United Auto Group, Inc. (NYSE: UAG), an international automotive
retailer, today reported fourth quarter income from continuing
operations of $31.1 million and related earnings per share of $0.33.
Fourth quarter 2005 results included $5.2 million of after-tax
earnings ($0.06 per share) attributable to the sale of all remaining
variable profits relating to the pool of extended service contracts
sold at the Company's dealerships from 2001 through 2005. Excluding
the extended service contract gain from the prior year results,
adjusted income from continuing operations and related earnings per
share increased 16.1% and 17.9%, respectively, over the comparable
period in 2005. Fourth quarter net income amounted to $29.9 million
and related earnings per share was $0.32.
Revenues in the fourth quarter increased 22.8% to $2.9 billion,
including a 7.1% increase in same-store retail revenues. The increase
in same-store revenue was highlighted by 14.5% growth in used vehicle
revenues and a 6.2% increase in service and parts revenues.
Commenting on the Company's results, Chairman Roger Penske said,
"Our business achieved solid same-store retail revenue growth during
the fourth quarter, despite a difficult comparison to last year. I am
pleased with the same-store results, especially in our service and
parts operations which included 13.6% same-store growth in our
international markets. These results highlight the benefit of our
ongoing capital investment program." Penske continued, "Our used
vehicle business was exceptionally strong in the quarter, with total
used vehicle revenues growing nearly 44%. The increased level of this
business, coupled with a challenging marketplace, contributed to an
overall decrease in gross margin percentage during the fourth
quarter."
For the year ended December 31, 2006, revenues increased 16.4% to
$11.2 billion. Full-year income from continuing operations amounted to
$130.6 million and related earnings per share was $1.39. Excluding the
extended service contract gain noted above from the prior year
results, income from continuing operations and related earnings per
share increased 14.7% and 14.9%, respectively, over the comparable
period in 2005.
The Company currently estimates earnings from continuing
operations to be in the range of $1.40 to $1.50 per share for the year
ended December 31, 2007. This estimate includes an estimated $0.02 to
$0.04 per share of costs associated with developing the distribution
network for the smart product launch in the United States. First
quarter 2007 earnings from continuing operations are estimated to be
in the range of $0.26 to $0.30 per share. These estimates exclude a
$12 million, or $0.13 per share, charge to be incurred in connection
with the previously announced call of the Company's $300 million
9.625% Senior Subordinated Notes in March 2007. Earnings per share
estimates are based on an estimated average of 94.6 million shares
outstanding.
UnitedAuto will host a conference call discussing financial
results relating to fourth quarter 2006 on Wednesday, February 14,
2007 at 2:00 p.m. EDT. To listen to the conference call, participants
must dial (800) 553-5275 (International, please dial (612) 332-1210).
The call will be simultaneously broadcast over the Internet through
the UnitedAuto website at www.unitedauto.com.
About UnitedAuto
United Auto Group, Inc., headquartered in Bloomfield Hills,
Michigan, operates 314 retail automotive franchises, representing 41
different brands, and 26 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 169 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 over 15,000 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, 2005 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.
-0-
*T
UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Fourth Quarter
-----------------------
2006 2005
----------- -----------
Revenues:
New Vehicle $1,587,023 $1,358,681
Used Vehicle 680,384 472,776
Finance and Insurance, Net 59,372 59,816
Service and Parts 327,644 265,625
Fleet and Wholesale Vehicle 226,594 189,432
----------- -----------
Total Revenues 2,881,017 2,346,330
Cost of Sales:
New Vehicle 1,446,815 1,236,207
Used Vehicle 625,889 432,099
Service and Parts 147,654 119,047
Fleet and Wholesale Vehicle 227,862 190,316
----------- -----------
Total Cost of Sales 2,448,220 1,977,669
----------- -----------
Gross Profit 432,797 368,661
SG&A Expenses 350,939 284,097
Depreciation and Amortization 12,476 9,697
----------- -----------
Operating Income 69,382 74,867
Floor Plan Interest Expense (15,739) (12,460)
Other Interest Expense (14,702) (13,260)
Equity in Earnings of Affiliates 2,695 1,093
----------- -----------
Income from Continuing Operations Before
Income Taxes and Minority Interests 41,636 50,240
Income Taxes (9,930) (17,651)
Minority Interests (636) (564)
----------- -----------
Income from Continuing Operations 31,070 32,025
Loss from Discontinued Operations, Net of Tax (1,171) (1,904)
----------- -----------
Net Income $29,899 $30,121
=========== ===========
Income from Continuing Operations Per Diluted
Share $0.33 $0.34
=========== ===========
Diluted EPS $0.32 $0.32
=========== ===========
Diluted Weighted Average Shares Outstanding 94,389 94,374
=========== ===========
*T
-0-
*T
UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Twelve Months
-----------------------
2006 2005
----------- -----------
Revenues:
New Vehicle $6,275,916 $5,601,187
Used Vehicle 2,546,009 2,025,532
Finance and Insurance, Net 249,581 229,575
Service and Parts 1,246,288 1,043,859
Fleet and Wholesale Vehicle 924,519 761,240
----------- -----------
Total Revenues 11,242,313 9,661,393
Cost of Sales:
New Vehicle 5,727,135 5,106,889
Used Vehicle 2,330,694 1,845,587
Service and Parts 559,305 474,563
Fleet and Wholesale Vehicle 920,710 760,903
----------- -----------
Cost of Sales 9,537,844 8,187,942
----------- -----------
Gross Profit 1,704,469 1,473,451
SG&A Expenses 1,356,452 1,154,220
Depreciation and Amortization 44,863 37,551
----------- -----------
Operating Income 303,154 281,680
Floor Plan Interest Expense (61,565) (47,124)
Other Interest Expense (49,173) (49,004)
Equity in Earnings of Affiliates 8,201 4,271
----------- -----------
Income from Continuing Operations Before
Income Taxes and Minority Interests 200,617 189,823
Income Taxes (67,845) (68,870)
Minority Interests (2,172) (1,814)
----------- -----------
Income from Continuing Operations 130,600 119,139
Loss from Discontinued Operations, Net of Tax (5,899) (166)
----------- -----------
Net Income $124,701 $118,973
=========== ===========
Income from Continuing Operations Per Diluted
Share $1.39 $1.27
=========== ===========
Diluted EPS $1.32 $1.27
=========== ===========
Diluted Weighted Average Shares Outstanding 94,178 93,932
=========== ===========
*T
-0-
*T
UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)
12/31/06 12/31/05
----------- -----------
Assets
Cash and Cash Equivalents $13,147 $8,957
Accounts Receivable, Net 469,516 398,127
Inventories 1,519,506 1,144,584
Other Current Assets 71,490 50,209
Assets Held for Sale 213,030 310,467
----------- -----------
Total Current Assets 2,286,689 1,912,344
Property and Equipment, Net 582,646 416,099
Intangibles 1,490,767 1,182,273
Other Assets 142,783 83,457
----------- -----------
Total Assets $4,502,885 $3,594,173
=========== ===========
Liabilities and Stockholders' Equity
Floor Plan Notes Payable $874,326 $785,237
Floor Plan Notes Payable - Non-Trade 297,985 318,034
Accounts Payable and Accrued Expenses 515,111 368,874
Current Portion Long-Term Debt 3,057 3,551
Liabilities Held for Sale 52,150 189,239
----------- -----------
Total Current Liabilities 1,742,629 1,664,935
Long-Term Debt 1,178,994 576,690
Other Long-Term Liabilities 285,609 206,816
----------- -----------
Total Liabilities 3,207,232 2,448,441
Stockholders' Equity 1,295,653 1,145,732
----------- -----------
Total Liabilities and Stockholders' Equity $4,502,885 $3,594,173
=========== ===========
*T
-0-
*T
UNITED AUTO GROUP, INC.
Selected Data
Fourth Quarter Twelve Months
-----------------------------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Total Retail Units
New Retail 43,463 38,899 183,370 167,956
Used Retail 22,529 17,109 88,723 75,348
----------- ----------- ----------- -----------
Total Retail 65,992 56,008 272,093 243,304
=========== =========== =========== ===========
Same-Store Retail Units
New Same-Store Retail 39,120 38,592 163,253 163,233
Used Same-Store
Retail 18,189 16,869 75,601 72,687
----------- ----------- ----------- -----------
Total Same-Store
Retail 57,309 55,461 238,854 235,920
=========== =========== =========== ===========
Same-Store Retail
Revenue
New Vehicles $1,423,041 $1,349,041 $5,594,172 $5,472,566
Used Vehicles 534,728 467,101 2,154,969 1,973,780
Finance and
Insurance, Net 53,733 59,412 226,399 224,594
Service and Parts 279,247 262,988 1,091,642 1,021,030
----------- ----------- ----------- -----------
Total Same-Store
Retail $2,290,749 $2,138,542 $9,067,182 $8,691,970
=========== =========== =========== ===========
Same-Store Retail
Revenue Growth
New Vehicles 5.5% 4.5% 2.2% 5.8%
Used Vehicles 14.5% 4.6% 9.2% 4.4%
Finance and
Insurance, Net (9.6%) (2.4%) 0.8% 9.7%
Service and Parts 6.2% 6.6% 6.9% 7.6%
Revenue Mix
New Vehicles 55.1% 57.9% 55.8% 58.0%
Used Vehicles 23.6% 20.2% 22.6% 21.0%
Finance and
Insurance, Net 2.1% 2.5% 2.2% 2.4%
Service and Parts 11.4% 11.3% 11.1% 10.8%
Fleet and Wholesale 7.8% 8.1% 8.3% 7.8%
Average Retail Selling
Price
New Vehicles $36,514 $34,928 $34,225 $33,349
Used Vehicles $30,200 $27,633 $28,696 $26,882
Gross Margin 15.0% 15.7% 15.2% 15.3%
Retail Gross Margin -
by Product
New Vehicle 8.8% 9.0% 8.7% 8.8%
Used Vehicle 8.0% 8.6% 8.5% 8.9%
Service and Parts 54.9% 55.2% 55.1% 54.5%
Gross Profit per Retail
Transaction
New Vehicles $3,226 $3,149 $2,993 $2,943
Used Vehicles 2,419 2,378 2,427 2,388
Finance and Insurance 900 1,068 917 944
*T
-0-
*T
UNITED AUTO GROUP, INC.
Selected Data (Continued)
Fourth Quarter Twelve Months
-------------------------------------
2006 2005 2006 2005
-------- -------- --------- ---------
Brand Mix:
BMW 21% 16% 18% 16%
Toyota/Lexus 20% 22% 21% 23%
Honda/Acura 14% 15% 16% 15%
DCX 12% 12% 11% 12%
Ford 9% 9% 10% 9%
Audi 7% 7% 7% 7%
General Motors 4% 5% 4% 5%
Porsche 4% 4% 4% 4%
Nissan/Infiniti 3% 3% 3% 3%
Other 6% 7% 6% 6%
-------- -------- --------- ---------
100% 100% 100% 100%
Foreign / Premium 94% 93% 93% 92%
Domestic Big 3 6% 7% 7% 8%
-------- -------- --------- ---------
100% 100% 100% 100%
Debt to Total Capital Ratio 48% 34% 48% 34%
Rent Expense $36,254 $29,492 $135,253 $109,715
*T
