Contact: | Roger Penske | Jim Davidson | Tony Pordon | |||
Chairman 248-648-2400 | Executive VP – Finance 201-325-3303 | Vice President – Investor Relations 248-648-2540 | ||||
jdavidson@unitedauto.com | tpordon@unitedauto.com |
UNITEDAUTO NET INCOME INCREASES 30%
Revenues Increase 19%; Same-Store Retail Revenue Grows 8%
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Earnings Per Share Rises 17% to $0.56 Per Share
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BLOOMFIELD HILLS, MI, February 9, 2005 – United Auto Group, Inc. (NYSE: UAG), a FORTUNE 500 automotive specialty retailer, today announced a 30.1% rise in fourth quarter net income and its 23rd consecutive quarter of record results. Fourth quarter results reflect an overall 19.2% increase in revenue, including continued strong same-store retail revenue growth of 7.6%. The same-store growth was highlighted by an 11.8% increase in service and parts revenue, driven by increases in units in operation and capacity increases at many locations. Same-store new and used vehicle retail revenue increased 5.8% and 7.8%, respectively, due primarily to increases at the Company’s foreign and luxury franchises. Same-store finance and insurance revenue increased 34.1%, including an 11.7% increase in the sale of traditional finance and insurance products complemented by $9.2 million of revenue earned under a multi-year arrangement to promote satellite radios. Total revenue for the quarter increased to $2.5 billion and net income increased to $26.1 million, or $0.56 per share, from $20.1 million, or $0.48 per share, in the prior year. Earnings per share reflect an 11.0% increase in weighted average shares outstanding.
For the year ended December 31, 2004, revenues increased 17.8% to $9.9 billion. Net income for the year increased 34.7% to $111.7 million, or $2.45 per share, from $82.9 million, or $2.00 per share, in the prior year. Full-year 2004 results include the $7.2 million after-tax gain ($0.16 per share) from the sale of an investment recorded in the second and third quarters. Excluding this gain, net income and earnings per share were $104.5 million and $2.29, respectively. Full-year results also include the $5.3 million after-tax gain ($0.11 per share) from a refund of UK consumption taxes and the $4.9 million of offsetting after-tax non-cash charges recorded in the third quarter ($0.11 per share). Prior year results include the effect of $5.0 million of after-tax non-recurring charges ($0.12 per share).
Commenting on the Company’s results, Chairman Roger Penske said, “We are delighted with the performance of our business in 2004. While the overall market remained challenging, our business achieved same-store retail revenue growth of 6.1%, including 7.6% in the fourth quarter. We are pleased that all four lines of our business showed strong same-store growth, including 12.1% growth in our high-margin service and parts operations as our investment in additional capacity continues to reap benefits. I am also particularly pleased with the strong results from our international operations, which generated 26.6% of our 2004 revenues, and enjoyed 22.4% same-store retail revenue growth during the year.”
Commenting further Penske said, “In 2005, we expect the overall retail market to remain competitive. With our strong brand mix and service capacity expansion program, we currently estimate same-store growth to be approximately 3% to 5% in 2005. We also expect to continue our selective acquisition program adding approximately $300 to $500 million in annualized revenues. These increases will be somewhat offset by the effect of rising interest rates on our business.” Based on these estimates, the Company is currently projecting earnings per share in the range of $2.32 to $2.39 for 2005. Earnings per share in the first quarter are expected to be in the range of $0.44 to $0.48. These estimates are based on an estimated average of 47.0 million shares outstanding.
UnitedAuto will host a conference call discussing financial results relating to fourth quarter 2004 on Wednesday, February 9, 2005 at1:30 p.m. ET. To listen to the conference call, participants must dial(800) 553-5260 [International, please dial (612) 332-0802]. The call will also be simultaneously broadcast live over the Internet through the UnitedAuto website atwww.unitedauto.com.
About UnitedAuto
UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 152 franchises in the United States and 101 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. Statements in this press release involve forward-looking statements, including forward-looking statements regarding UnitedAuto’s future sales and earnings growth potential. Actual results may vary materially because of risks and uncertainties, including 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 Form 10-K for the year ended December 31, 2003 and its other filings with the Securities and Exchange Commission, and which are incorporated into this press release by reference. This press release speaks only as of its date and UnitedAuto disclaims any duty to update the information herein.
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UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Fourth Quarter | ||||||||
2004 | 2003 | |||||||
New Vehicles | $ | 1,442,993 | $ | 1,239,383 | ||||
Used Vehicles | 515,214 | 432,751 | ||||||
Finance and Insurance | 66,875 | 46,873 | ||||||
Service and Parts | 266,765 | 216,133 | ||||||
Fleet | 26,215 | 16,364 | ||||||
Wholesale | 176,012 | 141,702 | ||||||
Total Revenues | 2,494,074 | 2,093,206 | ||||||
Cost of Sales | 2,112,477 | 1,787,535 | ||||||
Gross Profit | 381,597 | 305,671 | ||||||
SG&A Expenses | 303,811 | 240,063 | ||||||
Depreciation and Amortization | 9,927 | 8,392 | ||||||
Operating Income | 67,859 | 57,216 | ||||||
Floor Plan Interest Expense | (13,184 | ) | (11,704 | ) | ||||
Other Interest Expense | (11,686 | ) | (10,629 | ) | ||||
Income from Continuing Operations Before Minority Interests and Income Tax Provision | 42,989 | 34,883 | ||||||
Minority Interests | (556 | ) | (589 | ) | ||||
Income Tax Provision | (15,993 | ) | (13,779 | ) | ||||
Income from Continuing Operations | 26,440 | 20,515 | ||||||
Loss from Discontinued Operations, Net of Tax | (325 | ) | (438 | ) | ||||
Net Income | $ | 26,115 | $ | 20,077 | ||||
Income from Continuing Operations Per Diluted Share | $ | 0.57 | $ | 0.49 | ||||
Diluted EPS | $ | 0.56 | $ | 0.48 | ||||
Diluted Weighted Average Shares Outstanding | 46,689 | 42,059 | ||||||
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UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Twelve Months | ||||||||
2004 | 2003 | |||||||
New Vehicles | $ | 5,683,368 | $ | 4,947,931 | ||||
Used Vehicles | 2,127,497 | 1,808,507 | ||||||
Finance and Insurance | 231,830 | 202,307 | ||||||
Service and Parts | 1,008,519 | 815,039 | ||||||
Fleet | 127,993 | 99,998 | ||||||
Wholesale | 707,004 | 515,403 | ||||||
Total Revenues | 9,886,211 | 8,389,185 | ||||||
Cost of Sales | 8,436,153 | 7,171,332 | ||||||
Gross Profit | 1,450,058 | 1,217,853 | ||||||
SG&A Expenses | 1,144,207 | 955,021 | ||||||
Depreciation and Amortization | 42,146 | 30,689 | ||||||
Operating Income | 263,705 | 232,143 | ||||||
Floor Plan Interest Expense | (49,723 | ) | (42,697 | ) | ||||
Other Interest Expense | (42,973 | ) | (42,835 | ) | ||||
Other Income | 11,469 | — | ||||||
Income from Continuing Operations Before Minority Interests and Income Tax Provision | 182,478 | 146,611 | ||||||
Minority Interests | (2,047 | ) | (2,272 | ) | ||||
Income Tax Provision | (67,880 | ) | (57,916 | ) | ||||
Income from Continuing Operations | 112,551 | 86,423 | ||||||
Loss from Discontinued Operations, Net of Tax | (864 | ) | (436 | ) | ||||
Income Before Cumulative Effect of Accounting Change | 111,687 | 85,987 | ||||||
Cumulative Effect of Accounting Change | — | (3,058 | ) | |||||
Net Income | $ | 111,687 | $ | 82,929 | ||||
Income from Continuing Operations Per Diluted Share | $ | 2.47 | $ | 2.09 | ||||
Diluted EPS before Cumulative Effect of Accounting Change | $ | 2.45 | $ | 2.08 | ||||
Cumulative Effect of Accounting Change on Diluted EPS | — | ($0.07 | ) | |||||
Diluted EPS | $ | 2.45 | $ | 2.00 | ||||
Diluted Weighted Average Shares Outstanding | 45,613 | 41,434 | ||||||
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UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts in Thousands)
(Unaudited)
12/31/04 | 12/31/03 | |||||||
Assets | ||||||||
Cash and Cash Equivalents | $ | 11,061 | $ | 13,076 | ||||
Accounts Receivable, Net | 382,098 | 346,367 | ||||||
Inventories | 1,326,553 | 1,157,878 | ||||||
Other Current Assets | 44,424 | 42,963 | ||||||
Total Current Assets | 1,764,136 | 1,560,284 | ||||||
Property and Equipment, Net | 414,718 | 366,070 | ||||||
Intangibles | 1,247,210 | 1,083,166 | ||||||
Other Assets | 87,117 | 89,007 | ||||||
Assets of Discontinued Operations | 19,620 | 45,671 | ||||||
Total Assets | $ | 3,532,801 | $ | 3,144,198 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Floor Plan Notes Payable | $ | 1,266,656 | $ | 1,114,766 | ||||
Accounts Payable and Accrued Expenses | 413,685 | 352,480 | ||||||
Current Portion Long-Term Debt | 11,367 | 8,540 | ||||||
Total Current Liabilities | 1,691,708 | 1,475,786 | ||||||
Long-Term Debt | 574,970 | 643,145 | ||||||
Other Long-Term Liabilities | 179,116 | 167,540 | ||||||
Liabilities of Discontinued Operations | 11,972 | 29,315 | ||||||
Total Liabilities | 2,457,766 | 2,315,786 | ||||||
Stockholders’ Equity | 1,075,035 | 828,412 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 3,532,801 | $ | 3,144,198 | ||||
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UNITED AUTO GROUP, INC.
Selected Data
Fourth Quarter | Twelve Months | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Units | ||||||||||||||||
New Retail Units | 43,612 | 38,880 | 178,012 | 165,023 | ||||||||||||
Used Retail Units | 20,901 | 19,662 | 88,700 | 84,910 | ||||||||||||
Total Retail Units | 64,513 | 58,542 | 266,712 | 249,933 | ||||||||||||
Same-Store Retail Revenue | ||||||||||||||||
New Vehicles | $ | 1,296,659 | $ | 1,225,376 | $ | 4,975,561 | $ | 4,706,066 | ||||||||
Used Vehicles | 458,463 | 425,416 | 1,747,483 | 1,679,721 | ||||||||||||
Finance and Insurance | 62,397 | 46,518 | 209,777 | 194,409 | ||||||||||||
Service and Parts | 237,246 | 212,263 | 862,902 | 769,561 | ||||||||||||
Total Same-Store Retail Revenue | $ | 2,054,765 | $ | 1,909,573 | $ | 7,795,723 | $ | 7,349,757 | ||||||||
Same-Store Retail Revenue Growth | ||||||||||||||||
New Vehicles | 5.8 | % | 8.0 | % | 5.7 | % | 6.6 | % | ||||||||
Used Vehicles | 7.8 | % | 5.4 | % | 4.0 | % | 7.8 | % | ||||||||
Finance and Insurance | 34.1 | % | 6.6 | % | 7.9 | % | 12.7 | % | ||||||||
Service and Parts | 11.8 | % | 10.0 | % | 12.1 | % | 8.8 | % | ||||||||
Revenue Mix | ||||||||||||||||
New Vehicles | 57.9 | % | 59.2 | % | 57.5 | % | 59.0 | % | ||||||||
Used Vehicles | 20.7 | % | 20.7 | % | 21.5 | % | 21.6 | % | ||||||||
Finance and Insurance | 2.7 | % | 2.2 | % | 2.3 | % | 2.4 | % | ||||||||
Service and Parts | 10.7 | % | 10.3 | % | 10.2 | % | 9.7 | % | ||||||||
Fleet | 1.0 | % | 0.8 | % | 1.3 | % | 1.2 | % | ||||||||
Wholesale | 7.0 | % | 6.8 | % | 7.2 | % | 6.1 | % | ||||||||
Retail Gross Margin — by Product | ||||||||||||||||
New Vehicles | 8.8 | % | 8.6 | % | 8.6 | % | 8.4 | % | ||||||||
Used Vehicles | 8.6 | % | 8.5 | % | 8.8 | % | 9.1 | % | ||||||||
Finance and Insurance | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Service and Parts | 54.4 | % | 53.7 | % | 53.9 | % | 53.4 | % | ||||||||
Gross Profit per Transaction | ||||||||||||||||
New Vehicles | $ | 2,897 | $ | 2,732 | $ | 2,734 | $ | 2,517 | ||||||||
Used Vehicles | 2,109 | 1,863 | 2,113 | 1,932 | ||||||||||||
Finance and Insurance | 1,037 | 801 | 870 | 809 |
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UNITED AUTO GROUP, INC.
Selected Data (Continued)
Fourth Quarter | Twelve Months | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Brand Mix: | ||||||||||||||||
Toyota/Lexus | 21 | % | 23 | % | 22 | % | 22 | % | ||||||||
BMW | 14 | % | 15 | % | 15 | % | 14 | % | ||||||||
Honda/Acura | 13 | % | 10 | % | 11 | % | 12 | % | ||||||||
Mercedes | 10 | % | 11 | % | 10 | % | 10 | % | ||||||||
General Motors | 8 | % | 9 | % | 8 | % | 10 | % | ||||||||
Ford Premier Group | 8 | % | 8 | % | 8 | % | 8 | % | ||||||||
Audi | 6 | % | 4 | % | 4 | % | 3 | % | ||||||||
Chrysler | 4 | % | 6 | % | 5 | % | 6 | % | ||||||||
Nissan/Infiniti | 4 | % | 4 | % | 4 | % | 4 | % | ||||||||
Ford | 3 | % | 4 | % | 4 | % | 4 | % | ||||||||
Other | 9 | % | 6 | % | 9 | % | 7 | % | ||||||||
Debt to Total Capital Ratio | 35 | % | 44 | % | 35 | % | 44 | % | ||||||||
Adjusted EBITDA(a) | $ | 64,602 | $ | 53,904 | $ | 267,597 | $ | 220,135 | ||||||||
Rent Expense | $ | 27,083 | $ | 21,501 | $ | 100,697 | $ | 81,747 |
(a) | Adjusted EBITDA is defined as income from continuing operations before minority interests, income tax provision, other interest expense, depreciation and amortization. While Adjusted EBITDA should not be construed as a substitute for income from continuing operations or as a better measure of liquidity than cash flows from operating activities, each of which is determined in accordance with U.S. GAAP, it is included in this press release to provide additional information regarding the amount of cash our business is generating. This measure may not be comparable to similarly titled measures reported by other companies. Following is a reconciliation of income from continuing operations before minority interests and income tax provision and Adjusted EBITDA: |
Fourth Quarter | Twelve Months | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Income from continuing operations before minority interests and income tax provision | $ | 43.0 | $ | 34.9 | $ | 182.5 | $ | 146.6 | ||||||||
Other interest expense | 11.7 | 10.6 | 43.0 | 42.8 | ||||||||||||
Depreciation and amortization | 9.9 | 8.4 | 42.1 | 30.7 | ||||||||||||
Adjusted EBITDA | $ | 64.6 | $ | 53.9 | $ | 267.6 | $ | 220.1 | ||||||||
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