Exhibit 99.1
Contact: | Bob O’Shaughnessy | Tony Pordon | ||||||
Chief Financial Officer | Senior Vice President | |||||||
248-648-2800 | 248-648-2540 | |||||||
boshaughnessy@unitedaut | tpordon@unitedauto.com | |||||||
o.com | — |
UNITEDAUTO REPORTS FIRST QUARTER RESULTS
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Same-Store Retail Revenues Increase 11%
SG&A as a Percentage of Gross Profit Improves 53 Basis Points
Adjusted Income from Continuing Operations Increases 9% to
$28.3 Million, Excluding Debt Redemption Charge
____________________________________________________________
BLOOMFIELD HILLS, MI, May 8, 2007 – United Auto Group, Inc. (NYSE: UAG), an international automotive retailer, today reported that first quarter adjusted income from continuing operations increased 9.2% to $28.3 million and related earnings per share increased 7.1% to $0.30. The adjusted results exclude $12.3 million ($0.13 per share) of after-tax costs relating to the redemption of the Company’s 9.625% Senior Subordinated Notes. Including the debt redemption charge in the current year, the Company reported income from continuing operations of $16.1 million and related earnings per share of $0.17. First quarter adjusted net income increased 12.2% to $26.9 million and related earnings per share increased 12.0% to $0.28. Including the debt redemption charge in the current year, net income amounted to $14.6 million and related earnings per share was $0.15.
Revenues in the first quarter increased 21.6% to $3.1 billion, including a 10.8% increase in same-store retail revenues. The increase in same-store revenue included growth of 7.2%, 20.9%, 10.6% and 9.7% in new vehicle, used vehicle, finance and insurance, and service and parts revenues, respectively.
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“Our same-store retail revenue growth remained strong in each area of our business,” said UAG Chairman Roger Penske. “On a same-store basis, our U.S. and international retail revenue grew 4.0% and 27.3%, respectively. Additionally, our used vehicle business continued to be exceptionally strong in the first quarter, with revenues increasing nearly 42% over last year including the significant same-store growth.” Mr. Penske added, “While the increased level of our used vehicle business, coupled with a very competitive vehicle sales environment, contributed to an overall 57 basis-point decrease in gross margin in the current year, we are pleased to see that our selling, general and administrative expenses declined 55 basis points to 12.1% of our revenues, and declined 53 basis points to 80.3% of our gross profit.”
The Company currently projects earnings from continuing operations in the second quarter to be in the range of $0.39 to $0.43 per share. The Company continues to project earnings from continuing operations for the year in the range of $1.40 to $1.50 per share, excluding the $12.3 million ($0.13 per share) debt redemption charge. These estimates include costs associated with developing the distribution network for the smart product launch in the U.S. and are based on an estimated average of 94.6 million shares outstanding.
UnitedAuto will host a conference call discussing financial results relating to first quarter 2007 on Tuesday, May 8, 2007 at2:00 p.m. EDT. To listen to the conference call, participants must dial(800) 553-0358 [International, please dial (612) 332-0637]. The call will be simultaneously broadcast over the Internet through the UnitedAuto website atwww.unitedauto.com.
About UnitedAuto
United Auto Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 311 retail automotive franchises, representing 41 different brands, and 27 collision repair centers. UnitedAuto, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 166 franchises in 19 states and Puerto Rico and 145 franchises located outside the United States, primarily in the United Kingdom. UnitedAuto is a member of the Fortune 500 and Russell 1000 and has 16,000 employees.
Statements in this press release may involve forward-looking statements. 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 that could affect UnitedAuto’s future performance, which are contained in UnitedAuto’s Form 10-K for the year ended December 31, 2006, 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.
This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations and related earnings per share, 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.
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UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
First Quarter | ||||||||
2007 | 2006 | |||||||
Revenues: | ||||||||
New Vehicle | $ | 1,645,014 | $ | 1,432,768 | ||||
Used Vehicle | 786,910 | 555,102 | ||||||
Finance and Insurance, Net | 68,894 | 58,049 | ||||||
Service and Parts | 352,570 | 293,656 | ||||||
Fleet and Wholesale Vehicle | 249,782 | 213,211 | ||||||
Total Revenues | 3,103,170 | 2,552,786 | ||||||
Cost of Sales: | ||||||||
New Vehicle | 1,506,668 | 1,306,680 | ||||||
Used Vehicle | 725,763 | 504,955 | ||||||
Service and Parts | 156,934 | 131,916 | ||||||
Fleet and Wholesale Vehicle | 246,848 | 210,478 | ||||||
Total Cost of Sales | 2,636,213 | 2,154,029 | ||||||
Gross Profit | 466,957 | 398,757 | ||||||
SG&A Expenses | 374,971 | 322,321 | ||||||
Depreciation and Amortization | 12,803 | 10,175 | ||||||
Operating Income | 79,183 | 66,261 | ||||||
Floor Plan Interest Expense | (16,112 | ) | (13,950 | ) | ||||
Other Interest Expense | (18,859 | ) | (11,947 | ) | ||||
Equity in Earnings of Affiliates | (821 | ) | 1,150 | |||||
Debt Redemption Charge | (18,634 | ) | - - | |||||
Income from Continuing Operations Before Income Taxes and Minority Interests | 24,757 | 41,514 | ||||||
Income Taxes | (8,412 | ) | (15,122 | ) | ||||
Minority Interests | (294 | ) | (422 | ) | ||||
Income from Continuing Operations | 16,051 | 25,970 | ||||||
Loss from Discontinued Operations, Net of Tax | (1,469 | ) | (2,015 | ) | ||||
Net Income | $ | 14,582 | $ | 23,955 | ||||
Income from Continuing Operations Per Diluted Share | $ | 0.17 | $ | 0.28 | ||||
Diluted EPS | $ | 0.15 | $ | 0.25 | ||||
Diluted Weighted Average Shares Outstanding | 94,412 | 94,272 | ||||||
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UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)
3/31/07 | 12/31/06 | |||||||
Assets | ||||||||
Cash and Cash Equivalents | $ | 25,202 | $ | 13,147 | ||||
Accounts Receivable, Net | 509,348 | 469,601 | ||||||
Inventories | 1,602,193 | 1,521,424 | ||||||
Other Current Assets | 85,078 | 71,524 | ||||||
Assets Held for Sale | 181,598 | 200,083 | ||||||
Total Current Assets | 2,403,419 | 2,275,779 | ||||||
Property and Equipment, Net | 584,710 | 582,220 | ||||||
Intangibles | 1,511,697 | 1,502,067 | ||||||
Other Assets | 94,318 | 109,736 | ||||||
Total Assets | $ | 4,594,144 | $ | 4,469,802 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Floor Plan Notes Payable | $ | 1,072,369 | $ | 874,326 | ||||
Floor Plan Notes Payable – Non-Trade | 476,224 | 297,069 | ||||||
Accounts Payable | 272,727 | 301,221 | ||||||
Accrued Expenses | 214,882 | 214,406 | ||||||
Current Portion Long-Term Debt | 14,513 | 13,385 | ||||||
Liabilities Held for Sale | 103,115 | 52,703 | ||||||
Total Current Liabilities | 2,153,830 | 1,753,110 | ||||||
Long-Term Debt | 864,510 | 1,168,666 | ||||||
Other Long-Term Liabilities | 272,805 | 252,373 | ||||||
Total Liabilities | 3,291,145 | 3,174,149 | ||||||
Stockholders’ Equity | 1,302,999 | 1,295,653 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 4,594,144 | $ | 4,469,802 | ||||
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UNITED AUTO GROUP, INC.
Selected Data
First Quarter | ||||||||
2007 | 2006 | |||||||
Total Retail Units | ||||||||
New Retail | 45,516 | 42,316 | ||||||
Used Retail | 25,642 | 19,984 | ||||||
Total Retail | 71,158 | 62,300 | ||||||
Same-Store Retail Units | ||||||||
New Same-Store Retail | 42,231 | 41,471 | ||||||
Used Same-Store Retail | 21,910 | 19,375 | ||||||
Total Same-Store Retail | 64,141 | 60,846 | ||||||
Same-Store Retail Revenue | ||||||||
New Vehicles | $ | 1,500,005 | $ | 1,399,011 | ||||
Used Vehicles | 647,285 | 535,441 | ||||||
Finance and Insurance, Net | 63,011 | 56,960 | ||||||
Service and Parts | 314,810 | 286,895 | ||||||
Total Same-Store Retail | $ | 2,525,111 | $ | 2,278,307 | ||||
Same-Store Retail Revenue Growth | ||||||||
New Vehicles | 7.2 | % | 3.7 | % | ||||
Used Vehicles | 20.9 | % | 5.6 | % | ||||
Finance and Insurance, Net | 10.6 | % | 5.6 | % | ||||
Service and Parts | 9.7 | % | 8.7 | % | ||||
Revenue Mix | ||||||||
New Vehicles | 53.0 | % | 56.1 | % | ||||
Used Vehicles | 25.4 | % | 21.7 | % | ||||
Finance and Insurance, Net | 2.2 | % | 2.3 | % | ||||
Service and Parts | 11.4 | % | 11.5 | % | ||||
Fleet and Wholesale | 8.0 | % | 8.4 | % | ||||
Average Retail Selling Price | ||||||||
New Vehicles | $ | 36,141 | $ | 33,859 | ||||
Used Vehicles | $ | 30,688 | $ | 27,777 | ||||
Gross Margin | 15.1 | % | 15.6 | % | ||||
Retail Gross Margin – by Product | ||||||||
New Vehicle | 8.5 | % | 8.8 | % | ||||
Used Vehicle | 7.8 | % | 9.0 | % | ||||
Service and Parts | 55.5 | % | 55.1 | % | ||||
Gross Profit per Retail Transaction | ||||||||
New Vehicles | $ | 3,040 | $ | 2,980 | ||||
Used Vehicles | 2,385 | 2,509 | ||||||
Finance and Insurance | 968 | 932 |
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UNITED AUTO GROUP, INC.
Selected Data (Continued)
First Quarter | ||||||||
2007 | 2006 | |||||||
Brand Mix: | ||||||||
BMW | 22 | % | 16 | % | ||||
Toyota/Lexus | 19 | % | 22 | % | ||||
Honda/Acura | 14 | % | 16 | % | ||||
DCX | 12 | % | 11 | % | ||||
Ford/PAG | 11 | % | 11 | % | ||||
Audi | 8 | % | 7 | % | ||||
General Motors | 4 | % | 4 | % | ||||
Porsche | 4 | % | 5 | % | ||||
Nissan/Infiniti | 3 | % | 3 | % | ||||
Other | 3 | % | 5 | % | ||||
100 | % | 100 | % | |||||
Foreign / Premium | 94 | % | 93 | % | ||||
Domestic Big 3 | 6 | % | 7 | % | ||||
100 | % | 100 | % | |||||
Revenue Mix: | ||||||||
U.S. | 60 | % | 69 | % | ||||
International | 40 | % | 31 | % | ||||
100 | % | 100 | % | |||||
Debt to Total Capital Ratio | 40 | % | 37 | % | ||||
Rent Expense | $ | 36,905 | $ | 31,898 |
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