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Press Release

UnitedAuto reports a 139% increase in net income and a 90% increase in earnings per share

Revenues Increased 19% to $1.6 Billion

Same Store Retail Revenues Increased 6.4%

Twelfth Consecutive Quarter of Same Store Revenue Growth

DETROIT, MI, May 1, 2002 , United Auto Group, Inc. (NYSE: UAG), a FORTUNE 500 automotive specialty retailer, today announced record results for first quarter 2002. First quarter revenues increased 19% to $1.6 billion and net income increased 139% to $15.7 million. Earnings per share were $0.40, an increase of 90% over the $0.21 reported in first quarter 2001. Earnings per share reflect a 23% increase in weighted average shares outstanding. Excluding the effect of goodwill amortization, net income and earnings per share in first quarter 2001 would have been $9.2 million and $0.29, respectively. On a comparable accounting basis, net income and earnings per share increased 71% and 38%, respectively, over the prior year.

During the quarter, the Company received $125 million from the sale of 3.0 million shares of common stock to the public and the exercise of warrants to purchase common stock by Penske Capital Partners. The Company also issued $300.0 million of Senior Subordinated Notes due 2012, which bear interest at 9.625%. Proceeds from the stock and debt offerings were used to repay borrowings under the Company's credit agreement.

Roger Penske, Chairman, said, "The first quarter of 2002 marked several significant achievements for our Company. Our brand mix was strengthened with our March acquisition of the Sytner Group, a prestige United Kingdom automotive retailer. The combined equity and debt transactions, which raised $425.0 million, significantly strengthen our balance sheet and will allow us to aggressively pursue our business strategy. Our record earnings and twelfth consecutive quarter of same store revenue growth validate this business model. Based upon our performance, we are raising our full year guidance to $1.80 - $1.86 per share, the balance of which is expected to be earned as follows: Q2: $0.51 - $0.53; Q3: $0.52 - $0.54 and Q4: $0.37 - $0.39."

Sam DiFeo Jr., President, added, "Although the U.S. market is experiencing a modest decline in new and used unit sales, our business remains strong due to our brand mix and geographical diversity. Our 6.4% increase in same store retail sales was accompanied by a 9.8% increase in same store retail gross profit."

UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 123 franchises in the United States and 66 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 2002 on Wednesday, May 1, 2002 at 3P.M. Eastern time. Advance registration is not required. Participants must call (877) 709-5341 (International, please call (773) 756-4618). 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 UAG1Q. 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)

First Quarter

2002

2001

Revenues

New Vehicle Sales (a)

$977,771

$805,853

Used Vehicle Sales (b)

312,039

265,980

Finance and Insurance

39,068

33,017

Service and Parts

169,419

140,622

Fleet

34,325

37,526

Wholesale

100,486

88,617

Total Revenues

1,633,108

1,371,615

Cost of Sales

1,396,101

1,179,825

Gross Profit (c)

237,007

191,790

Selling, General & Administrative Expenses

193,820

157,894

Operating Income

43,187

33,896

Floor Plan Interest Expense

8,614

12,578

Other Interest Expense

7,872

9,668

Income Before Minority Interests and Income Tax Provision

26,701

11,650

Minority Interests

(416)

(14)

Income Tax Provision

(10,574)

(5,066)

Net Income

$15,711

$6,570

Diluted Earnings Per Share

$0.40

$0.21

Diluted Weighted Average Shares Outstanding

39,196

31,843

EBITDA (a)

$39,126

$28,995


Same Store Retail Revenue

New Vehicle

$799,110

$744,466

Used Vehicle

248,564

242,941

Finance and Insurance

30,825

27,436

Service and Parts

140,785

130,711

Total

$1,219,284

$1,145,554

  1. EBITDA is defined as income before minority interests, income tax provision, other interest expense, depreciation and amortization. Depreciation was $4.6 million and $3.0 million in 2002 and 2001, respectively. Amortization was $4.6 million in 2001.

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

3/31/02

12/31/01

Assets

(unaudited)

 

Cash and Cash Equivalents

$2,620

$5,416

Accounts Receivable, Net

289,795

258,266

Inventories

832,526

641,400

Other Current Assets

27,956

16,434

Total Current Assets

1,152,897

921,516

Property and Equipment, Net

215,986

185,452

Intangible Assets, Net

905,545

784,149

Other Assets

59,509

55,459

Total Assets

$2,333,937

$1,946,576

Liabilities and Stockholders' Equity

Floor Plan Notes Payable

$758,172

$620,014

Accounts Payable and Accrued Expenses

237,148

162,062

Current Portion Long - Term Debt

12,528

4,202

Total Current Liabilities

1,007,848

786,278

Long - Term Debt (a)

572,693

551,840

Other Liabilities

94,208

92,775

Total Liabilities

1,674,749

1,430,893

Stockholders' Equity

659,188

515,683

Total Liabilities and Stockholders' Equity

$2,333,937

$1,946,576

  1. Undrawn capacity under the Company's credit facility was $452.5 million as of March 31, 2002.

UNITED AUTO GROUP, INC.
Selected Data

First Quarter

2002

2001

Units

New Retail Units

36,007

31,035

Used Retail Units

18,169

16,486

Total Retail Units

54,176

47,521

Retail Revenue Mix

New Vehicles

59.9%

58.8%

Used Vehicles

19.1%

19.4%

Finance and Insurance

2.4%

2.4%

Service and Parts

10.4%

10.3%

Fleet

2.1%

2.7%

Wholesale

6.1%

6.4%

Retail Gross Margin - by Product

New Vehicles

8.6%

8.4%

Used Vehicles

11.1%

10.5%

Finance and Insurance

100.0%

100.0%

Service and Parts

46.0%

44.8%

Gross Profit per Transaction

New Vehicles

$2,340

$2,176

Used Vehicles

1,914

1,699

Finance and Insurance

721

695

Same Store Retail Revenue Growth

New Vehicles

7.3%

2.7%

Used Vehicles

2.3%

2.7%

Finance and Insurance

12.4%

12.4%

Service and Parts

7.7%

6.2%

Debt to Total Capital Ratio

47%

53%