Vehicle

713,042

553,564

Finance and Insurance

85,358

70,411

Service and Parts

366,218

291,350

Fleet

60,750

81,992

Wholesale

229,430

176,111

Total Revenues

3,571,942

2,912,888

Cost of Sales

3,058,935

2,509,020

Gross Profit

513,007

403,868

Selling, General & Administrative Expenses

412,024

325,834

Operating Income

100,983

78,034

Floor Plan Interest Expense

(17,404)

(23,426)

Other Interest Expense

(17,844)

(19,225)

Income Before Minority Interests and Income Tax Provision

65,735

35,383

Minority Interests

(925)

(298)

Income Tax Provision

(26,383)

(15,390)

Income From Continuing Operations

38,427

19,695

Income From Discontinued Operations, Net of Tax (Including Gain on Disposal of $1,190)

1,173

280

Net Income

39,600

19,975

Income from Continuing Operations Per Share

$0.94

$0.60

Diluted Earnings Per Share

$0.96

$0.61

Diluted Weighted Average Shares Outstanding

41,076

32,620

EBITDA (a)

$97,170

$70,545

Same Store Retail Revenue

 

New Vehicles

$1,686,132

$1,596,004

Used Vehicles

499,290

502,515

Finance and Insurance

64,562

58,835

Service and Parts

287,563

270,068

Total

$2,537,547

$2,427,422

  1. (b) EBITDA is defined as income from continuing operations before minority interests, income tax provision, other interest expense, depreciation and amortization. Depreciation was $10.6 million and $6.4 million in 2002 and 2001, respectively. Amortization was $9.6 million in 2001.

 

6/30/02

12/31/01

Assets

(unaudited)

 

Cash and Cash Equivalents

$13,699

$5,416

Accounts Receivable, Net

310,309

258,266

Inventories

890,378

641,400

Other Current Assets

31,280

258,266

Total Current Assets

1,245,666

921,516

Property and Equipment, Net

262,791

185,452

Intangible Assets, Net

911,504

784,149

Other Assets

56,942

55,459

Total Assets

$2,476,903

$1,946,576

Liabilities and Stockholders' Equity

 

 

Floor Plan Notes Payable

$817,145

$620,014

Accounts Payable and Accrued Expenses

277,836

162,062

Current Portion Long - Term Debt

12,204

4,202

Total Current Liabilities

1,107,185

786,278

Long - Term Debt (a)

586,170

551,840

Other Liabilities

97,444

92,775

Total Liabilities

1,790,799

1,430,893

Stockholders' Equity

686,104

515,683

Total Liabilities and Stockholders' Equity

$2,476,903

$1,946,576

  1. Undrawn capacity under the Company's credit facility was $436.5 million as of June 30, 2002.

UNITED AUTO GROUP, INC.
Selected Data

Second Quarter

Six Months

2002

2001

2002

2001

Units

New Retail Units

41,657

35,795

77,197

66,168

Used Retail Units

20,561

17,610

38,517

33,811

Total Retail Units

62,218

53,405

115,714

99,979

   

Retail Revenue Mix
New Vehicles

58.7%

60.5%

59.3%

59.7%

Used Vehicles

20.6%

18.6%

20.0%

19.0%

Finance and Insurance

2.4%

2.4%

2.4%

2.4%

Service and Parts

10.2%

9.8%

10.2%

10.0%

Fleet

1.5%

3.0%

1.7%

2.8%

Wholesale

6.6%

5.7%

6.4%

6.1%

Retail Gross Margin - by product
New Vehicles

8.6%

8.2%

8.6%

8.3%

Used Vehicles

10.0%

10.5%

10.5%

10.5%

Finance and Insurance

100.0%

100.0%

100.0%

100.0%

Service and Parts

47.2%

44.7%

46.6%

44.7%

Gross Profit Per Transaction
New Vehicles

$2,370

$2,177

$2,356

$2,180

Used Vehicles

1,960

1,737

1,939

1,722

Finance and Insurance

749

708

738

704

Same Store Retail Revenue Growth
New Vehicles

3.5%

10.6%

5.6%

7.2%

Used Vehicles

(2.6%)

4.3%

(0.6%)

3.2%

Finance and Insurance

5.8%

18.0%

9.7%

14.7%

Service and Parts

5.8%

6.7%

6.5%

5.7%

Debt to Total Capital Ratio

47%

53%

47%

53%

   

Media Contact:
Phillip M. Hartz
Senior VP - Corporate Communications
313-592-5365