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BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)--July 25, 2006
Earnings Per Share From Continuing Operations Rise 15% to $0.39 Service and Parts Revenues Increase 17%
United Auto Group, Inc. (NYSE: UAG), an international automotive retailer, today reported second quarter income from continuing operations of $36.6 million and related earnings per share of $0.39, representing increases of 15.2% and 14.7%, respectively, over the comparable period in 2005. Second quarter 2006 net income amounted to $36.8 million and related earnings per share was $0.39.
The Company's revenue increased 11.8% to a record $2.9 billion during the second quarter. The revenue increase was driven by 2.9% same-store retail revenue growth, including same-store used vehicle revenue growth of 9.3% from the Company's foreign nameplates. On an aggregate basis, same-store used vehicle revenues increased 8.5%.
UAG Chairman Roger Penske said, ""UnitedAuto's performance during the second quarter continues to highlight the strength of our brand portfolio and the continuing success of our investment strategy. Our overall service and parts revenue increased 17.3%, including 7.6% growth on a same-store basis, which contributed to a 20 basis-point increase in total gross margin to 15.2%.""
The improvement in the Company's gross margin was due primarily to a 50 basis-point increase in service and parts from 10.4% to 10.9% of total revenues, coupled with a 36 basis-point increase in margin on service and parts revenues.
For the six months ended June 30, 2006, revenues increased 11.7 % to $5.6 billion. Income from continuing operations for the six months increased 12.7% to $62.6 million and related earnings per share increased 11.9% to $0.66 per share. Net income for the six months increased 8.6% to $60.9, or $0.64 per share, from $56.1 million, or $0.60 per share, in the prior year. Second quarter 2005 results include $1.2 million ($0.01 per share) of after tax charges relating to severance costs associated with cost saving initiatives in certain markets.
The Company currently projects earnings from continuing operations in the third quarter in the range of $0.37 to $0.40 per share, and continues to project 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 94.6 million estimated shares outstanding.
UnitedAuto will host a conference call discussing financial results relating to second quarter 2006 on Tuesday, July 25, 2006 at 2:00 p.m. ET. To listen to the conference call, participants must dial (866) 283-8246 (International, please dial (703) 639-1271). 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 296 retail automotive franchises, representing 40 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 173 franchises in 20 states and Puerto Rico and 123 franchises located outside the United States, primarily in the United Kingdom. UnitedAuto is a member of the Fortune 500 and Russell 1000 and has approximately 15,100 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. -0- *T UNITED AUTO GROUP, INC. Consolidated Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited) Second Quarter ----------------------- 2006 2005 ----------- ----------- Revenues: New Vehicle $1,640,472 $1,528,878 Used Vehicle 657,747 556,134 Finance and Insurance, Net 67,451 58,716 Service and Parts 319,827 272,641 Fleet and Wholesale Vehicle 246,250 205,254 ----------- ----------- Total Revenues 2,931,747 2,621,623 Cost of Sales: New Vehicle 1,497,328 1,395,825 Used Vehicle 600,662 505,438 Service and Parts 143,820 123,596 Fleet and Wholesale Vehicle 245,800 204,838 ----------- ----------- Total Cost of Sales 2,487,610 2,229,697 ----------- ----------- Gross Profit 444,137 391,926 SG&A Expenses 345,385 305,546 Depreciation and Amortization 11,204 9,685 ----------- ----------- Operating Income 87,548 76,695 Floor Plan Interest Expense (17,232) (13,142) Other Interest Expense (11,495) (12,251) ----------- ----------- Income from Continuing Operations Before Minority Interests and Income Taxes 58,821 51,302 Income Taxes (21,597) (18,925) Minority Interests (636) (621) ----------- ----------- Income from Continuing Operations 36,588 31,756 Income from Discontinued Operations, Net of Tax 255 1,440 ----------- ----------- Net Income $36,843 $33,196 =========== =========== Income from Continuing Operations Per Diluted Share $0.39 $0.34 =========== =========== Diluted EPS $0.39 $0.35 =========== =========== Diluted Weighted Average Shares Outstanding 94,636 94,082 =========== =========== *T -0- *T UNITED AUTO GROUP, INC. Consolidated Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited) Six Months ----------------------- 2006 2005 ----------- ----------- Revenues: New Vehicle $3,126,314 $2,881,209 Used Vehicle 1,237,747 1,075,082 Finance and Insurance, Net 126,952 112,563 Service and Parts 627,048 536,674 Fleet and Wholesale Vehicle 465,871 394,895 ----------- ----------- Total Revenues 5,583,932 5,000,423 Cost of Sales: New Vehicle 2,853,123 2,629,237 Used Vehicle 1,127,973 976,809 Service and Parts 282,226 244,759 Fleet and Wholesale Vehicle 462,951 393,929 ----------- ----------- Total Cost of Sales 4,726,273 4,244,734 ----------- ----------- Gross Profit 857,659 755,689 SG&A Expenses 679,895 598,191 Depreciation and Amortization 21,782 19,206 ----------- ----------- Operating Income 155,982 138,292 Floor Plan Interest Expense (32,123) (25,427) Other Interest Expense (23,521) (23,671) ----------- ----------- Income from Continuing Operations Before Minority Interests and Income Taxes 100,338 89,194 Income Taxes (36,710) (32,905) Minority Interests (1,058) (764) ----------- ----------- Income from Continuing Operations 62,570 55,525 Income (Loss) from Discontinued Operations, Net of Tax (1,636) 563 ----------- ----------- Net Income $60,934 $56,088 =========== =========== Income from Continuing Operations Per Diluted Share $0.66 $0.59 =========== =========== Diluted EPS $0.64 $0.60 =========== =========== Diluted Weighted Average Shares Outstanding 94,499 94,050 =========== =========== *T -0- *T UNITED AUTO GROUP, INC. Consolidated Condensed Balance Sheets (Amounts In Thousands) (Unaudited) 6/30/06 12/31/05 ----------- ----------- Assets Cash and Cash Equivalents $25,623 $9,424 Accounts Receivable, Net 405,392 411,970 Inventories, Net 1,418,891 1,213,568 Other Current Assets 76,761 50,868 Assets Held for Sale 170,984 193,937 ----------- ----------- Total Current Assets 2,097,651 1,879,767 Property and Equipment, Net 505,592 423,224 Intangibles 1,358,641 1,207,554 Other Assets 101,982 83,628 ----------- ----------- Total Assets $4,063,866 $3,594,173 =========== =========== Liabilities and Stockholders' Equity Floor Plan Notes Payable $991,692 $837,045 Floor Plan Notes Payable - Non-Trade 319,189 330,240 Accounts Payable and Accrued Expenses 482,461 381,118 Current Portion Long-Term Debt 3,741 3,551 Liabilities Held for Sale 107,702 112,796 ----------- ----------- Total Current Liabilities 1,904,785 1,664,750 Long-Term Debt 716,018 576,690 Other Long-Term Liabilities 216,792 207,001 ----------- ----------- Total Liabilities 2,837,595 2,448,441 Stockholders' Equity 1,226,271 1,145,732 ----------- ----------- Total Liabilities and Stockholders' Equity $4,063,866 $3,594,173 =========== =========== *T -0- *T UNITED AUTO GROUP, INC. Selected Data Second Quarter Six Months ----------------------- ----------------------- 2006 2005 2006 2005 ----------- ----------- ----------- ----------- Units New Retail Units 49,472 46,589 93,602 87,605 Used Retail Units 23,577 20,872 44,704 40,851 ----------- ----------- ----------- ----------- Total Retail Units 73,049 67,461 138,306 128,456 =========== =========== =========== =========== Same-Store Retail Revenue New Vehicles $1,518,823 $1,520,879 $2,866,926 $2,840,158 Used Vehicles 597,032 550,507 1,128,366 1,052,351 Finance and Insurance, Net 62,858 58,161 117,880 110,389 Service and Parts 292,316 271,544 571,539 529,872 ----------- ----------- ----------- ----------- Total Same- Store Retail Revenue $2,471,029 $2,401,091 4,684,711 $4,532,770 =========== =========== =========== =========== Same-Store Retail Revenue Growth New Vehicles (0.1%) 8.8% 0.9% 4.7% Used Vehicles 8.5% 5.0% 7.2% 2.9% Finance and Insurance, Net 8.1% 16.5% 6.8% 11.2% Service and Parts 7.6% 9.0% 7.9% 8.0% Revenue Mix New Vehicles 56.0% 58.3% 56.0% 57.6% Used Vehicles 22.4% 21.2% 22.2% 21.5% Finance and Insurance, Net 2.3% 2.2% 2.3% 2.3% Service and Parts 10.9% 10.4% 11.2% 10.7% Fleet and Wholesale 8.4% 7.9% 8.3% 7.9% Gross Margin 15.2% 15.0% 15.4% 15.1% Retail Gross Margin - by Product New Vehicle 8.7% 8.7% 8.7% 8.7% Used Vehicle 8.7% 9.1% 8.9% 9.2% Service and Parts 55.0% 54.7% 55.0% 54.4% Gross Profit per Transaction New Vehicles $2,893 $2,856 $2,919 $2,876 Used Vehicles 2,421 2,429 2,456 2,406 Finance and Insurance 923 870 918 876 Brand Mix: Toyota/Lexus 21% 22% 21% 22% BMW 16% 15% 16% 15% Honda/Acura 16% 15% 16% 15% DCX 11% 12% 11% 12% Ford 10% 9% 11% 9% Audi 7% 7% 7% 7% General Motors 5% 7% 5% 6% Porsche 4% 4% 4% 4% Nissan/Infiniti 3% 4% 3% 4% Other 7% 5% 6% 6% Total Brand Mix: Domestic (Detroit 3) 8% 10% 8% 10% Foreign (incl. Premium) 92% 90% 92% 90% Premium 59% 58% 60% 58% Debt to Total Capital Ratio 37% 34% 37% 34% Rent Expense $34,423 $28,688 $67,399 $55,827 *T
CONTACT: United Auto Group, Inc.
Jim Davidson, 201-325-3303
jdavidson@unitedauto.com
or
Tony Pordon, 248-648-2540
tpordon@unitedauto.com"