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Press Release

UnitedAuto Reports Record Results; Revenue Increased 19.9% to $1.6 Billion; Net Income Increased 20.7% to $13.5 Million ($0.38 Per Share); Same Store Retail Revenue and Gross Profit Increased 5.4% and 8.7%, Respectively

DETROIT, MI, October 24, 2001 - United Auto Group, Inc. (NYSE: UAG), a FORTUNE 500 automotive specialty retailer, announced record results for the third quarter 2001. Third quarter revenues increased 19.9% to $1.6 billion from $1.3 billion in 2000, and net income increased 20.7% to $13.5 million. Earnings per share were $0.38 compared to $0.40 in the third quarter 2000. Earnings per share reflect a 26.1% increase in weighted average shares outstanding from 28,080,000 to 35,418,000 in 2001.

During the quarter, the Company retailed 36,835 and 17,728 new and used retail units, representing increases of 15.1% and 11.9%, respectively, versus the third quarter 2000. Gross profit increased 21.1% to $221.1 million and, most importantly, revenues from high margin service and parts operations increased 22.4% to $159.4 million.

For the nine months ended September 30, 2001, revenue increased 26.3% to $4.6 billion versus $3.6 billion in 2000, and net income increased 39.9% to $33.5 million. Nine months 2000 net earnings included an extraordinary item resulting from the retirement of debt in the second quarter of 2000. Earnings per share were $1.00, up 22.0% over the $0.82 reported in 2000. Earnings per share reflect a 14.4% increase in weighted average shares outstanding from 29,325,000 to 33,550,000 in 2001.

Roger Penske, Chairman, said, "This was a record quarter for UnitedAuto. Despite the effects of the tragic events that occurred on September 11th, which initially decreased dealership traffic, we have seen our level of business increase. Our business remains strong, as evidenced by increases in same store revenue and retail units sales. I am particularly pleased to see the Company's third quarter 2001 same store results reflect: a 4.4% increase in new retail vehicle revenues; a 4.6% increase in used retail vehicle revenues; a 22.1% increase in finance and insurance revenues; and a 7.5% increase in service and parts revenues, over the comparable prior year period. In light of our continued strong operational performance and an increase in our working capital and acquisition credit facility to nearly $1.0 billion, we believe our business is positioned for future growth."

Sam DiFeo Jr., President, added, "I am delighted with our results for the third quarter. We are realizing the benefits from our favorable brand mix and our efforts to increase service and parts operations. Our ability to increase sales while maintaining customer satisfaction levels, coupled with our efforts to reduce inventory levels, will continue to help us achieve future success. "

Based upon the strong nine months results, the Company believes earnings per share will be at least $1.25 for the year ending December 31, 2001. For 2002, the Company is currently estimating that same store revenues will increase between 3% and 5%. In addition, the Company currently estimates that earnings per share will be at least $1.45, before the impact of the new accounting standard affecting the amortization of goodwill.

UnitedAuto, which pursues a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 126 franchises in 19 states, Puerto Rico and Brazil. 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 third quarter 2001 on Wednesday, October 24, 2001 at 11 A.M. Eastern time. Advance registration is not required. Participants must call (888)-396-9923 (International, please call (712)-271-3627). 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 UAG3Q. 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 effect 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 Operations (Unaudited)
(Amounts In Thousands, Except Per Share Data)

Second Quarter

2001

2000

New Vehicle Sales (a)

$1,010,329

$727,072

Used Vehicle Sales (b)

384,207

312,306

Finance and Insurance

64,636

47,969

Service and Parts

156,011

116,802

Total Revenues

1,615,183

1,204,149

Cost of Sales

1,396,187

1,037,369

Gross Profit (c)

218,996

166,780

Selling, General & Administrative Expenses

173,844

128,912

Operating Income

45,152

37,868

Floor Plan Interest Expense

(11,347)

(10,539)

Other Interest Expense

(9,576)

(7,430)

Income Before Minority Interests, Income Tax Provision and Extraordinary Item

24,229

19,899

Minority Interests

(284)

(82)

Income Tax Provision

(10,540)

(8,753)

Income Before Extraordinary Item

13,405

11,064

Extraordinary Item

--

(3,969)

Net Income

$13,405

$7,095

Diluted Earnings Per Share Before Extraordinary Item

$0.40

$0.38

Diluted Earnings Per Share

$0.40

$0.24

Diluted Weighted Average Shares Outstanding

33,889

29,400

EBITDA (d)

$42,065

$33,033

Same Store Operating Data

New Vehicle Retail Sales $1,234,673 $1,151,772
Used Vehicle Retail Sales 421,655 408,528
Finance and Insurance 79,987 69,714
Service and Parts 209,998 198,750

a. Includes fleet sales of $88.1 million and $74.9 million in 2001 and 2000, respectively.
b. Includes used wholesale sales of $178.3 million and $154.0 million in 2001 and 2000, respectively.
c. Gross profit as a percentage of revenues for new vehicle retail, used vehicle retail, finance and insurance and service and parts revenues was 8.3%, 10.5%, 58.9%, and 44.7%, respectively, compared with 8.8%, 10.8%, 58.8% and 43.5% in the comparable prior year period.
d. EBITDA is defined as income before minority interests, income tax provision, extraordinary item, other interest expense, depreciation and amortization. Depreciation and amortization amounted to $15.9 million and $11.1 million in 2001 and 2000, respectively.

 

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

6/30/01

6/30/00

12/31/00

Assets

Cash and Cash Equivalents

$1,557

$20,005

$7,413

Accounts Receivable, Net

248,443

165,061

190,792

Inventories

750,530

595,071

737,942

Other Current Assets

19,888

11,435

15,469

Total Current Assets

1,020,418

791,572

951,616

Property and Equipment, Net

145,883

90,107

107,085

Intangible Assets, Net

741,400

540,044

664,510

Other Assets

38,494

32,738

39,484

Total Assets

$1,946,195

$1,454,461

$1,762,695

Liabilities and Stockholders' Equity

Floor Plan Notes Payable

$691,021

$544,811

$689,687

Accounts Payable and Accrued Expenses

132,625

94,962

127,419

Current Portion Long - Term Debt

35,027

13,498

41,456

Total Current Liabilities

858,673

653,271

858,562

Long - Term Debt (a)

524,759

335,075

377,721

Other Liabilities

74,422

45,710

64,742

Total Liabilities

1,457,854

1,034,056

1,301,025

Stockholders' Equity (b)

488,341

420,405

461,670

Total Liabilities and Stockholders' Equity

$1,946,195

$1,454,461

$1,762,695

a. Availability under the Company's credit facility amounts to $160.0 million as of June 30, 2001
b. Includes an $8.0 million decrease at June 30, 2001 due to the impact of Statement of Financial

Accounting Standards No. 133 - Accounting For Derivative Instruments and Hedging Activities