EXHIBIT 99.1
PRESS RELEASE
[UNITED AUTO LOGO]
United Auto Group, Inc.
2555 Telegraph Road
Bloomfield Hills, MI 48302-0954
Contact: Roger Penske Jim Davidson Tony Pordon
Chairman Executive VP -- Finance Vice President -- Investor Relations
248-648-2400 201-325-3303 248-648-2540
jdavidson@unitedauto.com tony.pordon@unitedauto.com
UNITEDAUTO REPORTS FOURTH QUARTER AND FULL YEAR RECORDS,
BEFORE ONE TIME ITEMS
Q4 INCOME INCREASES 25% TO $13.9 MILLION
Q4 EARNINGS PER SHARE INCREASES 10% TO $0.34 PER SHARE
Full Year Earnings Per Share Increases 41% to $1.82
Full Year Same Store Retail Revenues Increase 3.8% and Related
Gross Profit Increases 5.9%
COMPANY TO ACQUIRE INSKIP AUTOCENTER IN WARWICK, RI
DETROIT, MI, FEBRUARY 19, 2003 -- United Auto Group, Inc. (NYSE: UAG),
a FORTUNE 500 automotive specialty retailer, today announced record results for
fourth quarter 2002 including double-digit growth in revenues, income and
earnings per share, before one time items. The record results were driven by
increases in same store service and parts and finance and insurance revenues of
7.6% and 8.4%, respectively.
Fourth quarter revenues increased 24% to a record $1.9 billion.
Excluding one time items, income and earnings per share from continuing
operations increased 25% and 10% to $13.9 million and $0.34, respectively.
Including the impact of one time items and discontinued operations, net income
and earnings per share were $0.7 million and $0.02 per share, respectively.
Earnings per share reflect a 15% increase in weighted average shares
outstanding.
For the twelve months ended December 31, 2002, revenues increased 27%
to a record $7.4 billion. Excluding one time items, income and earnings per
share from continuing operations increased 70% and 41% to $74.8 million and
$1.82, respectively. Including the impact of one time items and discontinued
operations, net income and earnings per share were $62.2 million and $1.51 per
share, respectively. Earnings per share reflect a 20% increase in weighted
average shares outstanding.
Chairman Roger Penske commented, "I am pleased UnitedAuto was able to
meet the challenges presented in the fourth quarter 2002. Compared with the
industry record 2001 fourth quarter, same store new retail revenues declined by
1.6% versus an overall industry decrease of 10%, and same store used retail
revenues declined 5.3%. Despite these modest declines, overall same store retail
gross profit increased 3% as a result of the outstanding performance of our
service and parts and finance and insurance operations. The capacity expansion
provided by our facility investment program contributed to the 7.6% increase in
same store service and parts revenues. I believe we will see continued expansion
of this portion of our business in the future. In addition, our margin on the
service and parts business continued its steady growth, increasing 2.3
percentage points during the fourth quarter to 47.6%. As we move into 2003, we
expect to earn $1.96-$2.06 per share, with first quarter earnings of $0.35-$0.40
per share. Our estimates are based upon 41.2 million weighted average shares
outstanding and same store retail revenue growth of 2% to 4%."
President Sam DiFeo stated, "Our business exhibited its resiliency
during the fourth quarter. We demonstrated that our diverse revenue streams
provide protection against declines in the retail sales of new and used
vehicles. I continue to believe that our focus on customer satisfaction will
drive growth in all elements of our business as we strive to continue increasing
market share in all of our markets."
During the fourth quarter of 2002, UnitedAuto settled certain long-term
contracts in conjunction with a streamlining of its western regional structure.
These contracts were related to acquisitions made in 1996. The Company also
determined that a non-compete agreement with a former member of management has
no future value. Accordingly, the Company recorded a $13.6 million ($0.33 per
share) after-tax charge relating to these contracts.
THE COMPANY ALSO ANNOUNCED THE SIGNING OF A DEFINITIVE AGREEMENT TO ACQUIRE THE
INSKIP AUTOCENTER IN WARWICK, RHODE ISLAND. INSKIP REPRESENTS NINE BRANDS,
INCLUDING ACURA, AUDI, BENTLEY, BMW, INFINITI, LEXUS, MERCEDES-BENZ, PORSCHE
AND VOLVO, WITH ESTIMATED ANNUALIZED REVENUES OF $300 MILLION. THE TRANSACTION
IS SUBJECT TO CUSTOMARY CONDITIONS AND IS EXPECTED TO CLOSE EARLY
SECOND QUARTER 2003.
UnitedAuto, which has pursued a strategy based on internal growth from
its existing dealerships, as well as from strategic acquisitions, operates 129
franchises in the United States and 71 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.
UnitedAuto will host a conference call discussing financial results
relating to fourth quarter 2002 on Wednesday, February 19, 2003 at 2 P.M.
Eastern time. Advance registration is not required. Participants must call (800)
553-0358 (INTERNATIONAL, PLEASE CALL (612) 332-7515). Calls need to be made
shortly before the call is to commence. The call will also be simultaneously
broadcast live over the Internet through the UnitedAuto website at
www.unitedauto.com.
Statements in this press release may involve forward-looking
statements, including forward-looking statements regarding UnitedAuto's future
reportable sales and earnings growth potential. Actual results may vary
materially because of external factors such as interest rate fluctuations,
changes in consumer spending and other
factors over which management has no control. These forward-looking statements
should be evaluated together with additional information about UnitedAuto's
business, markets, conditions and other uncertainties, which could affect
UnitedAuto's future performance, which are contained in UnitedAuto's filings
with the Securities and Exchange Commission and which are incorporated into this
press release by reference.
Media Contact:
Phillip M. Hartz
Senior VP -- Corporate Communications
248-648-2610
UNITED AUTO GROUP, INC.
Consolidated Statements of Income (Unaudited)
(Amounts In Thousands, Except Per Share Data)
Fourth Quarter
--------------------------
2002 2001
---- ----
New Vehicles $ 1,111,799 $ 960,065
Used Vehicles 384,504 268,920
Finance and Insurance 44,653 35,947
Service and Parts 207,595 149,485
Fleet 17,600 20,562
Wholesale 111,078 84,986
----------- -----------
Total Revenues 1,877,229 1,519,965
Cost of Sales 1,604,831 1,309,586
----------- -----------
Gross Profit 272,398 210,379
SG&A Expenses 227,795 173,725
One Time Items (a) 22,839 --
----------- -----------
Operating Income 21,764 36,654
Floor Plan Interest Expense (9,629) (8,697)
Other Interest Expense (10,698) (7,545)
----------- -----------
Income from Continuing Operations Before Minority
Interests and Income Tax Provision 1,437 20,412
Minority Interests (585) (451)
Income Tax Provision (582) (8,879)
----------- -----------
Income from Continuing Operations 270 11,082
Income from Discontinued Operations, Net of Tax
(Including Gain on Disposal of $4,426) 382 200
----------- -----------
Net Income $ 652 $ 11,282
=========== ===========
Income from Continuing Operations Per Diluted Share $ 0.01 $ 0.31
=========== ===========
Diluted Earnings Per Share $ 0.02 $ 0.32
=========== ===========
Diluted Weighted Average Shares Outstanding 41,037 35,652
=========== ===========
EBITDA (b) $ 18,677 $ 36,746
=========== ===========
SAME STORE RETAIL REVENUE
-------------------------
New Vehicles $ 920,549 $ 935,478
Used Vehicles 249,972 263,907
Finance and Insurance 33,778 31,171
Service and Parts 156,202 145,235
----------- -----------
Total $ 1,360,501 $ 1,375,791
=========== ===========
(a) Represents costs associated with settlement of long term contracts.
(b) EBITDA is defined as income from continuing operations before minority
interests, income tax provision, other interest expense, depreciation and
amortization. Depreciation was $6.5 million and $3.7 million in 2002 and
2001, respectively. Amortization was $5.1 million in 2001.
UNITED AUTO GROUP, INC.
Consolidated Statements of Income (Unaudited)
(Amounts In Thousands, Except Per Share Data)
Twelve Months
--------------------------
2002 2001
---- ----
New Vehicles $ 4,415,552 $ 3,578,182
Used Vehicles 1,491,107 1,076,249
Finance and Insurance 177,936 142,652
Service and Parts 772,816 585,099
Fleet 110,955 139,623
Wholesale 466,500 348,449
----------- -----------
Total Revenues 7,434,866 5,870,254
Cost of Sales 6,372,656 5,054,902
----------- -----------
Gross Profit 1,062,210 815,352
SG&A Expenses 859,391 661,089
One Time Items (a) 22,839 --
----------- -----------
Operating Income 179,980 154,263
Floor Plan Interest Expense (35,652) (40,274)
Other Interest Expense (38,532) (34,762)
----------- -----------
Income from Continuing Operations Before Minority
Interests and Income Tax Provision 105,796 79,227
Minority Interests (1,968) (815)
Income Tax Provision (42,617) (34,462)
----------- -----------
Income from Continuing Operations 61,211 43,950
Income from Discontinued Operations, Net of Tax
(Including Gain on Disposal of $6,115) 1,030 795
----------- -----------
Net Income $ 62,241 $ 44,745
=========== ===========
Income from Continuing Operations Per Diluted Share $ 1.49 $ 1.29
=========== ===========
Diluted Earnings Per Share $ 1.51 $ 1.31
=========== ===========
Diluted Weighted Average Shares Outstanding 41,161 34,196
=========== ===========
EBITDA (b) $ 166,632 $ 147,023
=========== ===========
SAME STORE RETAIL REVENUE
New Vehicles $ 3,341,558 $ 3,186,646
Used Vehicles 943,532 958,495
Finance and Insurance 127,216 115,717
Service and Parts 560,948 528,363
----------- -----------
Total $ 4,973,254 $ 4,789,221
=========== ===========
(c) Represents costs associated with settlement of long term contracts.
(d) EBITDA is defined as income from continuing operations before minority
interests, income tax provision, other interest expense, depreciation and
amortization. Depreciation was $22.3 million and $13.3 million in 2002 and
2001, respectively. Amortization was $19.7 million in 2001.
UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
12/31/02 12/31/01
-------- --------
ASSETS (unaudited)
Cash and Cash Equivalents $ 8,069 $ 2,952
Accounts Receivable, Net 319,625 239,610
Inventories 973,185 611,889
Other Current Assets 27,869 16,081
---------- ----------
Total Current Assets 1,328,748 870,532
Property and Equipment, Net 313,496 181,290
Intangible Assets, Net 981,328 772,737
Assets of Discontinued Operations -- 66,624
Other Assets 66,742 55,393
---------- ----------
Total Assets $2,690,314 $1,946,576
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Floor Plan Notes Payable $ 907,903 $ 586,620
Accounts Payable and Accrued Expenses 276,593 157,730
Current Portion Long - Term Debt 14,979 4,202
---------- ----------
Total Current Liabilities 1,199,475 748,552
Long - Term Debt (a) 651,256 551,648
Other Long-Term Liabilities 142,730 92,774
Liabilities of Discontinued Operations -- 37,919
---------- ----------
Total Liabilities 1,993,461 1,430,893
Stockholders' Equity 696,853 515,683
---------- ----------
Total Liabilities and Stockholders' Equity $2,690,314 $1,946,576
========== ==========
(a) Includes $300.0 million of 9.625% subordinated notes at December 31, 2002.
Undrawn capacity under the Company's credit facility was $349.2 million as
of December 31, 2002.
UNITED AUTO GROUP, INC.
Selected Data
Fourth Quarter TWELVE MONTHS
-------------- -------------
2002 2001 2002 2001
---- ---- ---- ----
Units
New Retail Units 38,806 35,386 158,768 135,402
Used Retail Units 19,477 16,319 77,569 65,597
------ ------ ------ ------
Total Retail Units 58,283 51,705 236,337 200,999
====== ====== ======= =======
Revenue Mix
New Vehicles 59.2% 63.1% 59.3% 61.0%
Used Vehicles 20.5% 17.7% 20.1% 18.3%
Finance and Insurance 2.4% 2.4% 2.4% 2.4%
Service and Parts 11.1% 9.8% 10.4% 10.0%
Fleet 0.9% 1.4% 1.5% 2.4%
Wholesale 5.9% 5.6% 6.3% 5.9%
Retail Gross Margin - by Product
New Vehicles 8.6% 8.3% 8.5% 8.3%
Used Vehicles 9.5% 10.7% 10.0% 10.6%
Finance and Insurance 100.0% 100.0% 100.0% 100.0%
Service and Parts 47.6% 45.3% 47.1% 44.8%
Gross Profit per Transaction
New Vehicles $2,463 $2,260 $2,362 $2,200
Used Vehicles 1,880 1,760 1,927 1,738
Finance and Insurance 766 695 753 710
Same Store Retail Revenue Growth
New Vehicles (1.6)% 22.1% 4.9% 10.9%
Used Vehicles (5.3)% 21.6% (1.6)% 6.6%
Finance and Insurance 8.4% 29.0% 9.9% 20.0%
Service and Parts 7.6% 5.6% 6.2% 4.2%
Debt to Total Capital Ratio 49% 52% 49% 52%
Brand Mix:
Toyota/Lexus 23% 30% 24% 30%
Honda/Acura 12% 12% 12% 12%
BMW 12% 6% 11% 5%
General Motors 12% 15% 12% 15%
Mercedes 10% 7% 8% 7%
Chrysler 9% 10% 10% 11%
Nissan/Infiniti 5% 7% 6% 7%
Ford 4% 6% 5% 6%
Other 13% 7% 12% 7%