Contact: | Roger Penske | Jim Davidson | Tony Pordon | |||
Chairman 248-648-2400 | Executive VP – Finance 201-325-3303 | Senior Vice President 248-648-2540 | ||||
jdavidson@unitedauto.com | tpordon@unitedauto.com |
UNITEDAUTO REVENUES INCREASE 20%
____________________________________________________________
Same-store Revenues Increase 7.2%
Net Income of $0.71 per Share
Results Include $0.03 per Share of Severance Charges
___________________________________________________________
BLOOMFIELD HILLS, MI, July 19, 2005 – United Auto Group, Inc. (NYSE: UAG), a FORTUNE 500 automotive specialty retailer, today announced its 25th consecutive quarter of record revenues and a 25 basis-point improvement in gross margin to 14.8%. Total revenue increased 20% to $2.7 billion, including a 7.2% increase in same-store retail revenue. Same-store highlights include:
• | New vehicle retail revenue +8.0% |
• | Used vehicle retail revenue +3.7% |
• | Service and parts revenue +8.7% |
• | Finance and insurance revenue +14.6% |
Net income for the quarter was $33.2 million, or $0.71 per share and included $1.2 million ($0.03 per share) of after-tax severance charges as UnitedAuto rationalized its cost structure in certain markets. Second quarter 2004 net income was $33.0 million, or $0.71 per share, and included a $4.0 million ($0.09 per share) after-tax gain resulting from the sale of an investment. Excluding the impact of the severance charges and the gain from investment, adjusted net income increased 18.8% to $34.4 million from $29.0 million in the prior period.
Roger Penske, UnitedAuto Chairman, commented, “We are pleased with the revenue growth and margin expansion we realized across each of our product lines during the second quarter. We continue to achieve impressive growth in our higher margin service and parts departments due, in part, to our capital investment program. Total service and parts revenue increased 22.3% to $281 million in the quarter, helping to drive our gross margin increase.” Penske continued, “Our strong sales performance and focus on managing inventory resulted in a 55-days supply of new vehicle inventory in the U.S. compared to a 67-days supply for the U.S. auto industry.”
1
Commenting further Penske said, “The Company is currently projecting earnings per share in the third quarter in the range of $0.66 to $0.71 based on an estimated average of 47.2 million shares outstanding. For the full year, we are raising our earnings per share guidance to a range of $2.37 to $2.44 per share.”
UnitedAuto will host a conference call discussing financial results relating to second quarter 2005 on Tuesday, July 19, 2005 at1:30 p.m. ET. To listen to the conference call, participants must dial(800) 553-0349 [International, please dial (612) 332-0228]. The call will 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 143 franchises in the United States and 96 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 is contained in UnitedAuto’s Form 10-K for the year ended December 31, 2004, and its other filings with the Securities and Exchange Commission, and which is 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.
This release contains non-GAAP financial measures as defined under SEC rules, such as adjusted net income, which exclude certain items disclosed in the release. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure and the period-to-period comparability of the Company’s results from operations.
2
UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Second Quarter | ||||||||
2005 | 2004 | |||||||
New Vehicles | $ | 1,589,160 | $ | 1,316,925 | ||||
Used Vehicles | 582,894 | 503,912 | ||||||
Finance and Insurance | 61,038 | 49,738 | ||||||
Service and Parts | 280,749 | 229,594 | ||||||
Fleet | 26,288 | 22,791 | ||||||
Wholesale | 203,684 | 163,366 | ||||||
Total Revenues | 2,743,813 | 2,286,326 | ||||||
Cost of Sales | 2,338,088 | 1,953,948 | ||||||
Gross Profit | 405,725 | 332,378 | ||||||
SG&A Expenses | 318,059 | 256,968 | ||||||
Depreciation and Amortization | 10,404 | 8,542 | ||||||
Operating Income | 77,262 | 66,868 | ||||||
Floor Plan Interest Expense | (14,201 | ) | (10,511 | ) | ||||
Other Interest Expense | (12,308 | ) | (10,052 | ) | ||||
Other Income | — | 6,611 | ||||||
Income from Continuing Operations Before Minority Interests and Income Tax Provision | 50,753 | 52,916 | ||||||
Minority Interests | (621 | ) | (502 | ) | ||||
Income Tax Provision | (18,725 | ) | (20,549 | ) | ||||
Income from Continuing Operations | 31,407 | 31,865 | ||||||
Income from Discontinued Operations, Net of Tax | 1,789 | 1,138 | ||||||
Net Income | $ | 33,196 | $ | 33,003 | ||||
Income from Continuing Operations Per Diluted Share | $ | 0.67 | $ | 0.68 | ||||
Diluted EPS | $ | 0.71 | $ | 0.71 | ||||
Diluted Weighted Average Shares Outstanding | 47,041 | 46,565 | ||||||
3
UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Six Months | ||||||||
2005 | 2004 | |||||||
New Vehicles | $ | 2,991,973 | $ | 2,561,238 | ||||
Used Vehicles | 1,132,798 | 1,001,766 | ||||||
Finance and Insurance | 117,339 | 99,480 | ||||||
Service and Parts | 553,254 | 456,347 | ||||||
Fleet | 54,658 | 46,307 | ||||||
Wholesale | 385,908 | 321,050 | ||||||
Total Revenues | 5,235,930 | 4,486,188 | ||||||
Cost of Sales | 4,451,637 | 3,828,363 | ||||||
Gross Profit | 784,293 | 657,825 | ||||||
SG&A Expenses | 623,704 | 516,619 | ||||||
Depreciation and Amortization | 20,677 | 16,782 | ||||||
Operating Income | 139,912 | 124,424 | ||||||
Floor Plan Interest Expense | (27,481 | ) | (23,236 | ) | ||||
Other Interest Expense | (23,789 | ) | (20,817 | ) | ||||
Other Income | — | 6,611 | ||||||
Income from Continuing Operations Before Minority Interests and Income Tax Provision | 88,642 | 86,982 | ||||||
Minority Interests | (764 | ) | (822 | ) | ||||
Income Tax Provision | (32,707 | ) | (33,770 | ) | ||||
Income from Continuing Operations | 55,171 | 52,390 | ||||||
Income from Discontinued Operations, Net of Tax | 917 | 817 | ||||||
Net Income | $ | 56,088 | $ | 53,207 | ||||
Income from Continuing Operations Per Diluted Share | $ | 1.17 | $ | 1.18 | ||||
Diluted EPS | $ | 1.19 | $ | 1.19 | ||||
Diluted Weighted Average Shares Outstanding | 47,025 | 44,548 | ||||||
4
UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts in Thousands)
(Unaudited)
6/30/05 | 12/31/04 | |||||||
Assets | ||||||||
Cash and Cash Equivalents | $ | 11,064 | $ | 15,187 | ||||
Accounts Receivable, Net | 408,433 | 356,625 | ||||||
Inventories | 1,271,904 | 1,252,358 | ||||||
Other Current Assets | 60,169 | 44,315 | ||||||
Total Current Assets | 1,751,570 | 1,668,485 | ||||||
Property and Equipment, Net | 430,418 | 406,783 | ||||||
Intangibles | 1,224,978 | 1,221,731 | ||||||
Other Assets | 70,312 | 86,881 | ||||||
Assets of Discontinued Operations | 94,969 | 148,921 | ||||||
Total Assets | $ | 3,572,247 | $ | 3,532,801 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Floor Plan Notes Payable | $ | 1,168,460 | $ | 1,197,540 | ||||
Accounts Payable and Accrued Expenses | 461,360 | 402,232 | ||||||
Current Portion Long-Term Debt | 3,561 | 11,367 | ||||||
Total Current Liabilities | 1,633,381 | 1,611,139 | ||||||
Long-Term Debt | 604,576 | 574,970 | ||||||
Other Long-Term Liabilities | 182,363 | 179,104 | ||||||
Liabilities of Discontinued Operations | 53,459 | 92,553 | ||||||
Total Liabilities | 2,473,779 | 2,457,766 | ||||||
Stockholders’ Equity | 1,098,468 | 1,075,035 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 3,572,247 | $ | 3,532,801 | ||||
5
UNITED AUTO GROUP, INC.
Selected Data
Second Quarter | Six Months | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Units | ||||||||||||||||
New Retail Units | 48,590 | 41,745 | 91,337 | 80,924 | ||||||||||||
Used Retail Units | 22,345 | 20,814 | 44,090 | 41,588 | ||||||||||||
Total Retail Units | 70,935 | 62,559 | 135,427 | 122,512 | ||||||||||||
Same-Store Retail Revenue | ||||||||||||||||
New Vehicles | $ | 1,413,769 | $ | 1,309,234 | $ | 2,628,286 | $ | 2,531,310 | ||||||||
Used Vehicles | 517,103 | 498,843 | 1,002,638 | 987,625 | ||||||||||||
Finance and Insurance | 56,798 | 49,560 | 108,509 | 98,950 | ||||||||||||
Service and Parts | 246,834 | 227,116 | 482,606 | 448,049 | ||||||||||||
Total Same-Store Retail Revenue | $ | 2,234,504 | $ | 2,084,753 | $ | 4,222,039 | 4,065,934 | |||||||||
Same-Store Retail Revenue Growth | ||||||||||||||||
New Vehicles | 8.0 | % | 3.1 | % | 3.8 | % | 7.1 | % | ||||||||
Used Vehicles | 3.7 | % | (1.2 | %) | 1.5 | % | 3.1 | % | ||||||||
Finance and Insurance | 14.6 | % | (3.4 | %) | 9.7 | % | 1.5 | % | ||||||||
Service and Parts | 8.7 | % | 11.7 | % | 7.7 | % | 14.2 | % | ||||||||
Revenue Mix | ||||||||||||||||
New Vehicles | 57.9 | % | 57.6 | % | 57.2 | % | 57.1 | % | ||||||||
Used Vehicles | 21.3 | % | 22.0 | % | 21.6 | % | 22.3 | % | ||||||||
Finance and Insurance | 2.2 | % | 2.2 | % | 2.2 | % | 2.2 | % | ||||||||
Service and Parts | 10.2 | % | 10.0 | % | 10.6 | % | 10.2 | % | ||||||||
Fleet | 1.0 | % | 1.0 | % | 1.0 | % | 1.0 | % | ||||||||
Wholesale | 7.4 | % | 7.2 | % | 7.4 | % | 7.2 | % | ||||||||
Retail Gross Margin — by Product | ||||||||||||||||
New Vehicles | 8.7 | % | 8.5 | % | 8.7 | % | 8.6 | % | ||||||||
Used Vehicles | 9.1 | % | 8.9 | % | 9.2 | % | 8.9 | % | ||||||||
Finance and Insurance | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Service and Parts | 54.7 | % | 54.4 | % | 54.4 | % | 54.3 | % | ||||||||
Gross Profit per Transaction | ||||||||||||||||
New Vehicles | $ | 2,835 | $ | 2,695 | 2,851 | 2,714 | ||||||||||
Used Vehicles | 2,386 | 2,149 | 2,367 | 2,138 | ||||||||||||
Finance and Insurance | 860 | 795 | 866 | 812 |
6
UNITED AUTO GROUP, INC.
Selected Data (Continued)
Second Quarter | Six Months | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Brand Mix: | ||||||||||||||||
Toyota/Lexus | 21 | % | 24 | % | 21 | % | 24 | % | ||||||||
BMW | 14 | % | 16 | % | 14 | % | 16 | % | ||||||||
Honda/Acura | 14 | % | 11 | % | 14 | % | 11 | % | ||||||||
Mercedes | 10 | % | 11 | % | 10 | % | 11 | % | ||||||||
Ford Premier Group | 7 | % | 8 | % | 7 | % | 8 | % | ||||||||
Audi | 7 | % | 4 | % | 7 | % | 4 | % | ||||||||
General Motors | 8 | % | 8 | % | 7 | % | 8 | % | ||||||||
Ford | 3 | % | 3 | % | 3 | % | 3 | % | ||||||||
Nissan/Infiniti | 4 | % | 4 | % | 4 | % | 4 | % | ||||||||
Chrysler | 3 | % | 4 | % | 4 | % | 4 | % | ||||||||
Other | 9 | % | 7 | % | 9 | % | 7 | % | ||||||||
Debt to Total Capital Ratio | 36 | % | 35 | % | 36 | % | 35 | % | ||||||||
Rent Expense | $ | 29,667 | $ | 21,736 | $ | 57,725 | $ | 43,527 |
7