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UnitedAuto Reports Results for Second Quarter 1999; Company Reports Net Income of $8.6 Million, or Earnings Per Fully Diluted Share of $0.35, on Revenues of $1.04 Billion; Same-store Dealership Revenues Increase 8.1% and Gross Profit Increases 10.0%, Vers
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Company Reports Net Income of $8.6 Million, or Earnings Per Fully Diluted Share of $0.35, on Revenues of $1.04 Billion

Same-store Dealership Revenues Increase 8.1% and Gross Profit Increases 10.0%, Versus the Prior Year

NEW YORK, NY, JULY 26, 1999 - UnitedAuto Group, Inc. (NYSE: UAG), the nation's second largest publicly-traded automotive retailer, today announced results for the quarter ended June 30, 1999.

Second quarter revenues increased 16.4% to $1.04 billion versus $896.4 million in the comparable prior year period. Of the $1.04 billion in second quarter dealership revenues, vehicle sales represented 86.3%, or $900.2 million of the total; finance and insurance revenues represented 4.1%, or $43.3 million of the total; and service and parts revenues of $100.1 million represented the remaining 9.6%.

Net income for the second quarter of 1999 was $8.6 million or earnings per share of $0.35 on a fully diluted basis, versus net income of $8.0 million or earnings per share of $0.40 in the comparable prior year period. Weighted average shares increased by approximately 20% to 24,422,000 in the second quarter of 1999 compared to 20,406,000 in the comparable prior year period. The increase resulted primarily from those shares newly issued to Penske Capital Partners in connection with its previously announced investment in UnitedAuto. The gross profit margin for the quarter was 12.9% compared to 12.6% in the comparable prior year period.

The Company's total retail new and used units sold increased by 11.4%. The Company sold 24,018 new and 13,517 used vehicles during the second quarter of 1999 versus 21,045 new and 12,636 used vehicles for the comparable 1998 period.

Roger S. Penske, Chairman said, "We continue to be pleased with our operational progress in the second quarter as we position the Company to initiate certain operational and strategic changes we believe will enhance UnitedAuto's profitability."

Samuel X. DiFeo, President, added, "For the second quarter, same-store total revenue showed positive results, increasing by 8.1%, and same-store gross profit increased 10.0%. This improvement was driven by a 4.0% increase in retail units sold and an 8.8% increase in service and parts revenue for the second quarter of 1998."

For the six months ended June 30, 1999, revenues were $1.95 billion as compared to $1.60 billion in the comparable prior year period.

Net income for the first half of 1999 increased 32.3% to $12.3 million, or earnings per share of $0.53 on a fully diluted basis. Net income was $9.3 million, or earnings per share of $0.46 on a fully diluted basis, for the first half of 1998 after an extraordinary charge of $1.2 million. Weighted average shares outstanding were 23,202,000 in the first half of 1999 and 20,134,000 in the comparable prior year period.

Of the $1.95 billion in dealership revenues in the first half, vehicle sales represented 86.0%, or $1.68 billion of the total; finance and insurance revenues represented 4.1% or $80.0 million of the total; and service and parts revenues of $192.8 million represented the remaining 9.9%.

The Company's total retail units sold increased by 17.2% in the first half of 1999 versus the comparable period in 1998. The Company sold 44,258 new and 26,086 used vehicles during the first half of 1999 versus 36,944 new and 23,063 used vehicles for the comparable 1998 period.

Investment from Penske Capital Partners

Penske Capital Partners and the Company are continuing with their plans to complete the previously announced transaction involving $83.0 million in new capital. UnitedAuto received the first $33.5 million installment of the investment on May 3, 1999 and, at that time, the Board of Directors named Roger S. Penske as Chairman. The $49.5 million second installment is expected to close immediately following shareholder approval on August 3, 1999.

UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships as well as from strategic acquisitions, operates 103 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 expressed 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)

                                     Second Quarter

                                     1999      1998



 Vehicle Sales                     $900,155  $779,633

 Finance and Insurance               43,335    33,619

 Service and Parts                 100,108    83,167

 Total Revenues                   1,043,598   896,419

 Cost of Sales, Including Floor    908,987   783,857
 Plan Interest

 Gross Profit                       134,611   112,562

 Selling, General and              111,484    92,466
 Administrative Expenses

 Operating Income                    23,127    20,096

 Other Interest Expense             (7,813)   (7,880)

 Other Income (a)                      602     1,495

 Income From Continuing              15,916    13,711
 Operations Before

 Minority Interests and Income
 Tax Provision

 Minority Interests                   (213)      (50)

 Income Tax Provision               (7,083)   (5,634)

 Income From Continuing               8,620     8,027
 Operations

 Income From Discontinued
 Operations, Net of Income Tax
                                         --       166
 Provision

 Net Income                          $8,620    $8,193

 Diluted Earnings Per Share From      $0.35     $0.40
 Continuing Operations

 Diluted Earnings Per Share           $0.35     $0.40

 Diluted Weighted Average Shares     24,422    20,406
 Outstanding (b)

 EBITDA (c)                         $28,408   $25,704



  a. Represents fees received under management agreements at certain
     dealerships for which acquisition is pending final manufacturer
     approval.
  b. The 1999 weighted average share calculation includes the dilutive
     effect of 3.7 million shares of common stock equivalents issued to
     Penske Capital Partners on May 3, 1999.
  c. 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)

                                     First Half

                                  1999        1998



 Vehicle Sales                 $1,675,515  $1,396,607

 Finance and Insurance             79,999      58,008

 Service and Parts                192,816     153,513

 Total Revenues                 1,948,330   1,608,128
 
 Cost of Sales, Including       1,695,464   1,406,342
 Floor Plan Interest

 Gross Profit                     252,866     201,786

 Selling, General and             215,036     171,007
 Administrative Expenses

 Operating Income                  37,830      30,779

 Other Interest Expense          (16,255)    (14,974)

 Other Income (a)                   1,396       1,848

 Income From Continuing
 Operations Before
                                   22,971      17,653
 Minority Interests, Income
 Tax Provision And

 Extraordinary Item

 Minority Interests                 (361)        (84)

 Income Tax Provision            (10,292)     (7,251)

 Income From Continuing            12,318      10,318
 Operations

 Income From Discontinued
 Operations, Net of Income
 Tax                                   --         174

 Provision

 Income Before Extraordinary       12,318      10,492
 Item

 Extraordinary Item, Net of           --      (1,235)
 Income Tax Benefit (b)

 Net Income                       $12,318      $9,257

 Diluted Earnings Per Share         $0.53       $0.52
 From Continuing Operations

 Diluted Earnings Per Share         $0.53       $0.46

 Diluted Weighted Average          23,202      20,134
 Shares Outstanding (c)

 EBITDA (d)                       $48,460     $40,179

  a. Represents fees received under management agreements at certain
     dealerships for which acquisition is pending final manufacturer
     approval.
  b. Represents the write-off of debt issuance costs related to the
     termination of the CompanyÍs 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
     Penske Capital Partners on May 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.

Media Contact:
David Bright
Director, Communications
212 230-0488