United Auto Group, Inc. (NYSE: UAG), an international automotive
retailer, today reported third quarter income from continuing
operations of $36.4 million and related earnings per share of $0.39,
representing increases of 7.8% and 8.3%, respectively, over the
comparable period in 2005. Third quarter 2006 net income amounted to
$33.9 million and related earnings per share was $0.36.
The Company's revenue increased 15.2% to a record $3.1 billion
during the third quarter. The revenue increase was driven by
acquisitions and strong same-store growth from the Company's used
vehicle and service and parts operations. Commenting on the Company's
performance, Chairman Roger Penske said, "The third quarter showcases
the strength of UAG's business model. Although new vehicle sales were
challenging, used vehicle and service and parts sales were strong.
Aggregate used vehicle revenues grew 28%, including same-store revenue
increases of 6.8% in the U.S. and 12.2% in the United Kingdom.
Additionally, our service and parts operations continue to expand,
increasing from 10.4% to 10.7% of total revenue, due in part to a 5.7%
same-store increase."
For the nine months ended September 30, 2006, revenues increased
13.0% to $8.7 billion. Income from continuing operations for the nine
months increased 10.7% to $98.6 million and related earnings per share
increased 10.5% to $1.05 per share. Net income for the nine months
increased 6.7% to $94.8 million, or $1.01 per share, from $88.9
million, or $0.95 per share, in the prior year.
The Company currently projects earnings from continuing operations
in the fourth quarter in the range of $0.30 to $0.35 per share, which
would result in earnings from continuing operations for the year in
the range of $1.35 to $1.40 per share. Earnings per share projections
are based on an average of 94.1 million estimated shares outstanding.
UnitedAuto will host a conference call discussing financial
results relating to third quarter 2006 on Tuesday, October 24, 2006 at
2:00 p.m. EDT. To listen to the conference call, participants must
dial (888) 781-3339 (International, please dial (703) 546-4240). The
call will be simultaneously broadcast live over the Internet through
the UnitedAuto website at www.unitedauto.com.
About UnitedAuto
United Auto Group, Inc., headquartered in Bloomfield Hills,
Michigan, operates 319 retail automotive franchises, representing 42
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 170 franchises in 20 states
and Puerto Rico and 149 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 involve forward-looking
statements, including forward-looking statements regarding
UnitedAuto's future sales and earnings potential. Actual results may
vary materially because of risks and uncertainties, including external
factors such as interest rate fluctuations, changes in consumer
spending, energy costs and other factors over which management has no
control. These forward-looking statements should be evaluated together
with additional information about UnitedAuto's business, market
conditions, and other uncertainties which could affect UnitedAuto's
future performance, which is 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 is 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.
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UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Third Quarter
----------------------
2006 2005
----------------------
Revenues:
New Vehicle $1,732,275 $1,577,928
Used Vehicle 704,254 550,665
Finance and Insurance, Net 68,799 62,939
Service and Parts 329,322 277,040
Fleet and Wholesale Vehicle 245,954 206,717
----------------------
Total Revenues 3,080,604 2,675,289
Cost of Sales:
New Vehicle 1,584,517 1,443,278
Used Vehicle 645,135 500,925
Service and Parts 147,231 127,017
Fleet and Wholesale Vehicle 245,301 207,176
----------------------
Total Cost of Sales 2,622,184 2,278,396
----------------------
Gross Profit 458,420 396,893
SG&A Expenses 361,297 309,265
Depreciation and Amortization 11,722 9,772
----------------------
Operating Income 85,401 77,856
Floor Plan Interest Expense (16,716) (11,865)
Other Interest Expense (11,111) (12,222)
----------------------
Income from Continuing Operations Before
Income Taxes and Minority Interests 57,574 53,769
Income Taxes (20,727) (19,552)
Minority Interests (478) (486)
----------------------
Income from Continuing Operations 36,369 33,731
Loss from Discontinued Operations, Net of Tax (2,496) (967)
----------------------
Net Income $33,873 $32,764
======================
Income from Continuing Operations Per Diluted
Share $0.39 $0.36
======================
Diluted EPS $0.36 $0.35
======================
Diluted Weighted Average Shares Outstanding 94,288 94,248
======================
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UNITED AUTO GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)
Nine Months
----------------------
2006 2005
----------------------
Revenues:
New Vehicle $4,851,791 $4,445,052
Used Vehicle 1,935,739 1,626,516
Finance and Insurance, Net 195,636 175,464
Service and Parts 951,884 809,278
Fleet and Wholesale Vehicle 726,439 606,525
----------------------
Total Revenues 8,661,489 7,662,835
Cost of Sales:
New Vehicle 4,431,374 4,059,563
Used Vehicle 1,766,982 1,478,151
Service and Parts 427,464 369,563
Fleet and Wholesale Vehicle 721,906 605,617
----------------------
Total Cost of Sales 7,347,726 6,512,894
----------------------
Gross Profit 1,313,763 1,149,941
SG&A Expenses 1,039,317 905,171
Depreciation and Amortization 33,373 28,791
----------------------
Operating Income 241,073 215,979
Floor Plan Interest Expense (49,097) (37,483)
Other Interest Expense (34,559) (35,735)
----------------------
Income from Continuing Operations Before
Income Taxes and Minority Interests 157,417 142,761
Income Taxes (57,254) (52,390)
Minority Interests (1,536) (1,250)
----------------------
Income from Continuing Operations 98,627 89,121
Loss from Discontinued Operations, Net of Tax (3,825) (269)
----------------------
Net Income $94,802 $88,852
======================
Income from Continuing Operations Per Diluted
Share $1.05 $0.95
======================
Diluted EPS $1.01 $0.95
======================
Diluted Weighted Average Shares Outstanding 94,085 94,010
======================
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UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)
9/30/06 12/31/05
----------------------
Assets
Cash and Cash Equivalents $19,065 $8,957
Accounts Receivable, Net 464,287 413,431
Inventories, Net 1,455,910 1,219,735
Other Current Assets 91,197 50,865
Assets Held for Sale 137,442 189,373
----------------------
Total Current Assets 2,167,901 1,882,361
Property and Equipment, Net 562,011 423,513
Intangibles 1,492,606 1,204,675
Other Assets 116,410 83,624
----------------------
Total Assets $4,338,928 $3,594,173
======================
Liabilities and Stockholders' Equity
Floor Plan Notes Payable $896,113 $841,911
Floor Plan Notes Payable - Non-Trade 360,548 331,009
Accounts Payable and Accrued Expenses 654,007 381,583
Current Portion Long-Term Debt 3,743 3,551
Liabilities Held for Sale 68,624 106,710
----------------------
Total Current Liabilities 1,983,035 1,664,764
Long-Term Debt 862,535 576,690
Other Long-Term Liabilities 234,646 206,987
----------------------
Total Liabilities 3,080,216 2,448,441
Stockholders' Equity 1,258,712 1,145,732
----------------------
Total Liabilities and Stockholders' Equity $4,338,928 $3,594,173
======================
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UNITED AUTO GROUP, INC.
Selected Data
Third Quarter Nine Months
--------------------------------------------
2006 2005 2006 2005
--------------------------------------------
Total Retail Units
New Retail 52,234 49,076 145,697 136,415
Used Retail 25,255 21,522 70,007 62,638
--------------------------------------------
Total Retail 77,489 70,598 215,704 199,053
============================================
Same-Store Retail Units
New Same-Store Retail 47,054 48,777 131,165 133,414
Used Same-Store
Retail 21,832 21,332 61,856 60,916
--------------------------------------------
Total Same-Store
Retail 68,886 70,109 193,021 194,330
Same-Store Retail Revenue
New Vehicles $1,545,196 $1,571,184 $4,375,476 $4,374,997
Used Vehicles 594,755 546,241 1,704,113 1,594,043
Finance and
Insurance, Net 62,619 62,477 179,411 172,133
Service and Parts 291,904 276,044 854,817 798,702
--------------------------------------------
Total Same-Store
Retail $2,494,474 $2,455,946 $7,113,817 $6,939,875
============================================
Same-Store Retail Revenue
Growth
New Vehicles (1.7%) 8.2% - 5.4%
Used Vehicles 8.9% 6.3% 6.9% 3.5%
Finance and
Insurance, Net 0.2% 17.0% 4.2% 13.1%
Service and Parts 5.7% 8.7% 7.0% 8.1%
Revenue Mix
New Vehicles 56.2% 59.0% 56.0% 58.0%
Used Vehicles 22.9% 20.6% 22.4% 21.2%
Finance and
Insurance, Net 2.2% 2.4% 2.3% 2.3%
Service and Parts 10.7% 10.4% 11.0% 10.6%
Fleet and Wholesale 8.0% 7.6% 8.3% 7.9%
Average Retail Selling
Price
New Vehicles $33,164 $32,153 $33,301 $32,585
Used Vehicles $27,886 $25,586 $27,651 $25,967
Gross Margin 14.9% 14.8% 15.2% 15.0%
Retail Gross Margin - by
Product
New Vehicle 8.5% 8.5% 8.7% 8.7%
Used Vehicle 8.4% 9.0% 8.7% 9.1%
Service and Parts 55.3% 54.2% 55.1% 54.3%
Gross Profit per Retail
Transaction
New Vehicles $2,829 $2,744 $2,885 $2,826
Used Vehicles 2,341 2,311 2,411 2,369
Finance and Insurance 888 892 907 882
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Third Quarter Nine Months
-------------------------------------------
2006 2005 2006 2005
-------------------------------------------
Brand Mix:
Toyota/Lexus 21% 22% 21% 22%
BMW 18% 15% 16% 15%
Honda/Acura 15% 15% 16% 15%
DCX 11% 12% 11% 12%
Ford 11% 10% 11% 10%
Audi 7% 7% 7% 7%
General Motors 5% 6% 5% 6%
Porsche 3% 4% 4% 4%
Nissan/Infiniti 3% 4% 3% 4%
Other 6% 5% 6% 5%
Debt to Total Capital Ratio 41% 34% 41% 34%
Rent Expense $35,609 $28,184 $102,844 $83,839
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