UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to ___________________
Commission File Number 333-06585
CROSS-CONTINENT AUTO RETAILERS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2653095
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1201 S. Taylor
Amarillo, Texas 79101
(Address of principal executive offices) (Zip Code)
(806) 374-8653
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X . No .
Number of shares outstanding of each of the issuer's classes of common stock,
as of May 14, 1997.
Class Shares Outstanding
- -------------------------- -------------------------
$.01 Par Value 14,079,020
CROSS-CONTINENT AUTO RETAILERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands - Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
----------------------------
1997 1996
-------- -------
Revenues:
Vehicle sales $ 77,554 $ 64,009
Other operating revenue 11,468 7,220
-------- -------
Total Revenues 89,022 71,229
Cost of sales 73,839 59,896
-------- -------
Gross Profit 15,183 11,333
-------- -------
Operating Expenses:
Selling, general and administrative 10,901 7,537
Depreciation and amortization 381 270
-------- -------
11,282 7,807
-------- -------
Operating income 3,901 3,526
Other income (expense)
Interest income 736 219
Interest expense (1,211) (1,194)
-------- -------
Income before income taxes 3,426 2,551
Income tax provision 1,280 952
-------- -------
Net Income $ 2,146 $ 1,599
-------- -------
-------- -------
Net income per average common share $ .16
--------
--------
Weighted average common shares outstanding 13,800
--------
--------
The accompanying notes are an integral part of these financial statements.
2
CROSS-CONTINENT AUTO RETAILERS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
ASSETS
March 31, 1997 December 31, 1996
-------------- -----------------
(Unaudited)
Current assets
Cash and cash equivalents $ 33,431 $ 36,946
Accounts receivable 15,122 18,629
Inventories 45,800 48,168
----------- -----------
Total current assets 94,353 103,743
Property and equipment, at cost, less
accumulated depreciation 13,854 13,391
Goodwill, net 22,002 22,094
Other assets 4,144 3,218
----------- -----------
Total assets $ 134,353 $ 142,446
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Floor plan notes payable $ 38,065 $ 46,282
Current maturities of long-term debt 1,345 1,345
Accounts payable 6,620 8,623
Due to affiliates 5,405 5,478
Accrued expenses and other liabilities 8,446 7,408
Deferred income taxes 1,927 1,914
----------- -----------
Total current liabilities 61,808 71,050
Long-term debt 10,551 10,568
Deferred warranty revenue - long-term portion 1,615 2,310
----------- -----------
Total long-term liabilities 12,166 12,878
Stockholders' equity
Preferred stock, $.01 par value, 10,000 shares
authorized, none issued - -
Common stock, $.01 par value, 100,000,000 shares
authorized, 13,800,000 issued and outstanding 138 138
Paid-in capital 47,476 47,761
Retained earnings 12,765 10,619
----------- -----------
Total stockholders' equity 60,379 58,518
----------- -----------
Commitments and contingencies
Total liabilities and stockholders' equity $ 134,353 $ 142,446
----------- -----------
----------- -----------
The accompanying notes are an integral part of these financial statements.
3
CROSS-CONTINENT AUTO RETAILERS, INC.
COMBINED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
-------------------
1997 1996
------- -------
Cash flows from operating activities
Net income $ 2,146 $ 1,599
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 381 270
Proceeds from in-house extended warranty sales,
net of cancellations - 1,040
Amortization of deferred warranty revenue (472) (516)
Deferred taxes and other 14 116
(Increase) decrease in
Accounts receivable 3,507 (914)
Inventory 2,367 7,639
Other assets (927) -
Increase (decrease) in
Accounts payable - trade (2,002) (215)
Accrued expenses and other liabilities 815 (534)
------- -------
Net cash provided by operating activities 5,829 8,485
------- -------
Cash flows used in investing activities
Acquisition of property and equipment (753) (323)
------- -------
Cash flows used in financing activities
Change in floor plan notes payable (8,216) (5,743)
Due to affiliates (73) (73)
Proceeds from borrowing on long-term debt 124 -
Long-term debt repayments (141) (382)
Other (285) -
------- -------
Net cash used in financing activities (8,591) (6,198)
------- -------
Increase - (Decrease) in cash and cash equivalents (3,515) 1,964
Cash and cash equivalents at beginning of period 36,946 8,362
------- -------
Cash and cash equivalents at end of period $33,431 $10,326
------- -------
------- -------
The accompanying notes are an integral part of these financial statements.
4
CROSS-CONTINENT AUTO RETAILERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1997
NOTE 1. UNAUDITED INTERIM FINANCIAL INFORMATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three months ended March 31, 1997 are not necessarily
indicative of the results that may be expected for the year ending December
31, 1997. This interim report should be read in conjunction with the
consolidated financial statements and notes related thereto, and management's
discussion and analysis of results of operations and financial condition
included in Cross-Continent Auto Retailers, Inc.'s ("C-CAR" or the "Company")
Annual Report on Form 10-K for the year ended December 31, 1996. The
accompanying unaudited consolidated financial statements have been subject to
review by Price Waterhouse, L.L.P., the Company's independent accountants,
whose report is included herein.
NOTE 2. INITIAL PUBLIC OFFERING
In September 1996, the Company sold 3,675,000 shares of its common stock
(the "Common Stock") in an initial public offering for $14.00 per share (the
"Offering"). Net proceeds from the Offering, after considering underwriting
commissions, printing costs, professional fees, and other direct expenses,
were $45.2 million.
NOTE 3. NET INCOME PER COMMON SHARE
Earnings per share data are not presented for the three months ended
March 31, 1996 because the historical capital structure prior to the
Company's Offering is not comparable to the capital structure existing after
the Offering.
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Financial Accounting Standard No. 128, Earnings Per Share ("FAS 128"),
which is effective for financial statements issued for periods ending after
December 16, 1997, including interim periods. Effective December 31, 1997,
the Company will adopt FAS 128, which establishes standards for computing and
presenting earnings per share ("EPS"). The statement requires dual
presentation of basic and diluted EPS on the face of the income statement for
entities with complex capital structures and requires a reconciliation of the
numerator and denominator of the basic EPS computation, to the numerator and
denominator of the diluted EPS computation. Basic EPS excludes the effect of
potentially dilutive securities while diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised, converted, or resulted in the issuance of common stock
that would then share in the earnings of the entity.
Pro-forma basic and diluted EPS as computed pursuant to FAS 128 would
not have differed from the reported $0.16 per common share as presented on
the face of the consolidated statement of operations.
5
NOTE 4. RELATED PARTY TRANSACTIONS
In connection with its business travel, the Company from time to time
uses an airplane that is owned and operated by Plains Air, Inc. Plains Air,
Inc. is owned by Bill A. Gilliland and Robert W. Hall, Chairman and Senior
Vice Chairman, respectively. Currently, the Company pays Plains Air, Inc.
$13,050 per month plus a fee of approximately $488 per hour for use of the
airplane. During the three months ended March 31,1997 and 1996 the Company
paid Plains Air, Inc. an aggregate of $112,536 and $70,155, respectively, for
the use of the airplane.
In general, the Company is required to pay for all vehicles purchased
from the automakers upon delivery of the vehicles to the Company. General
Motors Acceptance Corporation ("GMAC") and Chrysler Financial Credit ("CFC")
provides financing for all new vehicles and used vehicles that are less than
five years old and have been driven less than 70,000 miles. This type of
financing is known as "floor plan financing" or "flooring." Under this
arrangement with GMAC and CFC, the Company may deposit funds with both
financial institutions in an amount up to 75% of the amount of the floor plan
financing. Such funds earn interest at the same rate charged by GMAC to the
Company for its flooring. From time to time, the control group and other
affiliates will advance funds to the Company primarily for the purpose of
investing their excess cash with GMAC and CFC. The Company acts only as an
intermediary in this process. At March 31, 1997, funds advanced and
outstanding from affiliates approximated $5.4 million. Such amounts
outstanding pursuant to these arrangements are included in Due to Affiliates
in the accompanying balance sheet. The amount of interest accrued pursuant
to these arrangements during the three months ended March 31, 1997 and 1996
approximated $112,745 and $40,000, respectively.
Gilliland Group Family Partnership ("GGFP") was the contracting agent
for the construction of certain facilities for the Company during the first
quarter of 1997. The total cost of the facilities approximated $389,000
during the first quarter of 1997. Such amount included approximately $27,000
as payment to GGFP for architectural and construction management fees.
NOTE 5. SUBSEQUENT EVENTS
On March 3, 1997, the Company announced the proposed acquisition of
Sahara Nissan, Inc., in Las Vegas, Nevada, which operates as Jack Biegger
Nissan ("Bigger Nissan"). The proposed purchase price is approximately $11.6
million consisting of $9 million in cash, $2 million in the Company's Common
Stock, and $0.6 million in a note payable to the sellers. Additionally, on
April 7, 1997, the Company announced the proposed acquisition of certain
assets of JRJ Investments, Inc., d/b/a Chaisson Motor Cars and Chaisson BMW,
a multiple-franchise auto dealership group, operating in Las Vegas, Nevada
and Henderson, Nevada. The proposed purchase price is approximately $27.5
million consisting of $19.5 million in cash, $5 million in the Company's
Common Stock and $3 million in a note payable to the seller. The Company
intends to fund the cash portion of these acquisitions with debt which is
currently being negotiated. These acquisitions will be accounted for under
the purchase method of accounting and the operations relating thereto will be
consolidated commencing at the effective date of each transaction. While
management believes these acquisitions and the related financing will be
completed in the near future, there can be no assurances to that effect until
the transactions actually close.
6
On April 10, 1997, the Company purchased all of the outstanding capital
stock of each of Douglas Toyota, Inc., a Colorado corporation, and Toyota
West Sales and Service, Inc., a Nevada corporation, together with certain
real estate to be used in connection with both dealerships. The dealerships
were purchased in exchange for an aggregate consideration consisting of
279,720 shares of common stock with certain registration rights, par value
$.01 per share, of the Company, cash in the amount of $28,000,000 and an
unsecured promissory note in the principal amount of $7,000,000, payable on
March 31, 2002, bearing an adjustable rate of interest equal to the prime
rate quoted by Bank of America, as published in the western edition of the
Wall Street Journal. The Colorado property was purchased for consideration
consisting of a promissory note, secured by the property, in the principal
amount of $2,000,000, payable on October 1, 1997, bearing an adjustable rate
of interest equal to the prime rate quoted by Bank of America, as published
in the western edition of the Wall Street Journal. The Nevada property was
purchased for consideration consisting of a promissory note, secured by the
property, in the principal amount of $5,500,000, payable on October 1, 1997,
bearing an adjustable rate of interest equal to the prime rate quoted by Bank
of America, as published in the western edition of the Wall Street Journal.
The property was purchased to relocate the existing dealerships to newly
constructed facilities. Management estimates the total cost of the
locations, including construction costs, to be in the range of $18 million to
$20 million.
The cash portion of the purchase price for the dealerships was provided
by $22,000,000 of the proceeds from the Offering and $6,000,000 of borrowings
from Amarillo National Bank evidenced by an unsecured promissory note,
payable in twelve consecutive quarterly principal payments with a final
maturity of March 30, 2000, bearing an adjustable rate of interest equal to
LIBOR, as published in Wall Street Journal on the first business day of the
month, plus 200 basis points. In connection with the foregoing transactions,
Mr. R. Douglas Spedding, the sole shareholder of each of the dealerships,
entered into an employment agreement with the Company under which he agreed
to be employed by the Company until April 1, 2000. Pursuant to the terms of
the employment agreement, R. Douglas Spedding shall receive a base
compensation of $500,000 annually, an amount equal to 2% of the consolidated
pre-tax earnings of the Company paid on a quarterly basis and an amount equal
to 2% of the consolidated pre-tax earnings of the Company paid in non-
qualified stock options. Additionally, the Company entered into an
employment agreement with Mr. Douglas J. Spedding under which he agreed to be
employed by the Company until June 1, 2000. Pursuant to the terms of the
employment agreement, Douglas J. Spedding shall receive an amount equal to 7%
of the pre-tax earnings of the Toyota West Sales and Service, Inc.,
dealership, paid on a monthly basis.
The Company will file combined audited financial statements for the two
dealerships as of December 31, 1996 and 1995 and for the three year period
ended December 31, 1996, unaudited interim financial information as of and
for the three month period ended March 31, 1997 and 1996 and the required
pro-forma information within the prescribed filing time as required for
Current Report on Form 8-K.
NOTE 6. CONTINGENCIES
On April 4, 1997, certain members of a labor union initiated a strike at
a General Motors' new vehicle assembly plant in Oklahoma City, Oklahoma; and
on April 22, 1997, labor also initiated a strike at a General Motors' new
vehicle assembly plant in Pontiac, Michigan. General Motors has represented
that it has experienced a disruption in the production of certain of its new
7
vehicles, including the popular extended cab pickup truck which is assembled
at the Pontiac, Michigan plant. The Company relies on General Motors as the
primary source of new vehicle inventory for its three Chevrolet dealerships
in the Amarillo, Texas market. As of the date of this filing, General Motors
has not announced a resolution to these strikes.
On April 9, 1997, labor initiated a strike at a Chrysler engine plant in
Detroit, Michigan. Chrysler has represented that it has experienced a
disruption in the production of certain of its new vehicles as a result of
the strike. On May 9, 1997, Chrysler announced a resolution to the strike.
The Company relies on Chrysler as the primary source of new vehicle inventory
for its two Dodge dealerships in the Oklahoma City market.
A continuation of the strikes discussed herein, or any other disruptions
in the availability of new vehicle inventory from the manufacturers, could
have an adverse affect on new vehicle sales at the Company's Chevrolet and
Dodge dealerships in the second quarter.
8
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
The Board of Directors
Cross-Continent Auto Retailers, Inc.
We have reviewed the accompanying condensed consolidated balance sheet of
Cross-Continent Auto Retailers, Inc. and its subsidiaries (the "Company") as
of March 31, 1997, and the related consolidated statements of income and cash
flows for the three month period ended March 31, 1997. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objection of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.
We previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of the Company as of December 31,
1996, and the related consolidated statements of income, shareholders'
equity, and cash flows for the year then ended (not presented herein) and in
our report dated February 13, 1997, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information set
forth in the accompanying consolidated balance sheet as of December 31, 1996,
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
PRICE WATERHOUSE, LLP
Fort Worth, Texas
April 24, 1997
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
Cross-Continent Auto Retailers, Inc. ("C-CAR" or the "Company")
currently owns and operates a group of nine franchised automobile dealerships
in the Amarillo, Texas, Oklahoma City, Oklahoma, Denver, Colorado and Las
Vegas, Nevada markets. However, the financial condition and results of
operations reported herein are based solely upon the results of the seven
dealerships owned by C-CAR at March 31, 1997. The Company generates its
revenues from sales of new and used vehicles, fees for repair and maintenance
services, sales of replacement parts, and fees and commissions from arranging
financing, extended warranties, and credit insurance in connection with
vehicle sales.
FACTORS THAT MAY AFFECT FUTURE RESULTS
Certain matters discussed herein are forward-looking statements about
the business, financial condition and prospects of the Company. The actual
results could differ materially from those indicated by such forward-looking
statements because of various risks and uncertainties. Such risks and
uncertainties may include, but are not limited to, regional and national
economic conditions, changes in consumer demand for products offered by the
Company, employee strikes and other matters that may adversely affect the
availability of products and pricing, state and federal regulatory
environment, and other risks indicated in the Company's previous filings with
the Commission. The Company cannot control these risks and uncertainties
and, in many cases, cannot predict the risks and uncertainties that could
cause its actual results to differ materially from those indicated by the
forward-looking statements.
RESULTS OF OPERATIONS
REVENUES
The Company's total revenue increased 25.0% to $89.0 million in 1997
from $71.2 million in 1996. New vehicle sales increased 0.9% to $34.9
million in 1997 from $34.6 million in 1996, primarily because of the
acquisition of the Company's Lynn Hickey Dodge dealership in Oklahoma City.
The inclusion of the results of this dealership accounted for the overall
increase in new vehicle sales in 1997. The increase in new vehicle revenue
from the Company's Oklahoma City acquisition was offset by a lower demand for
new vehicles in the Company's Amarillo market and Oklahoma City market. This
lower demand is attributable to adverse weather conditions in the Company's
trade areas and a lower demand for new vehicles consistent with trends being
experienced in the automotive retail industry.
Used vehicle sales increased 45.7% to $42.7 million in 1997 from $29.3
in 1996. The inclusion of the results Company's Lynn Hickey Dodge acquisition
accounted for 91.8% of this increase in used vehicle sales. The Company
attributes the remaining increase to its market strategy for used vehicle
inventory management and increasing demand for used vehicles as the price of
new vehicles continues to increase.
The Company's other operating revenue increased 59.7% to $11.5 million
for 1997, compared to $7.2 million for 1996 primarily due to inclusion of the
Company's Lynn Hickey Dodge acquisition in the 1997 results of operations.
The Oklahoma City acquisition accounted for approximately 63.0% of the
10
increase in other operating revenue. The remaining increase in other
operating revenue can be largely attributed to the Company, since July 1996,
selling third party vendor warranties at its dealerships rather than its own
warranties. Historically, the Company principally sold its own in-house
extended warranty at its dealerships and recognized the resulting revenue
over the term of the warranties. In contrast, upon the sale of third party
extended warranties the Company receives and immediately recognizes
commission income at the time of sale as the Company has no further
obligation pursuant to the extended warranty contracts.
On April 4, 1997, certain members of a labor union initiated a strike at
a General Motors' new vehicle assembly plant in Oklahoma City, Oklahoma; and
on April 22, 1997, labor also initiated a strike at a General Motors' new
vehicle assembly plant in Pontiac, Michigan. General Motors has represented
that it has experienced a disruption in the production of certain of its new
vehicles, including the popular extended cab pickup truck which is assembled
at the Pontiac, Michigan plant. The Company relies on General Motors as the
primary source of new vehicle inventory for its three Chevrolet dealerships
in the Amarillo, Texas market. As of the date of this filing, General Motors
has not announced a resolution to these strikes.
On April 9, 1997, labor initiated a strike at a Chrysler engine plant in
Detroit, Michigan. Chrysler has represented that it has experienced a
disruption in the production of certain of its new vehicles as a result of
the strike. On May 9, 1997, Chrysler announced a resolution to the strike.
The Company relies on Chrysler as the primary source of new vehicle inventory
for its two Dodge dealerships in the Oklahoma City market.
A continuation of the strikes discussed herein, or any other disruptions
in the availability of new vehicle inventory from the manufacturers, could
have an adverse affect on new vehicle sales at the Company's Chevrolet and
Dodge dealerships in the second quarter.
GROSS PROFIT
Gross profit increased 34.5% in 1997 to $15.2 million from $11.3 million
in 1996 primarily due to the recently acquired Lynn Hickey Dodge dealership
and due to selling third party extended warranties as opposed to in-house
warranties which the company sold during the 1996 period. Gross profit as a
percentage of sales increased to 17.1% in 1997 from 15.9% in 1996. The
increase in gross profit as a percentage of sales is primarily attributable
to higher gross margins on other operating revenue. Gross margin on other
operating revenue increased to 64.8% in 1997 as compared to 61.2% in 1996.
The increase in gross margin is also attributable to higher margin revenue
components representing an increased percentage of gross revenues.
The amount of revenue recognized related to the in-house warranties sold
in prior periods, which was deferred and amortized over the contractual
service period of the warranty contracts, will decline each quarter and will
eventually cease at the expiration of the warranty periods. As a result,
gross margin will be negatively impacted during future periods.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
The Company's selling, general and administrative expenses increased to
$10.9 million, or 12.2% of the Company's revenues, in 1997 from $7.5 million,
or 10.5% of total revenues, in 1996.
11
The increase is primarily attributable to incremental assimilation
expenses associated with the acquisition of the Company's Oklahoma City
dealerships. These expenses relate to integrating the Company's systems into
their operations and implementing the Company's strategies. The remaining
portion of the increase is attributable to an increase in the Company's
corporate expense resulting from the conversion from a private company to a
public company.
INTEREST EXPENSE
The Company's interest expense, net of interest income, decreased
approximately 51.3% to $475,000 for 1997 compared to $975,000 for 1996. The
decrease is attributable to interest income earned from the investment of the
remaining portion of the proceeds from the Offering. For the three months
ended March 31, 1997 this income approximated $573,000. The interest income
was partially offset by an increase in interest expense due to the Company's
Lynn Hickey Dodge acquisition.
Net interest expense is expected to increase throughout 1997 as the
Company uses the proceeds from the Offering to acquire additional dealerships
and due to increased floor plan financing associated with the newly acquired
dealerships.
INCOME TAXES
The Company's effective income tax rate remained consistent at 37.4% for
1997 and 1996. Management expects the effective tax rate in 1997 to
approximate 37.5% to 38.0%.
NET INCOME
The Company's net income increased approximately 31.3% to $2.1 million
in 1997 compared to $1.6 million in 1996. The increase was primarily
attributable to the Company's Lynn Hickey Dodge acquisition, and the
commencement of selling third party extended warranty contracts on an
exclusive basis, which was partially offset by an increase in selling,
general and administrative expenses.
LIQUIDITY AND CAPITAL RESOURCES
The Company requires cash primarily for financing its inventory of new
and used vehicles and replacement parts, acquisitions of additional
dealerships, capital expenditures and transition expenses in connection with
its acquisitions. Historically, the Company has met these liquidity
requirements primarily through cash flow generated from operating activities,
floor plan financing and borrowings under credit agreements with GMAC and
CFC. Floor plan financing from GMAC currently represents the primary source
of financing for vehicle inventories.
The Company currently finances its purchases of new vehicle inventory
with GMAC and CFC. The Company also maintains lines of credit with GMAC and
CFC for the financing of used vehicles, pursuant to which GMAC and CFC
provide financing for up to 80% of the cost of used vehicles that are less
than five years old and that have been driven fewer than 70,000 miles. GMAC
and CFC receive a security interest in all inventory they finance. The
Company makes monthly interest payments on the amounts financed by GMAC and
CFC. The Company must repay the principal amount of indebtedness with
respect to any vehicle within two days of the sale of such vehicle by the
12
Company. The Company periodically renegotiates the terms of its financing
with GMAC and CFC, including the interest rate. As of March 31, 1997, the
Company had outstanding floor plan debt of $38.1 million and paid an average
annual interest rate of 8%.
During the first three months of 1997, the Company generated net cash of
$5.8 million from operating activities, compared to $8.5 million for the
three months ended March 31, 1996. The decrease is primarily attributable to
fluctuations in inventory levels and accounts receivable, partially offset by
decreased accounts payable. The fluctuation in inventory levels is primarily
determined by timing of new vehicle deliveries from the automakers, seasonal
factors and changes in the optimal level of inventory as determined by
management based on inventory management strategies.
Cash used in investing activities of $753,000 during the first three
months of 1997 were primarily capital expenditures. Capital expenditures for
the second quarter are expected to approximate $8,500,000 relating primarily
to the purchase of land and interim construction advances at Toyota West,
Inc. and Douglas Toyota, Inc., which will be financed through a $7.5 million
note to the seller and cash from operations. The Company currently
anticipates that any future acquisitions will be financed with proceeds from
the Offering, issuance of stock or debt or a combination of cash, stock and
debt.
Cash used in financing activities amounted to $8.6 million for the three
months ended March 31, 1997 and was primarily attributable to reduced
floorplan notes payable. The reduction in floorplan financing in 1997 was
greater than the reduction in inventory which was primarily due to the
Company using a portion of its excess cash to reduce floorplan financing. The
Company anticipates the relation of floorplan financing to inventory to
increase to March 31, 1996 levels as the Company uses excess cash to fund
future acquisitions. In 1996 cash provided by financing activities reflected
a decrease in inventory financing and loans from affiliates.
The Company believes that its existing capital resources, including the
remaining proceeds of the Offering, will be sufficient to run the Company's
operations in the ordinary course and fund its debt service requirements. The
Company estimates that it will incur a tax liability of approximately $4
million in connection with the change in its tax basis of accounting for
inventory from LIFO to FIFO. The Company will be required to pay this
liability in six equal annual installments, beginning in March 1997, and
believes that it will be able to pay such obligation with cash provided by
operations.
SEASONALITY
The Company generally experiences a higher volume of new and used
vehicle sales in the second and third quarters of each year. If the Company
acquires dealerships in other markets, it may be affected by other seasonal
or consumer buying trends.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company is named in claims involving the
manufacture of automobiles, contractual disputes and other matters arising in
the ordinary course of the Company's business. Currently, no legal
proceedings are pending against or involve the Company that, in the opinion
13
of management, could be expected to have a material adverse effect on the
business, financial condition or results of operations of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) LISTING OF EXHIBITS
(Exhibits followed by an (*) constitute management contracts or
compensatory plans or arrangements.)
EXHIBIT
NUMBER DESCRIPTION
- ------- ----------------------------------------------------
2.1 Asset Purchase Agreement dated as of June 17, 1996, among
Lynn Hickey Dodge, Inc., Lynn Hickey, and Cross Country
Dodge, Inc. (1)
2.2 Stock Purchase Agreement, dated as of January 23, 1997, by
and between Cross-Continent Auto Retailers, Inc. and R.
Douglas Spedding (2)
2.3 Amendment to Stock Purchase Agreement dated as of April 1,
1997, by and between Cross-Continent Auto Retailers, Inc.
and R. Douglas Spedding (3)
2.4 Stock Purchase Agreement dated as of February 28, 1997,
among Cross-Continent Auto Retailers, Inc., Jack Biegger,
Dale Edwards, and Sahara Datsun, Inc., d/b/a Jack Biegger
Nissan, as amended by the Amendment to Stock Purchase
Agreement dated as of March 17, 1997, among Cross-Continent
Auto Retailers, Inc., Jack Biegger, Dale Edwards, and
Sahara Nissan, Inc., d/b/a Jack Biegger Nissan (4)
2.5 Second Amendment to Stock Purchase Agreement dated as of
April 30, 1997, by and between Cross-Continent Auto
Retailers, Inc., Jack Biegger, Dale Edwards, and Sahara
Datsun, Inc., d/b/a Jack Biegger Nissan, as amended by the
Amendment to Stock Purchase Agreement dated as of March 17,
1997, among Cross-Continent Auto Retailers, Inc., Jack
Biegger, Dale Edwards, and Sahara Nissan, Inc., d/b/a Jack
Biegger Nissan
2.7 Purchase Agreement dated as of March 1, 1997, between RDS,
Inc. and Cross-Continent Auto Retailers, Inc.(omitting
exhibits thereto, which will be furnished supplementally to
the Commission upon request) (3)
2.8 Purchase Agreement dated as of March 1, 1997, between R.
Douglas Spedding and Cross-Continent Auto Retailers,
Inc.(omitting exhibits thereto, which will be furnished
supplementally to the Commission upon request) (3)
2.6 Asset Purchase Agreement dated as of April 16, 1997, by and
between JRJ Investments, Inc., a Nevada corporation, as
seller, The Chaisson Family Trust-R501, the shareholders
and the Company, as buyer
3.1 Amended and Restated Certificate of Incorporation of
Cross-Continent Auto Retailers, Inc. (5)
3.3 Amended and Restated Bylaws of Cross-Continent Auto
Retailers, Inc. (5)
4.1 Specimen Common Stock Certificate (5)
4.2 Rights Agreement between Cross-Continent Auto Retailers,
Inc. and The Bank of New York, as rights agent (5)
4.3 Amended and Restated 1996 Stock Option Plan of Cross-Continent
Auto Retailers, Inc. (6)
14
4.4 Registration Rights Agreement dated as of April 1, 1997, by
and between Cross-Continent Auto Retailers, Inc. and R.
Douglas Spedding (3)
10.1 Dealer Sales and Service Agreement dated November 1, 1995,
between the Chevrolet Division of General Motors
Corporation and Plains Chevrolet, Inc., as amended by
Supplemental Agreement dated as of July 29, 1996 (1)(7)
10.2 Sales and Service Agreement between Performance Dodge, Inc.
and Chrysler Corporation, dated as of October 1, 1996 (1)
10.3 Dealer Sales and Service Agreement dated September 23,
1996, between the Nissan Division of Nissan Motor
Corporation, U.S.A., Quality Nissan, Inc. and Cross-Continent
Auto Retailers, Inc. (8)
10.4 Dealer Sales and Service Agreement dated September 23,
1996, between the Nissan Division of Nissan Motor
Corporation, U.S.A., Performance Nissan and Cross-Continent
Auto Retailers, Inc. (5)
10.4 Dollar Volume Contract dated March 31, 1994, between Plains
Chevrolet, Inc., Westgate Chevrolet, Inc., Midway
Chevrolet, Inc., Quality Nissan, Inc. and Amarillo Globe News (1)
10.5 Sublease Agreement dated June 1, 1995, between Gilliland
Group Family Partnership and Performance Nissan, Inc. (1)
10.6 Lease Agreement dated March 1, 1994, among John W. Adams,
Eleanore A. Braly as Trustee of the Eleanore A. Braly
Trust, Romie G. Carpenter, Melody Lynn Goff, and Selden
Simpson and Quality Nissan, Inc. (1)
10.7 Office Lease dated June 1, 1996, between Gilliland Group
Family Partnership and Cross-Country Auto Retailers,
Inc.(now named Cross-Continent Auto Retailers, Inc.) (1)
10.8 Wholesale Security Agreement, as amended, dated December 4,
1995, between General Motors Acceptance Corporation and
Performance Dodge, Inc. (1)(9)
10.9 Corporation and Shareholders' Agreement of Xaris Management
Co. (1)
10.10 Documents dated December 4, 1995, relating to $5,550,000
loan by General Motors Acceptance Corporation to
Performance Dodge, Inc. (1)
10.10.1 Promissory Note by Performance Dodge, Inc. to General
Motors Acceptance Corporation, in the amount of $1,850,000 (4)
10.10.2 Promissory Note by Performance Dodge, Inc. to General
Motors Acceptance Corporation, in the amount of $3,700,000 (4)
10.10.3 Cross-Default and Cross-Collateralization Agreement between
General Motors Acceptance Corporation and Performance
Dodge, Inc. (4)
10.10.4 Security Agreement between General Motors Acceptance
Corporation and Performance Dodge, Inc. (4)
10.10.5 Mortgage, Assignment and Security Agreement between General
Motors Acceptance Corporation and Performance Dodge, Inc. (4)
10.11 Documents relating to loan by General Motors Acceptance
Corporation to Midway Chevrolet, Inc. (1)
10.11.1 Promissory Note dated December 15, 1989, by Midway
Chevrolet, Inc. to General Motors Acceptance Corporation,
in the amount of $977,249.74 (4)
10.11.2 Renewal, Extension and Modification Agreement dated
February 20, 1995, between General Motors Acceptance
Corporation and Midway Chevrolet, Inc. (4)
10.11.3 Security Agreement dated February 20, 1995, between General
Motors Acceptance Corporation and Midway Chevrolet, Inc. (4)
10.12 Documents dated December 4, 1995, relating to $1,350,000
loan by General Motors Acceptance Corporation to
Performance Nissan, L.L.C. (1)
15
10.12.1 Promissory Note by Performance Nissan, L.L.C. to General Motors
Acceptance Corporation, in the amount of $1,350,000 (4)
10.12.2 Cross-Default and Cross-Collateralization Agreement between
General Motors Acceptance Corporation and Performance
Nissan, L.L.C. (4)
10.12.3 Security Agreement between General Motors Acceptance
Corporation and Performance Nissan, L.L.C. (4)
10.13 Documents relating to used vehicle inventory financing agreements
between General Motors Acceptance Corporation and Cross-Continent
Auto Retailers, Inc. dealership subsidiaries (1)
10.13.1 Used Vehicle Wholesale Borrowing Base Credit Line Loan
Agreement dated June 7, 1996, between General Motors
Acceptance Corporation and Performance Dodge, Inc. (4)(9)
10.13.2 Promissory Note dated June 7, 1996, by Performance Dodge,
Inc. to General Motors Acceptance Corporation, in the
amount of $3,000,000 (4)(10)
10.13.3 Cross-Default and Cross-Collateralization Agreements
between General Motors Acceptance Corporation and
Performance Nissan, Inc., Performance Dodge, Inc., Midway
Chevrolet, Inc., Plains Chevrolet, Inc., Quality Nissan,
Inc., and Westgate Chevrolet, Inc. (4)
10.14(*) Employment Contract dated February 21, 1997, by and between
Cross-Continent Auto Retailers, Inc. and James F. Purser (4)
10.15(*) Employment Contract dated February 18, 1997, by and between
Cross-Continent Auto Retailers, Inc. and R. Wayne Moore
10.16(*) Employment Agreement dated as of April 1, 1997, by and
between R. Douglas Spedding and Cross-Continent Auto
Retailers, Inc. (3)
10.17(*) Employment Agreement dated as of April 1, 1997, by and between
Douglas J. Spedding and Cross-Continent Auto Retailers, Inc. (3)
10.18 Promissory Note dated April 1, 1997, by Cross-Continent
Auto Retailers, Inc. to the order of R. Douglas Spedding in
the principal amount of $7,000,000 (3)
10.19 Promissory Note dated April 4, 1997, by Cross-Continent Auto
Retailers, Inc. to Amarillo National Bank in the principal amount
of $8,000,000 (3)
10.20 Documents dated April 10, 1997, relating to promissory note
by Cross-Continent Auto Retailers, Inc. to the order of
RDS, Inc. in the principal amount of $2,000,000 (3)
10.20.1 Promissory Note by Cross-Continent Auto Retailers, Inc. to
the order of RDS, Inc. (3)
10.20.2 Security Agreement between Cross-Continent Auto Retailers,
Inc. and RDS, Inc. (3)
10.20.3 Deed of Trust between Cross-Continent Auto Retailers, Inc.
and RDS, Inc. (3)
10.21 Documents dated April 10, 1997, relating to promissory note
by Cross-Continent Auto Retailers, Inc. to the order of R.
Douglas Spedding in the principal amount of $5,500,000 (3)
10.21.1 Promissory Note by Cross-Continent Auto Retailers, Inc. to
the order of R. Douglas Spedding (3)
10.21.2 Security Agreement between Cross-Continent Auto Retailers,
Inc. and R. Douglas Spedding (3)
10.21.3 Deed of Trust between Cross-Continent Auto Retailers, Inc.
and R. Douglas Spedding (3)
10.22 Release and Indemnification Agreement dated as of April 10,
1997, between Cross-Continent Auto Retailers, Inc. And R.
Douglas Spedding (3)
27.1 Financial Data Table
16
- --------------------------
(1) Previously filed as an exhibit to the Company's Registration
Statement on Form S-1 (Registration No. 333-0685), incorporated
herein by reference.
(2) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996,
incorporated herein by reference.
(3) Previously filed as an exhibit to the Company's Current Report
on Form 8-K dated April 10, 1997, incorporated herein by
reference.
(4) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996,
incorporated herein by reference.
(5) Previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the Quarterly Period Ended September 30, 1996,
incorporated herein by reference.
(6) Previously filed as an exhibit to the Company's Registration
Statement on Form S-8, filed with the Securities and Exchange
Commission on March 7, 1997, incorporated herein by reference.
(7) Substantially identical agreements exist between the Chevrolet
Division and each of Midway Chevrolet, Inc. and Westgate
Chevrolet, Inc.
(8) Substantially identical Agreement exists between the Nissan
Division and Performance Nissan, Inc.
(9) Substantially identical Agreements exist between General Motors
Acceptance Corporation and each of Midway Chevrolet, Inc.,
Plains Chevrolet, Inc., Westgate Chevrolet, Inc., Quality
Nissan, Inc., and Performance Nissan, Inc.
(10) Substantially identical Promissory Notes have been executed by
Midway Chevrolet, Inc., Plains Chevrolet, Inc., Westgate
Chevrolet, Inc., Quality Nissan, Inc., and Performance Nissan,
Inc., in the amounts indicated for each dealership subsidiary in
the Cross-Default and Cross-Collateralization Agreement
(Exhibit 10.13.3)
(b) REPORTS ON FORM 8-K
A Form 8-K was filed on April 25, 1997 reporting the purchase of
all the outstanding capital stock of each of Douglas Toyota, Inc.,
a Colorado corporation, and Toyota West Sales & Service, Inc., a
Nevada corporation, together with certain real estate to be used
in connection with both dealerships.
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CROSS-CONTINENT AUTO RETAILERS, INC.
Date: May 14, 1997 By: /s/ BILL GILLILAND
------------------------------------
Bill Gilliland, Chairman and
Chief Executive Officer
Date: May 14, 1997 By: /s/ JAMES F. PURSER
------------------------------------
James F. Purser,
Chief Financial Officer
Date: May 14, 1997 By: /s/ CHARLES D. WINTON
------------------------------------
Charles D. Winton, Vice President
and Chief Accounting Officer
18
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- ---------------------------------------------------
2.1 Asset Purchase Agreement dated as of June 17, 1996, among
Lynn Hickey Dodge, Inc., Lynn Hickey, and Cross Country
Dodge, Inc. (1)
2.2 Stock Purchase Agreement, dated as of January 23, 1997, by
and between Cross-Continent Auto Retailers, Inc. and R.
Douglas Spedding (2)
2.3 Amendment to Stock Purchase Agreement dated as of April 1,
1997, by and between Cross-Continent Auto Retailers, Inc.
and R. Douglas Spedding (3)
2.4 Stock Purchase Agreement dated as of February 28, 1997,
among Cross-Continent Auto Retailers, Inc., Jack Biegger,
Dale Edwards, and Sahara Datsun, Inc., d/b/a Jack Biegger
Nissan, as amended by the Amendment to Stock Purchase
Agreement dated as of March 17, 1997, among Cross-Continent
Auto Retailers, Inc., Jack Biegger, Dale Edwards, and
Sahara Nissan, Inc., d/b/a Jack Biegger Nissan (4)
2.5 Second Amendment to Stock Purchase Agreement dated as of
April 30, 1997, by and between Cross-Continent Auto
Retailers, Inc., Jack Biegger, Dale Edwards, and Sahara
Datsun, Inc., d/b/a Jack Biegger Nissan, as amended by the
Amendment to Stock Purchase Agreement dated as of March 17,
1997, among Cross-Continent Auto Retailers, Inc., Jack
Biegger, Dale Edwards, and Sahara Nissan, Inc., d/b/a Jack
Biegger Nissan
2.7 Purchase Agreement dated as of March 1, 1997, between RDS,
Inc. and Cross-Continent Auto Retailers, Inc.(omitting
exhibits thereto, which will be furnished supplementally to
the Commission upon request) (3)
2.8 Purchase Agreement dated as of March 1, 1997, between R.
Douglas Spedding and Cross-Continent Auto Retailers,
Inc.(omitting exhibits thereto, which will be furnished
supplementally to the Commission upon request) (3)
2.6 Asset Purchase Agreement dated as of April 16, 1997, by and
between JRJ Investments, Inc., a Nevada corporation, as
seller, The Chaisson Family Trust-R501, the shareholders
and the Company, as buyer
3.1 Amended and Restated Certificate of Incorporation of
Cross-Continent Auto Retailers, Inc. (5)
3.3 Amended and Restated Bylaws of Cross-Continent Auto
Retailers, Inc. (5)
4.1 Specimen Common Stock Certificate (5)
4.2 Rights Agreement between Cross-Continent Auto Retailers,
Inc. and The Bank of New York, as rights agent (5)
4.3 Amended and Restated 1996 Stock Option Plan of Cross-Continent
Auto Retailers, Inc. (6)
4.4 Registration Rights Agreement dated as of April 1, 1997, by
and between Cross-Continent Auto Retailers, Inc. and R.
Douglas Spedding (3)
10.1 Dealer Sales and Service Agreement dated November 1, 1995,
between the Chevrolet Division of General Motors
Corporation and Plains Chevrolet, Inc., as amended by
Supplemental Agreement dated as of July 29, 1996 (1)(7)
10.2 Sales and Service Agreement between Performance Dodge, Inc.
and Chrysler Corporation, dated as of October 1, 1996 (1)
19
10.3 Dealer Sales and Service Agreement dated September 23,
1996, between the Nissan Division of Nissan Motor
Corporation, U.S.A., Quality Nissan, Inc. and Cross-Continent
Auto Retailers, Inc. (8)
10.4 Dealer Sales and Service Agreement dated September 23,
1996, between the Nissan Division of Nissan Motor
Corporation, U.S.A., Performance Nissan and Cross-Continent
Auto Retailers, Inc. (5)
10.4 Dollar Volume Contract dated March 31, 1994, between Plains
Chevrolet, Inc., Westgate Chevrolet, Inc., Midway Chevrolet,
Inc., Quality Nissan, Inc. and Amarillo Globe News (1)
10.5 Sublease Agreement dated June 1, 1995, between Gilliland
Group Family Partnership and Performance Nissan, Inc. (1)
10.6 Lease Agreement dated March 1, 1994, among John W. Adams,
Eleanore A. Braly as Trustee of the Eleanore A. Braly
Trust, Romie G. Carpenter, Melody Lynn Goff, and Selden
Simpson and Quality Nissan, Inc. (1)
10.7 Office Lease dated June 1, 1996, between Gilliland Group
Family Partnership and Cross-Country Auto Retailers,
Inc.(now named Cross-Continent Auto Retailers, Inc.) (1)
10.8 Wholesale Security Agreement, as amended, dated December 4, 1995,
between General Motors Acceptance Corporation and Performance
Dodge, Inc. (1)(9)
10.9 Corporation and Shareholders' Agreement of Xaris Management Co. (1)
10.10 Documents dated December 4, 1995, relating to $5,550,000 loan by
General Motors Acceptance Corporation to Performance Dodge, Inc. (1)
10.10.1 Promissory Note by Performance Dodge, Inc. to General Motors
Acceptance Corporation, in the amount of $1,850,000 (4)
10.10.2 Promissory Note by Performance Dodge, Inc. to General Motors
Acceptance Corporation, in the amount of $3,700,000 (4)
10.10.3 Cross-Default and Cross-Collateralization Agreement between General
Motors Acceptance Corporation and Performance Dodge, Inc. (4)
10.10.4 Security Agreement between General Motors Acceptance Corporation
and Performance Dodge, Inc. (4)
10.10.5 Mortgage, Assignment and Security Agreement between General Motors
Acceptance Corporation and Performance Dodge, Inc. (4)
10.11 Documents relating to loan by General Motors Acceptance Corporation
to Midway Chevrolet, Inc. (1)
10.11.1 Promissory Note dated December 15, 1989, by Midway Chevrolet, Inc.
to General Motors Acceptance Corporation, in the amount of
$977,249.74 (4)
10.11.2 Renewal, Extension and Modification Agreement dated
February 20, 1995, between General Motors Acceptance Corporation
and Midway Chevrolet, Inc. (4)
10.11.3 Security Agreement dated February 20, 1995, between General Motors
Acceptance Corporation and Midway Chevrolet, Inc. (4)
10.12 Documents dated December 4, 1995, relating to $1,350,000 loan by
General Motors Acceptance Corporation to Performance Nissan,
L.L.C. (1)
10.12.1 Promissory Note by Performance Nissan, L.L.C. to General Motors
Acceptance Corporation, in the amount of $1,350,000 (4)
10.12.2 Cross-Default and Cross-Collateralization Agreement between General
Motors Acceptance Corporation and Performance Nissan, L.L.C. (4)
10.12.3 Security Agreement between General Motors Acceptance Corporation
and Performance Nissan, L.L.C. (4)
10.13 Documents relating to used vehicle inventory financing agreements
between General Motors Acceptance Corporation and Cross-Continent
Auto Retailers, Inc. dealership subsidiaries (1)
20
10.13.1 Used Vehicle Wholesale Borrowing Base Credit Line Loan Agreement
dated June 7, 1996, between General Motors Acceptance Corporation
and Performance Dodge, Inc. (4)(9)
10.13.2 Promissory Note dated June 7, 1996, by Performance Dodge, Inc. to
General Motors Acceptance Corporation, in the amount of
$3,000,000 (4)(10)
10.13.3 Cross-Default and Cross-Collateralization Agreements between General
Motors Acceptance Corporation and Performance Nissan, Inc.,
Performance Dodge, Inc., Midway Chevrolet, Inc., Plains Chevrolet,
Inc., Quality Nissan, Inc., and Westgate Chevrolet, Inc. (4)
10.14(*) Employment Contract dated February 21, 1997, by and between
Cross-Continent Auto Retailers, Inc. and James F. Purser (4)
10.15(*) Employment Contract dated February 18, 1997, by and between
Cross-Continent Auto Retailers, Inc. and R. Wayne Moore
10.16(*) Employment Agreement dated as of April 1, 1997, by and
between R. Douglas Spedding and Cross-Continent Auto
Retailers, Inc. (3)
10.17(*) Employment Agreement dated as of April 1, 1997, by and between
Douglas J. Spedding and Cross-Continent Auto Retailers, Inc. (3)
10.18 Promissory Note dated April 1, 1997, by Cross-Continent Auto
Retailers, Inc. to the order of R. Douglas Spedding in the
principal amount of $7,000,000 (3)
10.19 Promissory Note dated April 4, 1997, by Cross-Continent Auto
Retailers, Inc. to Amarillo National Bank in the principal amount
of $8,000,000 (3)
10.20 Documents dated April 10, 1997, relating to promissory note by
Cross-Continent Auto Retailers, Inc. to the order of RDS, Inc. in
the principal amount of $2,000,000 (3)
10.20.1 Promissory Note by Cross-Continent Auto Retailers, Inc. to the
order of RDS, Inc. (3)
10.20.2 Security Agreement between Cross-Continent Auto Retailers, Inc.
and RDS, Inc. (3)
10.20.3 Deed of Trust between Cross-Continent Auto Retailers, Inc.
and RDS, Inc. (3)
10.21 Documents dated April 10, 1997, relating to promissory note by
Cross-Continent Auto Retailers, Inc. to the order of R. Douglas
Spedding in the principal amount of $5,500,000 (3)
10.21.1 Promissory Note by Cross-Continent Auto Retailers, Inc. to
the order of R. Douglas Spedding (3)
10.21.2 Security Agreement between Cross-Continent Auto Retailers,
Inc. and R. Douglas Spedding (3)
10.21.3 Deed of Trust between Cross-Continent Auto Retailers, Inc.
and R. Douglas Spedding (3)
10.22 Release and Indemnification Agreement dated as of April 10, 1997,
between Cross-Continent Auto Retailers, Inc. And R. Douglas
Spedding (3)
27.1 Financial Data Table
- --------------------------
(1) Previously filed as an exhibit to the Company's Registration Statement
on Form S-1 (Registration No. 333-0685), incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996, incorporated
herein by reference.
(3) Previously filed as an exhibit to the Company's Current Report on Form 8-K
dated April 10, 1997, incorporated herein by reference.
21
(4) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996,
incorporated herein by reference.
(5) Previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the Quarterly Period Ended September 30, 1996,
incorporated herein by reference.
(6) Previously filed as an exhibit to the Company's Registration
Statement on Form S-8, filed with the Securities and Exchange
Commission on March 7, 1997, incorporated herein by reference.
(7) Substantially identical agreements exist between the Chevrolet
Division and each of Midway Chevrolet, Inc. and Westgate
Chevrolet, Inc.
(8) Substantially identical Agreement exists between the Nissan
Division and Performance Nissan, Inc.
(9) Substantially identical Agreements exist between General Motors
Acceptance Corporation and each of Midway Chevrolet, Inc.,
Plains Chevrolet, Inc., Westgate Chevrolet, Inc., Quality
Nissan, Inc., and Performance Nissan, Inc.
(10) Substantially identical Promissory Notes have been executed by
Midway Chevrolet, Inc., Plains Chevrolet, Inc., Westgate
Chevrolet, Inc., Quality Nissan, Inc., and Performance Nissan,
Inc., in the amounts indicated for each dealership subsidiary in
the Cross-Default and Cross-Collateralization Agreement
(Exhibit 10.13.3)
22