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Company Reports Income from Continuing Operations of $3.7 Million, or Earnings Per Diluted Share of $0.16, on Revenues of $904.7 Million; Same-store Dealership Retail Gross Profit Increases 13.3% Versus the Prior Year
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Company Reports Income from Continuing Operations of $3.7 Million, or Earnings Per Diluted Share of $0.16, on Revenues of $904.7 Million

Same-store Dealership Retail Gross Profit Increases 13.3% Versus the Prior Year

NEW YORK, NY, APRIL 22, 1999 - UnitedAuto Group, Inc. (NYSE: UAG), the nation's second largest publicly traded automotive retailer, today announced results for the quarter ended March 31, 1999.

First quarter revenues increased 27.1% to $904.7 million versus $711.7 million in the comparable prior year period. Of the $904.7 million in first quarter dealership revenues, vehicle sales represented approximately 85.7%, or $775.3 million of the total; finance and insurance revenues represented approximately 4.1%, or $36.7 million of the total; and service and parts revenues of $92.7 million represented the remaining 10.2%.

Gross profit margin for the quarter was 13.1% compared to 12.5% in the comparable prior year period.

The Company sold 20,240 new and 12,569 used vehicles during the first quarter of 1999 versus 15,899 new and 10,427 used vehicles for the comparable 1998 period.

Samuel X. DiFeo, President and Chief Operating Officer, said, "We are pleased with our operational progress in the first quarter. For the first quarter, same-store dealership gross profit, which includes retail sales and service gross, increased 13.3 % versus the prior year for dealerships owned for the entire first quarter of 1998. Same-store total retail revenue, which increased by 10.7% for the same period, showed similar positive momentum."

Diluted weighted average shares outstanding were 23,307,000 for the first quarter of 1999 compared to 19,924,000 in 1998. The 1999 weighted average share calculation includes the dilutive effect of 1,156,689 shares issued in February 1999 under the minimum share price guarantee relating to the 1,040,039 shares of common stock issued in connection with the acquisition of the Young Automotive Group during 1998. The shares issued in February 1999 were in settlement of the stock price guarantee obligation with respect to 444,987 shares of common stock. The Company noted that under the terms of the Young agreement, it has the option to complete the transaction with either cash or common stock. The 1999 weighted average also includes 1,398,219 shares of common stock (as if the settlement were in common stock) estimated to be issued in June 1999 in settlement of the stock price guarantee obligation on the remaining 595,052 shares of common stock. The estimated dilutive effect of the June 1999 settlement was based upon the Company's common stock price of $7.75 at March 31, 1999. Should the Company elect to settle the June obligation in stock, the dilutive effect on earnings per share will be based upon the actual market value of the Company's common stock at the time of settlement.

As a result of pre-tax charges totaling $33.3 million recorded in the fourth quarter of 1998 and the more stringent first quarter 1999 net worth covenant, the Company is no longer in compliance with the net worth covenant in its bank credit agreement as of March 31, 1999. The Company has obtained a waiver of this convenant through May 18, 1999 and has commenced discussions with its lenders to amend the net worth convenant to reflect the Company's present and expected future business operations.

Although there can be no assurance that the Company will be able to obtain the necessary amendment, based upon preliminary discussions with its lenders, the Company believes that it will be able to negotiate the required convenant revisions. The failure to obtain such amendment could have a material adverse effect on the Company's financial condition.

Investment from Penske Capital Partners

The Company said that it had initiated regulatory approvals relating to the definitive agreement announced on April 12, 1999 to secure $83.0 million in new capital funding from Penske Capital Partners L.L.C. UnitedAuto will receive the first installment of approximately $33.5 million upon the receipt of such approvals and certain third party consents, at which time Roger S. Penske will succeed Marshall S. Cogan, the Company's founder, as Chairman and Chief Executive Officer. The second installment of approximately $49.5 million will be received at the final closing of the transaction and is subject to a number of conditions, including approval by a majority of UnitedAuto's shareholders and the receipt of third party consents.

UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships as well as from strategic acquisitions, operates franchises representing 30 brands in Arizona, Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Louisiana, Nevada, New Jersey, New York, North Carolina, Puerto Rico, South Carolina, Tennessee and Texas. UnitedAuto dealerships sell new and used vehicles and market a complete line of aftermarket automotive products and services through UnitedAuto Care, Inc. and UnitedAuto Care Products, Inc.

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 the 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)
                                 
                                          First  Quarter
                                         1999       1998
                                                           
Vehicle Sales                           $775,360   $616,974

Finance and Insurance                     36,664     24,389

Service and Parts                         92,708     70,346

     Total Revenues                      904,732    711,709
     
Cost of Sales, Including Floor Plan                        
Interest                                 786,477    622,485

     Gross Profit                        118,255     89,224
     
Selling, General and Administrative                        
Expenses                                 103,552     78,541

     Operating Income                     14,703     10,683
     
Other Interest Expense                   (8,442)    (7,094)

Other Income  (a)                            794        353

Income From Continuing Operations                          
Before Minority Interests, Income Tax        
Provision And Extraordinary  Item          7,055      3,942
     
Minority Interests                         (148)       (34)

Income Tax Provision                     (3,209)    (1,617)

Income From Continuing Operations          3,698      2,291

Income From Discontinued Operations,                       
Net of Income Tax Provision                   --          8
     
Income Before Extraordinary Item           3,698      2,299

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

Net Income                                $3,698     $1,064
                                          
Diluted Earnings Per Share From                            
Continuing Operations                      $0.16      $0.12
                                
Diluted Earnings Per Share                 $0.16      $0.05

Diluted Weighted Average Shares                            
Outstanding                               23,307     19,924
                                                
EBITDA (c)                               $20,052    $14,475


(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 Company's then existing credit facility in the
  first quarter of 1998.
(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.