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.
"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 at 2:00
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 at www.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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